For the past two decades, China’s growth figures have been the envy of the developed world. Yet a deceleration in the first half of this year had made some wonder whether the Chinese flying dragon was losing altitude. Not any more. A smooth rebound in the third quarter shows that fears of an imminent “hard landing” were premature.
China’s acceleration from an annual growth rate of 7.5 per cent to one of 7.8 per cent added to the sense of relief that came to dominate the markets at the end of a tense week. After a fortnight of high drama in Washington, US politicians sealed a deal ending the partial government shutdown and lifting the debt ceiling until next February. This signalled an armistice rather than the end of the war between the Democrats and the Republicans. But it proved enough to send equities soaring, as investors resumed dancing to the tune of central bank largesse.
Markets are not alone in celebrating the good news out of Beijing. Exporters to China – including German manufacturers and commodity producers in emerging economies – are also bound to feel cheerful. So will the Communist party leadership, which is anxious that growth stays above 7.5 per cent to preserve social cohesion.