Bloomberg
Beijing



From Janet Yellen to anxious Shanghai retirees who poured their savings into stocks, eyes worldwide will turn to Beijing tomorrow for the 10am release of the third-quarter gross domestic product report.
The world’s second-largest economy probably grew 6.8% from a year earlier, according to the median estimate of economists surveyed by Bloomberg News. That would be the slowest quarterly pace since 2009. Growth came in at 7% in both of the first two quarters, in line with Premier Li Keqiang’s target for the full year. He stuck to that on Tuesday, telling a group of government officials China should hit its growth goal this year.
A sharper slowdown will further cloud the global economic outlook at a time when China has risen to the top of the worry list for investors, as well as Federal Reserve Chair Yellen and other top monetary officials worldwide.
Aside from the headline growth number, a more detailed examination of the data, a press briefing and other related reports will help offer a more accurate gauge of the economy.
To meet the International Monetary Fund’s data reporting standards, China has tweaked how it reports gross domestic product. The National Bureau of Statistics will release output for each quarter tomorrow, plus a cumulative reading. It previously released quarterly economic growth but didn’t specify GDP for each three-month period.
The new figure makes it easier to calculate the change in output (unadjusted for inflation) in the last quarter from a year earlier, as the aggregate ones usually smoothed out volatility. This may signal a sharper third-quarter slowdown than the stable headline growth reading.
In a separate announcement posted to the statistics bureau website on Tuesday, officials will release a breakout of output by industry. Services accounted for 49.5% of China’s GDP in the first-half, the NBS reported in July. That’s important because the sector has been outperforming manufacturing, helping underpin growth.
That picture may not be as rosy in the third-quarter, as an equity boom which fuelled brokerages and banks earlier has busted. The bull market added 0.5 percentage point to growth in the first-half, and its contribution to the third-quarter GDP will perhaps be “substantially smaller,” according to Bloomberg economists Tom Orlik and Fielding Chen. We’ll also see how much the old engine stalls. Electricity output may no longer be as key as it was when Premier Li Keqiang cited it as a bellwether worth watching, but it remains an important industrial indicator, and readings have remained lacklustre.
Property sales started to recover in the second-quarter from last year’s downturn, but that hasn’t boosted confidence of developers. Growth of real estate development investment, considered a signal of whether the industry will help support growth, slowed to 3.5% in the first eight months this year. Any rebound in that figure, to be updated tomorrow, will allay housing concerns and possibly lift demand for commodities such as cement.
A less-watched figure tracking so-called paid-in capital will show how well developers are able to finance projects.
Yesterday’s data on infrastructure investment will show whether the concerted fiscal and monetary efforts have pumped capital to offset slowing private investment.
Policy makers have leaned heavily on infrastructure spending on roads and bridges to help boost growth. The central bank has expanded credit, the finance ministry has relaxed rules for local government borrowing, and the top economic planning body has approved 218 fixed-asset investment projects valued at 1.81tn yuan ($280bn) in the first three quarters.
Li has repeated that as long as employment remains healthy, slight changes in the pace of economic growth don’t matter. While the official unemployment data are too stable to be informative, a few job barometres will be updated: A labour demand and supply ratio released by the Ministry of Human Resources and Social Security is usually released around the same day as the GDP report.

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