China | Q3 GDP shows some bottomed-out signals

Summary

There are some positive signals in 2023 Q3 GDP today, together with September economic indicators, suggesting the economy might pass the worst amid policy support.

Key points

• Key points:
• Q3 2023 GDP year-on-year growth bounced back to 4.9%, higher than the market consensus at 4.4% y/y and also our BBVA forecast at 4.1% y/y.
• The Q3 2023 GDP and September economic activities data suggest the economy is still resilient amid the authorities’ policy support to achieve soft-landing against the backdrop of a challenging domestic and international environment
• The bottomed-out signals in September seem to be broad-based, from both supply and demand side.
• Except for still weak fixed-asset investment which slightly missed previous readings which was primarily dragged by the housing market crash, all of the other indicators such as industrial production, retail sales, exports and imports, as well as credit indicators recorded further improvement from the previous month.
• However, we cannot ignore that the Chinese economy still faces a series of challenges going forward, thus there will still be a long haul to sustain a robust growth momentum.

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