Key Highlights:
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In Q3 2024 (July-September), China's GDP grew by 4.6% year-on-year (YoY), continuing its slowdown from the second quarter (4.7%). The YoY growth rate for the first three quarters was 4.8%.
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Among the three engines of economy growth, consumption saw slight improvement, investment remained relatively stable, and exports showed resilience.
Consumption: In Q3, China's total retail sales of consumer goods grew by 2.7% year-on-year (YoY) and increased by 1.7% quarter-on-quarter (QoQ), driven by summer holiday travel and trade-in subsidies. Energy consumption data shows a notable acceleration in the YoY growth rate of electricity consumption in the tertiary industry, with the rate increasing by 4.9 percentage points from July to 12.7% in September. However, gasoline consumption showed a downward trend, declining by 4.7% YoY in the third quarter. This decline may be linked to the accelerated adoption of electric vehicles (EVs), as their share in new passenger vehicle sales surpassed 50% for three consecutive months, reaching 53.2% in September.
Source: China NBS, GL Consulting
Source: CPCA, Mysteel Data, GL Consulting
Investment: From January to September, fixed asset investment rose by 3.4% YoY, flat with the growth rate in the first eight months, ending a five-month streak of declining growth. This could be attributed to a slight rebound in manufacturing investment and the initial stabilization in the real estate market. Infrastructure investment increased by 4.1% YoY, marking the slowest growth since early 2022. This slowdown may be due to the decelerated issuance of special-purpose bonds and extreme weather conditions. The deceleration in infrastructure, combined with the rapid adoption of LNG in the transportation sector, weighed on diesel demand. In Q3, diesel consumption dropped by 7.3% YoY. In contrast, the average sales per LNG refueling station surged by 44.2% YoY in September.
Source: NBS, GL Consulting
Exports: In Q3, China's total export value grew by 5.4% YoY, narrowing by 3.3 percentage points compared to Q2. In September, the YoY growth rate slowed by 6.3 percentage points from August, primarily due to the extreme weather, global shipping disruptions, and container shortages.
Outlook for Q4 2024: The market is closely watching the impact of the Chinese central government's incremental policies, including those aimed at stabilizing the real estate market, on economic indicators. By the end of October, China plans to allocate 200 billion yuan for its 2025 investment plan, targeting key infrastructure projects and central budgetary investments. Furthermore, there are 2.3 trillion yuan in special bond funds available for use in Q4, offering financial support to stimulate investment growth.
Source: Compiled by GL Consulting based on data published by agencies