**Abstract**
After two consecutive quarters of economic slowdown, China’s GDP growth rebounded sharply to 7.8% in the third quarter of 2013, marking a strong recovery for the year. Zhao Xijun, deputy dean of the School of Finance at Renmin University, noted that the economy showed signs of renewed momentum during this period.
This rebound not only created a positive atmosphere ahead of the Third Plenary Session of the 18th CPC Central Committee in November but also signaled ongoing reform efforts under the new leadership. The government has been implementing structural changes, including regulatory improvements and policy adjustments, which have helped boost business confidence and investment.
The National Bureau of Statistics released comprehensive data on October 18, showing a broad-based recovery. In addition to the GDP growth rate rising, industrial output increased by 0.8 percentage points compared to the first half of the year, while investment and consumption also saw modest gains of 0.1 and 0.2 percentage points respectively.
Beyond traditional indicators, the “Keqiang Index,†which tracks power generation, railway freight, and long-term credit growth, continued its upward trend for four consecutive months since June. Given its lead over GDP, this suggests that economic momentum is likely to remain strong in the fourth quarter.
Many of these positive developments are linked to recent reforms. Sheng Laiyun, a spokesperson for the National Bureau of Statistics, highlighted that the government had introduced innovative macroeconomic management strategies, improved regulatory clarity, and boosted corporate confidence, encouraging more investment. Reforms such as decentralization and interest rate liberalization have also contributed to economic stability.
However, some analysts caution that the third-quarter rebound may be partly due to a low base from the previous year. Lu Zhengwei, chief economist at Industrial Bank, pointed out that private investment remains weak and corporate profits are still under pressure, suggesting the economy is in a phase of “weak recovery with fluctuations.†Recent data from September also hinted at this trend, with industrial output falling by 0.2 percentage points, retail sales dropping by 0.1, and industrial electricity consumption declining by nearly 4 percentage points.
With the upcoming Third Plenary Session of the 18th CPC Central Committee in November, market attention is shifting toward major reform discussions. Tang Jianwei of Bank of Communications noted that past economic cycles have benefited from key reforms, such as the establishment of a socialist market economy and WTO accession. This session is expected to unlock another wave of “reform dividends†and potentially start a new growth cycle.
Yet, Liu Yuanchun, deputy dean of the School of Economics at Renmin University, warned that major reforms often come with short-term challenges. While the market’s expectations have supported the current recovery, the process could bring both upward and downward pressures. As a result, China’s growth might slow slightly in the fourth quarter, with a more pronounced decline expected in the first quarter of 2014.
Despite these concerns, Sheng Laiyun emphasized that the Chinese economy is likely to remain stable overall. Even if growth slows in the coming quarters, the long-term fundamentals continue to improve due to ongoing reforms and structural adjustments.
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