China’s growth slows, but Xi lands softly

The Chinese National Bureau of Statistics this week released the numbers that everyone was waiting for. Analysts were predicting the nation’s growth figures for the third quarter would be tragic, given the stock market’s recent troubles. Some may have even hoped to see the Chinese giant in trouble.

The figures confirmed a drop: The growth rate of 6.9 percent was the lowest performance since 2009, when the long wave of the European crisis washed over the Chinese economy.

At the same time the numbers represent a source of serenity for Beijing, which avoided what could have been a hard landing. China is still standing, but for all its impressive-sounding economic numbers, when compared with the size of the population and the perceived quality of life, doesn’t make the leadership look good. President Xi Jinping stressed that the moment is certainly not excellent, but added that times are hard for all developing economies.

There are other significant internal market data that suggest the government’s desire to foster the “Chinese Dream” — an economy driven by consumption rather than exports — is coming to fruition. According to National Bureau of Statistics data, retail sales of consumer goods grew by 10.9 percent in September over the previous year. That’s 10.8 percent more than the growth in August and the highest growth rate since the beginning of 2015.

The most important number, the 6.9 percent growth rate, was greeted with a sign of relief in Beijing: It’s not the best, but it’s still better than the worst predictions, and they forecast an overall rate of 7 percent by the end of the year.

The value of industrial production in China increased by 5.7 percent in September from a year earlier, a decrease compared to 6.1 percent in August. The annual growth in the first three quarters was 6.2 percent, slightly lower than the 6.3 percent in the first eight months.

Manufacturing output increased by 6.7 percent in September, down from 6.8 percent in August. The growth in mining output slowed from 4 percent in August to 1.2 percent. Production in the electricity, heating, gas and water sectors increased by 0.7 percent, less than 1.2 percent the previous month. Services also grew, giving the Party leaders confidence in the short-term.

With these numbers in his pocket, Xi arrived in London yesterday and explained that China is ready for a “golden era” in relations with the United Kingdom. The warm welcome from England drew immediate comparisons to the iciness of Xi’s previous state visit to the United States, an attitude shift likely due to London’s break with Washington in agreeing to join an investment bank led by China.

The most important London-Beijing agreement to come out of the meetings is a massive investment in a new British nuclear plant.

Two state-owned Chinese companies would invest $25 billion and take a one-third stake in a project built by France’s EDF at Hinkley Point, in southwest England. The director of EDF Energy, Vincent de Rivaz, described Xi’s visit as a “timely opportunity” to close the deal.

Xi was also scheduled to meet today with the new Labour Party leader Jeremy Corbyn.

Originally published in Italian at il manifesto on Oct. 20 2015: http://ilmanifesto.it/pechino-cresce-al-69-xi-in-visita-a-londra/