China's GDP Growth: An Important Rebalancing Milestone

China's GDP Growth: An Important Rebalancing Milestone by Andy Rothman, Matthews Asia

The Wall Street Journal and Financial Times share a pessimistic view of China’s third quarter macroeconomic results, with headlines declaring that 6.9% GDP growth was the slowest since 2009. From our perspective, however, the most important points are that retail sales growth accelerated slightly, signaling that consumers shrugged off the A-share market fall, and that for the first time ever, services and consumption accounted for over half of China’s GDP—an important milestone in the rebalancing process. Oh, and that 6.9% growth, on a base that is about 300% bigger than it was a decade ago (when GDP growth was 10%) means that the incremental expansion...