China’s Economy Gains Speed, but Challenges Loom

Key Takeaways

• China’s third quarter economic performance put the economy on track to reach its 5 percent annual growth target, but systemic economic problems complicate longer term growth prospects.
• Retail sales and industrial output both boosted growth in the third quarter, though concerns over deflation persist, which could further stymie demand and industrial profits.
• Next week the government is expected to hold the twice-a-decade National Financial Work Conference, where more details could emerge on China’s plans to address the property sector and local government debt challenges.