JP Morgan Asset Management believes the Chinese economy has entered a Goldilocks’ growth phase after gross domestic product grew by 8.9 per cent in the third quarter of this year.
The figure was up from 7.9 per cent in the second quarter, according to figures released by the National Bureau of Statistics.
JP Morgan Asset Management head of investment services Geoff Lewis says the figures prove China’s growth is sustainable and it is not about to overheat. He says the main point is the Q3 figures shows the economy is on a sustainable GDP and it is unlikely to result in any major policy tightening by the authorities.
He says: “Inflation has reached an inflection point and the trend has now turned up but the pace of increase is likely to be gradual. The People’s Bank of China will not feel too much concern while annual consumer price rises remain below a 3-4 per cent threshold.
“The evidence from other key economic indicators is that China’s economy is back on a strong, sustainable growth path that looks set to extend through next year into 2011 and beyond.”
Lewis says the figures end concerns that China’s growth is unsustainable. He says: “To overwork a phrase that one no longer hears in a US context, the Chinese economy has entered a Goldilocks’ growth phase where the porridge is neither too hot nor too cold, but just at the right temperature.”