Chinese GDP growth steady in third quarter of 2016

China´s gross domestic product grew at a steady clip during the third quarter of 2016, but some economists cautioned that the expansion was running on borrowed time.

Official data showed GDP increased at a 6.7% year-on-year pace in the third quarter, exactly the same as over the previous two quarters, with a slight slowdown in construction and industry offset by quicker growth in services.

That was exactly as forecast by economists.

The rate of growth in construction and industry slowed from a 6.3% year-on-year clip to 6.1%, whereas output on the services side of the economy picked up from the 7.5% seen over the three months to June to 7.8%.

The GDP price deflator rose to a two-year high of 1.1%.

Economists at Capital Economics however were somewhat skeptical regarding the accuracy of those official figures.

Their China activity proxy indicated growth in fact accelerated from 4.4% year-on-year to 5.0%.

"The upshot from today’s data is that economic activity seems to be holding up reasonably well, with few signs that a renewed slowdown is just around the corner. Nonetheless, the recent recovery is ultimately on borrowed time given that it has been driven in large part by faster credit growth and a property market boom, both of which policymakers are now working to rein in.

"As the boost from policy stimulus begins to wear off, probably at some point early next year, continued structural drags mean the economy is set to begin slowing again," said Julian Evans-Pritchard, China economist at Capital Economics.