Economists: slowing GDP growth in China will impact directly on Russia

In China recorded the maximum decline in the growth rate of the national economy since March 2009, however, the concern of the market, according to analysts, is connected not with the mentioned data and indirect dependence of the dynamics of oil prices.

MOSCOW, 19 Oct. Statistics, which recorded a slowdown in China’s GDP growth in the third quarter, will not have a direct influence on the situation in the Russian economy, the market perceived it as a lack of news, experts interviewed.

Earlier on Monday, the state statistical Bureau of China reported that the growth rate of China’s GDP in the third quarter slowed in annual terms to 6.9%, the worst figure since March 2009. The indicator was slightly above expectations of economists who had forecast a slowdown to 6.8%. GDP growth amounted in the first quarter in annual terms by 7% in the second quarter — 7%.

In March this year, Premier Li Keqiang announced that the government expects in 2015, GDP growth is near 7%.

Indirect impact

The President of “Sino-Russian analytical centre” Sergey Sanakoev believes that the direct dependence between the dynamics of GDP of China and the Russian economy at the moment, no. “I think that there is no direct relationship. Except that there is indirect: when growth slows down Chinese economy at least for small values, the falling oil price, which is always a heavy toll,” said the expert.

“On the contrary, now all the negative aspects and the Russian and Chinese economy, we are well able to rectify through bilateral cooperation projects. So I would say that all of this only dictates the need and opportunities to establish an even closer integration mechanisms and industrial cooperation”, — said Sanakoev.

Chief economist of Alfa Bank Natalia Orlova notes that the market perceived the publication of the figures “as a lack of news.” “This does not remove the concern that the market has, and, perhaps, even increases, because, strictly speaking, the GDP statistics cannot say anything,” she said.

Market confidence

According to Orlova, the bigger concern to market participants at the moment is not because of a slowdown in China, and the fact that the dynamics of GDP in Russia is becoming less reflects structural changes in the economy.

“In particular, there is quite a significant slowdown in industrial output and a growing gap between the growth rates of the economy and its more specific indicators of economic activity,” continues Orlova. Industrial output in China in September in annual terms grew by 5.7%, while analysts had expected it to be 6%.

“So on the one hand digit (of GDP growth — ed.) by itself is not bad, but on the other side of the market less and less confidence in the relevance of the figures for GDP growth. That is more and more attention of the market draws on more detailed numbers,” says Orlov.

Sanakoev noted that the Chinese economy in recent years have shown large growth rates. “If you remember 2009-2010, it so happened that the whole world has emerged from its financial crisis thanks to China… he was like a draft horse that pulled the whole world. I would say that China was tired of this role draft horses, and they think that even 7% is a pretty high growth rate,” he notes.

According to the expert, the authorities are even willing to talk about the growth by 6.5% or even 6%, but not below. Six and a half percent is what the Chinese consider “Golden mean” when it is not necessary to overheat the economy, and it is possible to progressively develop, says Sanakoev.