China stocks fell after slightly slower economic growth in the third quarter and soft property sales caused concern the economy will see further cooling. David Pollard reports
The flags fly in Beijing. This is the week of the Communist Party Congress. And when official numbers show an economy exceeding official targets. Even so, Chinese stocks fell on their announcement. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "Question is, why is that? ... A six point eight percent rise in Q3. A bit of a slow down compared to the prior quarter - that was fully expected. The details of the data show no alarming facts as far as I can see." Debt is a major red alert. Ratings agencies estimate China's debt burden at almost three times economic output. Its central bank chief now warning of the danger .... That debt and currency pressures could trigger a collapse in asset prices. It's not the first time: this video shows him uttering similar words back in March. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "Debt to GDP is at a really unsustainable ratio ...Whilst that is appears to be the case we haven't really seen the you know the worst outcomes from such such risks." And in the meantime, its bid to promote consumer demand over older industries could be working ... Retail sales in September up over 10 per cent on the year. As could its efforts to deleverage a red-hot property market. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "Fears of China's collapse have receded nicely from view at the moment. They seem to have managed to get the policy mix quite right and I think we should be relieved that the economy continues to grow." But growth in new construction has slowed. And property sales actually dropped in September for the first time in over two years. Efforts at control working - but also in danger of weighing on other sectors. That too a risk as China looks ahead to what its leaders call its 'new era'.