Chinese GDP rose 1.3 percent on the quarter in the three months to September, picking up the increase of 0.5 percent recorded in the three months to June, with year-over-year growth slowing from 6.3 percent to 4.9 percent. Official PMI survey data showed stronger conditions in the manufacturing sector but weaker conditions in the non-manufacturing sector over the same period. Monthly data also published today showed stronger growth in industrial production and retail sales and slightly weaker growth in investment in September.

In a statement accompanying today's activity data, officials described China's economy as having"sustained the momentum of recovery and improvement" with both demand and production increasing. The statement provided little guidance, however, about whether officials consider that further policy support will be required, merely noting that policy is continuing to be implemented"in a precise and robust way" to expand domestic demand and boost confidence.

GDP and monthly activity data published today were stronger than expected. The China RPI and RPI-P rose from minus 41 to plus 16 and from minus 30 to plus 50 respectively, indicating that recent Chinese data in sum are now coming in above consensus forecasts.

Third-quarter GDP is expected to rise 1.0 percent versus the second quarter which would compare with 0.8 percent sequential growth from the first quarter. But the year-over-year expectation for the third quarter is growth of 4.5 percent which would be much slower than 6.3 percent growth in the second quarter.

Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country (or a region) during a certain period of time. GDP is the core indicator of the national accounts, and also an important indicator to measure the economic conditions and the level of development of a country or region. GDP is calculated from three approaches -- production, income and expenditure -- which reflect gross domestic product and its composition from different angles.

GDP is the all-inclusive measure of economic activity. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

The data are compiled by NBS and the People's Bank of China (PBoC). Estimates for non-financial corporations, financial corporations, general government, household and the rest of the world sectors are published. The production accounts, distribution and use of income account, and capital account data are compiled by NBS. NBS also develops the financial account by rearranging financial transactions data in the flow of funds accounts compiled by PBoC. There are no breakdowns of government consumption expenditure, gross fixed capital formation, change in inventories and net exports. Household consumption expenditures are broken down into urban and rural. The income components of GDP are only published in the input-output tables. NBS uses the Chinese Industrial Classification of the National Economy.