Three of China's top financial officials launched a coordinated attempt to shore up confidence in the country's stock markets and economic prospects on Friday in an unusual expression of top-level concern over what one of them called "abnormal" share price falls.

The timing of the rare intervention by the heads of the central bank, securities commission and banking regulator — in interviews with Chinese media — comes amid a bruising stock downturn and were released ahead of data showing slowing economic growth.

"Momentum for the economy to maintain steady growth has increased," People's Bank of China governor Yi Gang was quoted saying.

"Overall, current stock market valuations are at historically low levels, which is in contrast with China's stable and improving economic fundamentals."

Markets are being pummelled by concerns over the economy, the escalating trade standoff with the United States and an official crackdown on excess debt leveraging in the financial system.

The government is becoming increasingly worried about the losses, which have made the country's markets the world's worst-performing in 2018, with the benchmark Shanghai Composite Index down around 30 percent from its January peak and sitting at four-year lows.

The comments by Yi as well as China Securities Regulatory Commission Chairman Liu Shiyu and Banking and Insurance Regulatory Commission chief Guo Shuqing are the most concerted effort yet in a series of recent top-level statements targeting concern over the equities decline and the economy.

They were aimed at easing fears China was swerving away from pledges of financial reform, and that private enterprises may suffer from a strengthening state hand on the economy.

Both the Shanghai index and the Shenzhen Composite Index, which tracks stocks on the country's second exchange, fell more than one percent at the opening on Friday.

But they quickly reversed course after the officials' comments and the economic growth figures filtered through the markets.

By late morning, the Shanghai index was up 0.65 percent, while Shenzhen gained 0.75 percent.

The government said the world's second-largest economy expanded 6.5 percent in July-September, the slowest quarterly pace in nine years.

Banking regulator Guo said Chinese financial markets have recently seen "a large number of abnormal fluctuations due to various factors, which is seriously out of line with China's economic development fundamentals and inconsistent with the overall soundness of China's financial system".

China's GDP growth slows to 6.5 percent in third quarter
Beijing (AFP) Oct 19, 2018 –

China's economy grew at its slowest pace in nine years in the third quarter, as a campaign to tackle mounting debt and trade frictions with the US had an effect.

The world's second largest economy expanded by 6.5 percent in the July-to-September period year-on-year, according to official GDP figures released Friday by China's National Bureau of Statistics.

The rate is down from 6.8 percent and 6.7 percent in the first and second quarters, respectively, but in line with a growth target of roughly 6.5 percent for the year set by China's economic policymakers.

"Faced with an extremely complex environment abroad and the daunting task of reform and development at home", China's economic growth remained generally steady, said NBS spokesman Mao Shengyong.

The trade row with the US comes at a tough time for China's economy, which has been hit by the government's efforts to tackle a mountain of debt, with credit tightening and infrastructure investment falling.

The data Friday showed fixed-asset investment ticked up 5.4 percent on-year in the January-September period from record lows the year earlier when Beijing was reining in spending on bridges, railways, and highways.

Analysts say the slowing growth could prompt an end to Beijing's fiscal prudence.

China's cabinet has already indicated it will step up support and quicken infrastructure project approval in the coming months — though experts do not expect the measures to kick in until next year.

The gloomy export picture has reinforced the need for Beijing to rely on its legion of consumers to grow its economy.

Retail sales, a window into Beijing's aim to get consumers spending to drive the economy, expanded 9.2 percent for the month compared with last year, from 9.0 percent in August and ahead of estimates.

– Trade war –

Relations between the world's two largest economies have soured sharply this year, as US President Donald Trump turned to hiking tariffs to force concessions in trade negotiations with Beijing.

Washington has hit roughly half of Chinese imports while Beijing has taken aim at most US imports.

Exports still drive a significant chunk of China's economy and Washington's tariffs targeting cars, machinery, electronics, consumer appliances and others have led many firms to shift production and hold off on further China investment.

So far exports to the US have held up but economists expect trade frictions to weigh on growth in the coming months and into next year.

The conflict has more directly hit confidence in China.

Shanghai's stock market has fallen by roughly a quarter this year, while the yuan has slipped about nine percent against the dollar.

"If the market becomes a bit panicked… that can dampen investment, investment and trade are closely linked so this can be a vicious cycle," said Lian Weicheng, an economist at the International Monetary Fund.

Business surveys already show many US and European firms halting investment plans for China as trade tensions cloud future prospects.