Statistics from August give analysts grist for mill

Chen Yulu, a member of the People's Bank of China's monetary policy committee, was quoted by Chinese media as saying: "It is not time for an interest rate cut. That's a strong signal, and we should refrain from using it as much as possible. The central bank has an ample number of tools to use, such as targeted easing and open market operations."

Cao Yuanzheng, chief economist with Bank of China Ltd, argued that an interest or reserve ratio cut will not help much, as the problem is weak growth momentum, severe overcapacity and slack loan demand.

"A single month's data are too little on which to draw conclusions. The growth rate has apparently slid by a floor. The problem is whether the economy can stand firm at the lower floor," Cao said.

A commentary in a newspaper affiliated with the official Xinhua News Agency went further, with a criticism of foreign institutions' push for stimulus despite Li's statements: "The reliance on government 'paternalism' is ingrained in many people's souls ... They ignore the fact that the economy has entered a 'new normal'."

sound bites

"It is not time for an interest rate cut. That's a strong signal, and we should refrain from using it as much as possible. The central bank has an ample number of tools to use, such as targeted easing and open market operations."

Chen Yulu, member of the monetary policy committee, People's Bank of China

"It hink, for sure, more stimulus measures will be rolled out, with a bigger chance the government will take a more aggressive approach on interest rates. Before this data, I thought there was a 10 percent chance of a broad interest rate cut. But when you look at this terrible industrial production data in August, I see a 50 percent chance for a broad general interest rate cut. I think they need to do something a little more aggressive."

Larry Hu, economist, Macquarie Group Ltd

"Although a rate cut seems unlikely at the moment given the government's policy rhetoric, we believe a further slowdown in economic activity and growing deflationary pressure will make it a possibility in the next one or two quarters ... Given the third quarter's weaker-than-expected growth thus far, we revise down our GDP growth forecast for the third quarter from 7.3 percent to 7.1 percent and that for 2014 from 7.3 percent to 7.2 percent."

Wang Tao, economist, UBS AG

"We do not believe the government will use massive stimulus measures to support the economy, as employment conditions remain relatively healthy ... we believe the government will speed up structural reforms. More efforts will be given to financial reform (including the establishment of private banks and further improvements to the capital market), State-owned enterprise reform [including price reforms for energy, pharmaceuticals and healthcare and the removal of State monopolies], reform to change government functions and finally, fiscal reform, which would help lower companies' tax burdens."

Zhang Fan, economist, CIMB Group Holdings Bhd