Fiscal stimulus fighting economic headwinds

China's economic policymakers are using stimulative fiscal and monetary policy for two purposes. First, they seek to cushion the economy's long-term transition to an economy driven by consumption, services, and higher value-added manufacturing. Second, they are also fighting headwinds largely caused by external factors - a slowing world economy and trade disputes.

The steady decline in top-line GDP growth - from 6.4 percent in the first quarter to 6.2 percent in the second quarter to 6.0 percent in the third quarter, as per the data released on Oct 18 - is exactly what is expected and needed.

The nation is moving from raw GDP growth toward an emphasis on improving the quality of citizens' lives. The National Bureau of Statistics' summary of the third-quarter data said: "Solid efforts were made to advance the 'three critical battles' of preventing and defusing financial risks, conducting targeted poverty eradication and controlling pollution."

And, the transition away from manufacturing to services (which are officially called the tertiary industry) continues. "The economic structure was optimized. In the first three quarters, the value added of the tertiary industry accounted for 54.0 percent of GDP, 0.6 percentage point higher than that of the same period last year," the NBS said in its summary.

However, this transition causes economic pain as old industries and jobs shrink and resources are redirected. One goal of macroeconomic policy is to reduce this pain