China’s economic output increased by 6.9 per cent in the third quarter, year-on-year — its most sluggish performance since the global financial crisis — according to data published this week.

But behind this lacklustre number, China’s consumers are spending more and the job market appears robust (see charts), which makes certain sectors of the economy a potentially attractive investment.

Five years ago, China achieved double-digit growth, which the government created by pouring debt into new railways, roads and bridges and allowing abundant credit to create a property bubble.

While the stimulus investing has slowed, China’s retailers, travel and tourism groups and passenger transport companies that make up the so-called service sector are still doing well. This services sector grew 8.6 per cent year-on-year, in the third quarter, up from 8.4 per cent in the first half.

“The Chinese economy is undoubtedly shifting towards consumption,” said Julian Evans Pritchard, analyst at Capital Economics. “Chinese statistics can be unreliable, but on a number of measures we monitor, from passenger rail transport to the distances people are travelling, to air travel to courier services to electricity consumption, the services sector is healthy.”

Why is China’s services sector doing relatively well?

With little in the way of a traditional welfare state, China has long been a nation of savers. But spending on non-essential goods and services has been on the rise. Caravan parks are growing in popularity, while China accounted for $4.8bn of box office receipts last year, according to the Motion Picture Association of America. The government has also thrown its weight behind leisure spending as it helps rebalance the economy away from investment. In July, Chinese state news agency Xinhua publicised a “camping market” in the hills outside the western Chinese city of Chongqing, wher stallholders sell goods, from “designer wedding dresses to Spanish wine,” from their tents.

Ok, so how do I invest in that?

That is the hard part. Because of weak accounting and corporate governance standards in China, and the risk that a company or an entire industry can suddenly fall out of favour with the Communist Party leadership, buying shares in Chinese companies is a high-risk activity.

Gome provides a case study in what can go wrong. The electricals retailer was founded by Huang Guangyu, an entrepreneur who was once China’s richest man. He is now one of the country’s richest prisoners, havin been jailed in 2010 for 14 years for insider trading and bribery, which are punishments that China’s politically controlled courts impose selecively. The company remains in good health, and superficially offers a good consumer growth story, as more Chinese households are buying washing machines and fridges. But in July, Gome’s shares plunged 15 per cent in a day after the retailer bought some assets fro the jailed Mr Huang at what analysts said was an inflated price.

Can I invest in assets that track China consumer spending?

Cautious investors can gain exposure to growth without actually investing in Chinese shares, though this used to be much easier. In the days of double-digit growth fuelled by fixed asset investment, global or Australian miners of materials such as copper and iron ore were a popular choice.

Tom Stevenson, Fidelity investment director, says it is worth looking at Japanese companies that benefit from growth in Chinese tourism, as Japan has better corporate governance and accounting standards than less developed countries in Asia.

Tempted by the weak yen, Chinese tourists have been flocking to Japan to buy basic goods they traditionally prefer purchasing abroad, such as vitamins, nappies and toilet seats. Kao Corporation, a Japanese group which makes a brand of nappies called Merries that are popular in China, is currently a darling of western asset managers. Its shares, however, reflect that enthusiasm, currently trading on 32 times forecast earnings.

Are there any managed funds I can use?

There are many, with scores of managers prioritising the consumer sector.

China has humbled many a professional investor, though. A China fund run by Fidelity’s Anthony Bolton, who was considered a stockpicking guru in the UK, did less well than investors expected. When he retired two years ago, he admitted he had got many things wrong about the market.

There are some managers of pan-Asian funds who are playing the Chinese consumer boom without owning too many risky Chinese companies. One is Angus Tulloch, who runs the First State Asia Pacific Leaders fund and whose second-biggest holding is Taiwan Semiconductor Manufacturing Corp, a huge supplier of the chips that power Chinese smartphones. His third-largest is Hong Kong conglomerate CK Hutchison, which owns a clutch of retailers in the territory, from drugstore Watsons to electricals chain Fortress, that are popular with shoppers visiting from mainland China.

Mr Tulloch’s fund charges a hefty initial entry fee of 4 per cent, followed by a 1.6 per cent annual fee. In the past 12 months it has returned minus 6.8 per cent. Trustnet, however, points out that Mr Tulloch has “over a long track record” outperformed his peers “more often than not”.

Are there any exchange traded funds?

Research has regularly shown that most active fund managers cannot beat the market, and of course any star manager’s past performance is no indication of how they will fare in the future. Exchange-traded funds, which are lower-cost instruments that passively track a basket of stocks, are another option. According to the ETFDB database, there is one such tracker available, the Global X China Consumer ETF. It is listed on the New York Stock Exchange, however, so British investors may want to seek advice from a stockbroker or financial adviser to decide whether it is suitable for them.