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Official data on Friday showed China’s economy grew 4.6% year-on-year in the third quarter, slower than the previous three months, suggesting growth is slowing as Beijing increase efforts to promote the economy.
The figure is the lowest in 18 months, below the government’s full-year target of 5% and below the 4.7% mark. recorded in the three months to June as sluggish consumption and asset decline weigh on household sentiment.
Weaker growth will underscore the need for more support from Beijing, which in late September announced its biggest monetary stimulus package since the pandemic and then policy stimulus economy. promises of strong fiscal spending.
“The Chinese economy is caught in a vicious cycle, with cyclical and structural problems complementing and reinforcing,” said Eswar Prasad, a professor at Cornell University and a senior fellow at Brookings. mutual”.
He said the combination of slowing growth, deflation and loss of confidence in government policies, coupled with a “slumping real estate sector and unfavorable demographics”, had posed challenges. huge challenge.
“The recently announced stimulus measures are a good start but. . . Creating more balanced growth driven by household consumption and private business investment is an even bigger challenge.”
Sheng Laiyun, deputy commissioner of the National Bureau of Statistics, said at a press conference Chinese economyChina’s growth rate is generally stable, while acknowledging that growth has fluctuated in the first three quarters of the year.
There are signs the economy is recovering, he said, but “we also know these are just preliminary changes, [the economy] does not have a strong enough foothold” and there will be more efforts to promote growth.
Goldman Sachs analysts said in a note that the third-quarter figures “generally outperformed low expectations”, thanks to stronger industrial production and fixed asset investment, supported by the issuance government bonds. Retail sales grew stronger after the government initiated a device exchange program.
Chinese markets reacted enthusiastically to news of monetary stimulus last month but have recently become cautious as they await further details on fiscal stimulus. The CSI 300 index of stocks listed in Shanghai and Shenzhen as well as Hong Kong’s Hang Seng index both fell in October, although they are still up year-to-date.
Efforts by the economic planning agency, the finance ministry and the housing ministry to boost confidence have fallen short of expectations. The Hang Seng Mainland Properties index fell 6.7% on Thursday after The Ministry of Housing supports the real estate sector Investors are disappointed.
Authorities have not yet quantified the additional financial spending, but analysts said it could be announced at a standing committee meeting of the National People’s Congress, the parliament. China, in the coming weeks.
NBS said on Friday that industrial production rose 5.4% year-on-year in September, exceeding the expectations of analysts polled by Reuters and the previous month’s 4.5%.
Retail sales increased 3.2% year-on-year in September, exceeding analysts’ expectations of 2.5%. Investment in fixed assets rose 3.4% in the first three quarters of 2024 from the same period last year, slightly exceeding the forecasts of analysts polled by Reuters.
Analysts expressed concern that important measures aimed at directly boosting household consumption were largely absent from the stimulus measures.
The Ministry of Finance’s financial plans mainly focus on helping local governments refinance their debts, recapitalize state banks and support the purchase of some of the millions of unoccupied homes. Sellable from China.
