China’s Q3 GDP growth slowest since 2009

Written by admin on 18/09/2019 Categories: 苏州美甲

China’s economy grew slower than expected last quarter amid a trade war with the US.China’s economic growth cooled to its weakest pace since the global financial crisis in the third quarter, with regulators pledging further policy support as a years-long campaign to tackle debt risks and the trade war with the United States began to bite.
苏州美甲

Chinese authorities are trying to navigate through numerous challenges, as the trade war fears have sparked a blistering selloff in domestic stock markets and a steep decline in the value of the yuan versus the dollar, heightening worries about the growth outlook.

The economy grew 6.5 per cent in the third quarter from a year earlier, slower than 6.7 per cent in the second quarter, the National Bureau of Statistics said on Friday.

Analysts polled by Reuters had expected the economy to expand 6.6 per cent in the July-September quarter.

The GDP reading was the weakest year-on-year quarterly growth since the first quarter of 2009 at the height of the global financial crisis.

“The trend of slowdown is strengthening despite Chinese authorities’ pledge to encourage domestic investment to support the economy. Domestic demand turned out weaker than unexpectedly solid exports,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo.

After another big decline in Chinese stocks on Thursday, policymakers sought to soothe markets, with central bank governor Yi Gang saying equity valuations are not in line with economic fundamentals.

Yi and senior regulators pledged targeted measures to help ease firms’ financing problems and encourage commercial banks to boost lending to private firms.

The Shanghai Composite index, which slumped more than 1 per cent in early trade, bounced back following the comments to be virtually flat at the midday break.

Third quarter growth was dragged down by the weakest factory output since February 2016 in September as automobile makers cut production by over 10 per cent amid a sales slowdown.

“The 6.5 per cent figure is definitely below our consensus expectations. Weakness is largely coming from the secondary industry – most notably manufacturing. We may review our Q4 forecasts,” said Betty Wang, senior China economist at ANZ in Hong Kong.

Recent economic data have pointed to weakening domestic demand with softness across factory activity to infrastructure investment and consumer spending, as a multi-year crackdown on riskier lending and debt has pushed up companies’ borrowing costs.

Before the data release, economists had expected China’s full-year growth to come in at 6.6 per cent this year – comfortably meeting the government’s 6.5 per cent target – and 6.3 per cent next year.

But now some say growth could slow even more dramatically next year.

“Looking ahead, the economic outlook is not optimistic with exports facing further headwinds as US tariffs kick in and demand from emerging countries ebbs. GDP growth is likely to slow to 6.0-6.2 per cent next year,” said Nie Wen, an analyst at Hwabao Trust Shanghai.

Beijing and Washington have slapped tit-for-tat tariffs on each other in recent months, sparked by US President Donald Trump’demands for sweeping changes to China’s intellectual property, industrial subsidy and trade policies.

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