China’s growth slips to 4.9% in third quarter
October 18, 2021 | 10:48 a.m.
BEIJING, China – China’s economic growth fell more than expected in the third quarter, official data showed on Monday, as the real estate industry grappled with tougher policy measures and an energy crisis loomed.
After a rapid rebound in coronaviruses, the recovery of the world’s second-largest economy is faltering, with gross domestic product growth of 4.9% year-on-year, the National Bureau of Statistics (NBS) said, citing a domestic market ” unstable and uneven “. rebound.
The latest figure fell short of expectations of 5.0% growth predicted by analysts polled by AFP, and was a sharp three percentage point decline from April’s 7.9% expansion to June.
“We must note that the current uncertainties on the international environment are increasing and that the national economic recovery is still unstable and uneven,” NBS spokesman Fu Linghui said on Monday.
But third-quarter GDP grew 0.2% over the previous three months, the authorities added.
At the same time, industrial production growth slowed further to 3.1% year-on-year in September.
“Growth has been held back by a slowdown in real estate, recently amplified by the fallout from the Evergrande woes,” said Louis Kuijs, head of the Asian economy at Oxford Economics.
The struggles of real estate giant Evergrande – under a mountain of debt worth more than $ 300 billion – weighed on sentiment among potential buyers.
Kuijs noted that there had been an “extra blow in September” due to power shortages and production cuts due to the strict implementation of climate and security targets by local governments.
He added that the damage was visible in the slowdown in industrial production.
Power rationing in recent weeks, along with soaring raw material costs and climate pressure from the government, have resulted in reduced mining and manufacturing activities.
But retail sales rose to 4.4% – an improvement from 2.5% in August – with fewer virus containment measures in China, which imposed rapid local lockdowns on a handful of cases.
The urban unemployment rate was 4.9% last month.
The Chinese government is trying to recalibrate the economy towards an economy driven by consumers and away from investment and exports.
But policymakers now have to distinguish between sustaining growth and controlling inflation, with ex-factory prices rising at their fastest pace in a quarter of a century.
Despite continued strong foreign demand, factors such as extreme weather and virus outbreaks – in addition to energy shortages and a cooling housing market – have all weighed on China’s economy, analysts say. .