The Chinese economy is slowing down; officials say recovery is ‘unstable and uneven’

The Chinese economy is slowing down; officials say recovery is ‘unstable and uneven’

China’s economy grew at the slowest pace in a year in the three months that ended in September, rocked by power shortages, bottlenecks and sporadic outbreaks of COVID-19, increasing the pressure on decision-makers amid growing concern about the health of the real estate sector.
Data released on Monday showed gross domestic product (GDP) increased 4.9% in the third quarter, compared with a year earlier, the slowest since the third quarter of 2020. Growth was also below expectations economists with a Reuters poll of analysts forecasting GDP. to increase by 5.2 percent and an AFP news agency poll predicting growth of 5 percent.

“We must note that the current uncertainties on the international environment are increasing and that the national economic recovery is still unstable and uneven,” said Fu Linghui, spokesperson for the National Bureau of Statistics (NBS) on Monday.

China’s economy, the second in the world, grew 7.9% in the second quarter and 18.3% in the first quarter, which benefited from the comparison with the crisis caused by COVID-19 in early 2020 .

At the same time, industrial production growth slowed further to 3.1% year-on-year in September.

“Growth has been hampered by a slowdown in real estate, recently amplified by the fallout from the woes of Evergrande,” Louis Kuijs, head of the Asian economy at Oxford Economics, told AFP.

Concerns grow about real estate, with industry giant Evergrande grappling with more than $ 300 billion in debt [Thomas Peter/Reuters]

The struggles of real estate giant Evergrande – battling over $ 300 billion in debt – have made potential buyers cautious.

Kuijs noted that there had been an “extra blow in September” of 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.

Victor Gao, vice president of the Center for China and Globalization in Beijing, told Al Jazeera the latest data was “lower,” but added that China remained “confident” that it could achieve growth of around 8%. % for the year.

“It would make China one, if not the best, of the world’s largest economies,” he said.

Chinese leaders, fearing a lingering real estate bubble could undermine the country’s long-term rise, are likely to maintain tight restrictions on the sector even as the economy slows, but could ease some measures if necessary, said officials. political sources and analysts.

“In response to the dismal growth figures we expect in the coming months, we believe policymakers will take more action to support growth, including by accelerating infrastructure development and easing aspects of overall credit and debt policies. real estate, ”Kuijs told Reuters news agency.

Premier Li Keqiang said on Thursday that China has many tools to cope with economic challenges despite slower growth, and the government is confident of achieving development goals for the entire year.

Retail sales rose to 4.4% -om 2.5% in August – with fewer virus containment measures in China, which imposed rapid local lockdowns on a handful of coronavirus cases.


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