China’s Third-Quarter Economic Growth Slows Sharply to 4.9%



China’s economy grew 4.9% in the third quarter from a year earlier, slowing sharply from the previous quarter’s 7.9% growth rate, as power shortages and supply-chain problems added to the impact from Beijing’s efforts to rein in the real estate and technology sectors.To get more China business latest news, you can visit shine news official website.

While many economists expected China’s year-over-year growth to trend lower in the second half of 2021, based in part on statistical comparisons to last year, the scale of the third-quarter slowdown was sharper than expected, falling short of the 5.1% growth forecast by economists polled last week by The Wall Street Journal.

The slower-than-expected gross domestic product growth reflects a range of factors, including policy makers’ decision to pare back stimulus enacted in the immediate aftermath of the pandemic last year; a crackdown on the technology, private education and real-estate sectors; energy snafus caused in part by soaring coal prices and more aggressive energy targets; and disruptions to the supply chain caused by Covid-19 outbreaks, semiconductor shortages and port shutdowns.

When compared with the second quarter, China’s GDP inched up just 0.2% in the three months ended Sept. 30, according to data released Monday by the National Bureau of Statistics. In the second quarter, China’s GDP rose 1.3% from the prior quarter.

Despite the third-quarter slowdown, economists are generally confident that the Chinese economy will be able to make senior leaders’ annual GDP growth target of 6% or more, which was set in March.

For the first nine months of the year, China’s GDP expanded 9.8% compared with a year earlier, the statistics bureau said.

Fu Linghui, a spokesman for the statistics bureau, highlighted the economy’s ability to maintain its post-pandemic rebound in the first nine months of the year, even in the face of what he described as the country “carrying forward its structural adjustments,” a reference to the government’s campaigns to deal with debt and inequality.

In an acknowledgment of the mounting risks to the economy, Mr. Fu said that “there are increasing uncertainties in the external environment, while the domestic economic recovery is unstable and unbalanced.”Now that the statistical distortions from the pandemic are largely in the past, China’s growth rate is expected to return to around its pre-coronavirus trajectory. Before China began feeling the impact of the pandemic early last year, its economy expanded at a pace of 6.1% in 2019, the slowest such year-over-year growth rate since 1990.

China was the only major global economy to grow during last year’s pandemic-induced slowdown; its economy expanded 2.3%. With most economists expecting growth of 8% or more this year, Beijing policy makers instead set a relatively modest full-year GDP target of 6% or more for 2021, giving it more room to deal with long-festering issues in the economy—chief among them dizzying debt levels, particularly in the real-estate sector.

The question now is whether Beijing’s campaign to impose greater discipline on its economy—as well as surging commodity costs and continued coronavirus-related distortions in the global economy—will take a larger-than-expected toll and force policy makers to re-emphasize growth.

Despite the sharp slowdown in the third quarter, China’s policy makers so far appear to be relatively sanguine about the headwinds facing the economy.

On Friday, China central bank officials suggested it wouldn’t resort to a relatively large stimulus to drive up the growth rate in the final quarter of the year, for example by flooding the financial system with liquidity or slashing benchmark interest rates.

Officials also played down risks from the debt crisis at China Evergrande Group, the country’s most indebted property concern, whose troubles have rattled markets and raised questions about China’s overall economic and financial health.