China’s Economic Slowdown Intensifies. China’s economy grew by 4.6% in the third quarter, the slowest rate since early last year, falling short of the government’s 5% growth target. However, this growth was slightly better than analysts anticipated, and other figures like retail sales and factory output also exceeded expectations.
Recently, Beijing has introduced several measures to support economic growth, as this is the second consecutive quarter that China’s growth has fallen below the 5% target, raising government concerns. Eswar Prasad, former head of the IMF’s China division, warned that hitting the target now seems in jeopardy and would require significant stimulus in the fourth quarter.
China’s Economic Slowdown : Mixed Signals: Optimism Amid Property Sector Decline
However, Moody’s economist Harry Murphy Cruise remains optimistic, suggesting that the stimulus could help reach the target, though more action is needed to tackle underlying structural issues. Additionally, new home prices dropped in September at the fastest rate in nearly a decade, signaling a worsening property sector downturn.
Lynn Song, chief economist at ING, stated that the property market continues to be the main obstacle to China’s growth, noting that new investment won’t recover until home prices stabilize and housing inventories decrease.
In response, China’s central bank urged banks to increase lending to support growth, following the announcement of the largest stimulus package since the pandemic, which included cuts to interest and mortgage rates. Despite these efforts, China’s economy faces challenges from a property crisis and low consumer and business confidence.
Table of Contents
Watch : Liam Payne Dies at 31
