China reported its slowest quarterly growth figure in almost a decade, as a campaign to tackle mounting debt and trade frictions with the US had an effect, increasing the pressure on President Xi Jinping as his administration contends with the fallout from the continuing trade war with the US global financial crisis.
The world’s second-largest economy expanded 6.5 per cent year-on-year in the third quarter, marking China’s weakest quarterly growth figure since the depths of the 2008-09 global financial crisis.
The rate is down from 6.8 percent and 6.7 percent in the first and second quarters, respectively, but in line with a growth target of roughly 6.5 percent for the year set by China’s economic policymakers.
“Faced with an extremely complex environment abroad and the daunting task of reform and development at home”, China’s economic growth remained generally steady, said NBS spokesman Mao Shengyong.
The Chinese government, however, remains on track to exceed its full-year growth target of 6.5 per cent. The gross domestic product figure, reported by the National Bureau of Statistics, was lower than projections by many economists and analysts. In a report earlier this week, the Chinese Academy of Social Sciences predicted the economy would grow 6.6 per cent in both the third quarter and for the full year, before slowing to 6.3 per cent in 2019.
The data Friday showed fixed-asset investment ticked up 5.4 percent on-year in the January-September period from record lows the year earlier when Beijing was reining in spending on bridges, railways, and highways.
China’s cabinet has already indicated it will step up support and quicken infrastructure project approval in the coming months — though experts do not expect the measures to kick in until next year.
The gloomy export picture has reinforced the need for Beijing to rely on its legion of consumers to grow its economy.
Retail sales, a window into Beijing’s aim to get consumers spending to drive the economy, expanded 9.2 percent for the month compared with last year, from 9.0 percent in August and ahead of estimates.
Relations between the world’s two largest economies have soured sharply this year, as US President Donald Trump turned to hiking tariffs to force concessions in trade negotiations with Beijing.
Washington has hit roughly half of Chinese imports while Beijing has taken aim at most US imports.
Exports still drive a significant chunk of China’s economy and Washington’s tariffs targeting cars, machinery, electronics, consumer appliances and others have led many firms to shift production and hold off on further China investment.
So far exports to the US have held up but economists expect trade frictions to weigh on growth in the coming months and into next year.