In the third quarter, China’s economy grew at its weakest pace in a year, hampered by power shortages and real estate crises.
Attempts by Beijing to control financing to the property sector compounded the fallout from electricity shortages, sending manufacturing output back to levels last seen in early 2020, when harsh COVID-19 curbs were in place, resulting in GDP growth of 4.9%, below predictions.
China, the world’s second-largest economy, showed an impressive comeback from last year’s pandemic plunge, but the recovery has slowed since the first quarter’s massive 18.3% growth, according to CNBC.
What they are saying
Policymakers in China must now weigh the impact of those structural changes with measures to protect the economy and reduce the risk of contagion from a debt problem at China Evergrande Group, a key real estate developer.
“Since entering the third quarter, domestic and overseas risks and challenges have increased,” said Fu Linghui, spokesperson for the National Bureau of Statistics.
The power shortage had a “certain impact” on normal production, Fu said, but added that the economic impact “is controllable.”
In late September, many factories were forced to halt operations due to a spike in coal prices and a power shortfall, which drove local authorities to cut off power abruptly.
What you should know
- China’s GDP rose 4.9% in the third quarter from a year ago, according to the National Bureau of Statistics. This was below expectations for a 5.2% growth, predicted by analysts polled by Reuters.
- Industrial production increased by 3.1% in September, below the 4.5% predicted by Reuters.
- Fixed asset investment for the first three quarters of the year came in weaker than expected, data from the National Bureau of Statistics showed. It was up 7.3% from a year ago compared to the expected 7.9% figure.
