Where Am I?
 
More In This Section
 
Tag Cloud
 

Economic Overview. Softlanding: China’s GDP Growth Expands at Slowest Pace in Two Years

BritCham / CBBC
Do you like this article? Share it with your friends!  
Like! Tweet! Weibo Share on LinkedIn
 

The National Bureau of Statistics announced on Tuesday that China’s GDP expanded 9.1% in the third quarter from a year earlier. This is the slowest pace in more than two years and down from 9.5% growth in the second quarter, which is likely to add to the consensus that the country is on track for a “soft landing” of moderate growth and cooling inflation.

The consumer price index rose 6.1% from a year earlier in September, down from a three year high of 6.5% in July, indicating that inflation has peeked and the tightening monetary policies introduced by Beijing are slowing the country’s overheated growth

Overall, the economy has slowed for three consecutive quarters, easing from 9.8% in the fourth quarter of last year, 9.7% in the first quarter of this year and 9.5% in the second quarter.

Tightening Measures
Beijing lifted interest rates five times time since last October and ordered banks to reduce lending as well as imposing limits of home prices to calm rapidly rising house prices.

This has led many small export-oriented businesses to face their toughest time in years, and SMEs are struggling to get the loans they need, despite the government providing limited tax relief and ordering banks to offer easier access to credit.

Economists are now divided over the next steps the government will take; some expect an imminent loosening on its policy stance, while others believe the government is likely to keep the status quo until the end of the year

Exports
The weaknesses in external markets like Europe and the US will weigh heavily on China’s exports in the near future, but China is becoming less dependent on foreign trade for growth. A spokesman for China’s National Bureau of Statistics stated that net exports actually made a negative contribution to growth, shaving 0.1 % off the economic growth rate. In the third quarter, growth in China’s imports of goods and services has exceeded export growth.

Risks
Economists have stated that the biggest risks facing the Chinese economy are a steep fall in global demand for Chinese exports from advanced nations, or a collapse in the Chinese real estate market. However, the real estate market showed signs of cooling as prices remained flat in September.

Source: The Economist, Financial Times, Dow Jones Newswires,
 
 

Follow us