China’s economy grows faster than expected, but falls short of target as risks

China’s economy grows faster than expected, but falls short of target as risks
by Harold Vazquez October 24, 2022 in Finance
China’s economy grows faster than expected, but falls short of target as risks
China’s economy bounced back at a faster-than-expected pace in the third quarter, but tighter COVID-19 restrictions and fears of a global recession meant growth was still well below the country’s full-year target.

GDP in the world’s second-largest economy grew 3.9% year-on-year in the July to September quarter, official data showed on Monday. That was above the 3.4% forecast in a Reuters poll of analysts.

Several surveys of economic analysts forecast full-year growth to slow to between 3.2% and 3.4% in 2022, well short of the official target of around 5.5%, which marks China’s weakest growth in four decades. except in 2020 when most of the world’s economy was shut down. to Covid-19. The Chinese economy is facing challenges on many fronts at home and abroad.

China’s zero-Covid strategy has suppressed domestic consumption, while it is also battling a crisis in the real estate sector – one of the biggest contributors to GDP. Beijing began cracking down on excessive debt in 2020, after years of explosive growth due to easy access to credit. Property sales are now falling across the country, leaving many developers struggling and some owners refusing to pay their mortgages for unfinished homes.

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A global recession caused by the war in Ukraine and rising interest rates has cooled demand for Chinese goods, although exports still rose 5.7% in September from a year earlier, beating expectations.

Retail sales grew 2.5% in September, well short of forecasts for 3.3% growth, and coming in at less than half of August’s retail growth of 5.4%. In a sign of declining domestic demand, Tesla has cut prices of its Model 3 and Model Y cars by up to 9% in China, the world’s largest auto market.

The quarter’s economic data was originally scheduled for release on October 18, but was delayed until after last week’s Communist Party Congress saw Xi Jinping extend his leadership for an unprecedented third term and a meeting with loyalists. Introducing the Governing Body.

Policymakers in China have implemented more than 50 economic aid measures since the end of May to bolster the economy to ease job pressure. Political leaders have downplayed the importance of meeting the official growth target of 5.5%, which was set in March.

Speaking two weeks ago, Zhao Chenxin, a senior official at the National Development and Reform Commission, said “from a global perspective, China’s economic performance is still excellent”.

China’s growth has outperformed major economies such as the US, Japan and the European Union, but has slowed significantly in recent years.

Reuters contributed to this report

Source: www.theguardian.com