China’s GDP rose 3.9 percent year-on-year in the third quarter, well below its full-year target, and revealing the scale of the economic challenges facing the country.
The annual growth rate, which analysts in a Bloomberg survey had forecast at 3.3 per cent, is below China’s full-year target of 5.5 per cent – already its lowest level in three decades.
The Chinese economy is suffering from a real estate crisis, strict coronavirus controls and lockdowns, which have largely limited the spread of the virus, but have also hampered consumer activity.
Monday’s data release helped spur a broad sell-off in Chinese stocks, with Hong Kong’s Hang Seng China Enterprises index down 5.7 percent, and the benchmark CSI 300 index of shares listed in Shanghai and Shenzhen falling by the same amount. 2 per cent.
“This is panic selling,” said Dickie Wong, head of research at Kingston Securities in Hong Kong. “It is quite clear that investors are not confident about the future of the Chinese economy.”
The release of the data, which was postponed from last Tuesday, comes after Chinese President Xi Jinping extended his rule for an unprecedented third term and Tighten his grip on political power At the Twentieth Congress of the Communist Party last week.
While the government offered no explanation for the delay, the move was widely seen as an attempt to avoid a distraction from the congress, which takes place once every five years, and reform the upper echelons of the Communist Party.
At the conference, nothing was mentioned much about China’s economic weaknesses He praised the anti-coronavirus measures, which include near-daily testing and quarantine rules that have effectively closed the country off from the rest of the world. In preparation for the event, China’s chief epidemiologist said there had been There is no timetable for relaxation.
The growth in the third quarter outpaced the second quarter’s increase of just 0.2 percent, when Shanghai, China’s largest city and financial center, was put under a two-month strict lockdown.
In September, retail sales rose only 2.5 percent, missing a Reuters forecast of 3.3 percent.
Industrial production, which underpinned Chinese growth in the first two years of the epidemic, rose 6.3 percent last month. That was better than analysts’ expectations of 4.5 percent, as the country’s manufacturing industry recovered from supply chain disruptions and shutdowns.
Investment in fixed assets rose 5.9 percent in the first nine months of the year. However, real estate sales, measured by floor area, fell 22 percent, new construction fell 38 percent, and real estate investment fell 8 percent.
Policymakers this year have increasingly relaxed key policy rates and taken measures to expedite completion of unfinished housing projects, which have been put on hold after a series of defaults at debt-laden developers such as Evergrande.
but they have He stopped short of implementing major stimulus measures It is now facing a weaker currency and the local stock market, which lost 34 percent after accounting for the renminbi’s decline against the dollar.