China economy at its lowest ebb since financial meltdown
This picture taken on October 18, 2015 shows buildings in a residential district covered with smog in Lianyungang, east China’s Jiangsu province. China’s economic growth slowed to 6.9 per cent in the third quarter, authorities in the world’s second-largest economy said yesterday, as global markets worry about its prospects.. PHOTO | AFP
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Gross domestic product (GDP) in the world’s second-largest economy grew at just 6.9 percent in the third quarter, its slowest rate in six years.
Beijing. China’s economy logged its worst performance since the global financial crisis, official figures showed yesterday, with analysts warning it is likely to worsen and the government must do more to avert a sharp slowdown.
Gross domestic product (GDP) in the world’s second-largest economy grew at just 6.9 percent in the third quarter, its slowest rate in six years.
The figures added to fears over the health of the global economy, and some analysts expressed concern they had been manipulated to understate the gravity of the situation. “China’s economic growth is still sluggish with many risks remaining unresolved,” ANZ Banking Group chief economist for Greater China Liu Ligang told AFP. “We should not be over-optimistic. China’s economic growth will continue to slow down,” he said, adding he estimated GDP would expand 6.4 per cent next year. China’s decades-long boom, fuelled by infrastructure investment, exports and debt, made it a key driver of the global economy.
Even though growth has eased in recent years its GDP more than doubled in real terms between 2006 and 2014, according to World Bank figures. Now it is looking to transition to a “new normal” of slower and more sustainable expansion driven by domestic consumer demand, but the change is proving bumpy and stock exchanges around the world have been pummelled in recent weeks by concerns over its future.
Monday’s figure from the National Bureau of Statistics (NBS) was the worst since the first quarter of 2009, although it was marginally above the median forecast in a poll of analysts by AFP.
It was also the first official confirmation of investors’ fears over GDP since a Chinese stock market slump over the summer followed by a surprise currency devaluation in August. Analysts now widely expect Beijing to further boost fiscal spending and ease monetary policy to prevent a sharper slowdown. China has already cut interest rates five times in a year and reduced the amount of cash banks must hold in a bid to boost lending.
In a research note, Louis Kuijs of Oxford Economics anticipated Beijing would take “additional incremental measures... but without going for major stimulus”. (AFP)
