The Chinese economy appeared to have grown moderately in the third quarter despite several government measures to achieve a speedy recovery in the world’s second-largest economy that is facing weak demand and a property crisis during the post-COVID period, a survey showed.
The growth in the country’s gross domestic product (GDP) is seen at 4.3% in the July-September period, less than the more ambitious projections of a sustained recovery and against a 6.3% rise in the second quarter, according to analysts polled by AFP Monday.
This is also against the government’s set target of around 5% growth for 2023—one of its lowest growth rates in recent years.
China’s economy grew 3% in 2022, short of the official target of 5.5%.
Earlier this month, the World Bank kept its 2023 economic growth forecast for China unchanged at 5.1% but lowered its 2024 outlook to 4.4% from 4.8%.
The multilateral lender said that China faces persistent domestic difficulties, highlighting the fading of the bounce back from the re-opening of the economy, elevated debt, and weakness in the property sector.
“Troubles in the property sector have spilled over into wider consumer activity and translated into consumers still spending a smaller share of their income relative to pre-Covid,” Capital Economics’ Sheana Yue told AFP.
Real estate was once a driving force for the economy, but several developers are now struggling to repay debts and overcome a crisis of confidence among potential buyers.
Last month, China Evergrande Group said it faces major uncertainties in restructuring its international debt. With a mounting $327 billion debt, the company faces a hearing on October 30 in Hong Kong to wind up the firm.
“The main challenge is still housing. Given the large stock of empty homes, the aging population, and the end of speculation fever, we expect home sales to remain subdued for years to come,” noted Gene Ma of the Institute of International Finance while responding to the survey.
Exports, a significant economic growth engine, have also eased this year. According to the latest data released Friday, China’s shipments fell by 6.2% year-on-year in September, against an 8.8% drop in the previous month.
Beijing is considering $137 billion (1 trillion yuan) in stimulus during the last quarter of this year, Robobank’s Teeuwe Mevissen told AFP, citing some sources.
