China’s economy hit its slowest pace of growth in a year in the third quarter, hurt by power shortages, supply chain bottlenecks and major wobbles in the property market and raising pressure on policymakers to do more to prop up the faltering recovery.
Data released on Monday (October 18) showed gross domestic product (GDP) grew 4.9% in July-September from a year earlier, the weakest clip since the third quarter of 2020 and missing forecasts. Despite the drop in growth, the government says it is confident that targets will be met.
The economy “has the ability and conditions to complete the expected goals and tasks for economic and social development throughout the year,” National Bureau of Statistics (NBS) spokesperson Fu Linghui told a news conference in Beijing on Monday.
The world’s second-largest economy is facing several major challenges, including the China Evergrande Group debt crisis, ongoing supply chain delays and a critical electricity crunch, which sent factory output to its weakest since early 2020, when heavy COVID-19 curbs were in place.
The weak numbers sent the yuan and most Asian stock markets lower amid broader investor concerns about the world economic recovery. Global worries about a possible spillover of credit risk from China’s property sector into the wider economy have also intensified as major developer China Evergrande Group wrestles with more than $300 billion of debt.
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