China GDP: economic recovery stalls, growth slows to 4.9 per cent in third quarter
- China’s economy grew by 4.9 per cent in the third quarter of 2021 compared with a year earlier, down from the 7.9 per cent growth seen in the second quarter
- Retail sales and industrial production rose by 4.4 per cent and 3.1 per cent, respectively, in September from a year earlier
China’s economy grew by 4.9 per cent in the third quarter of 2021 compared with a year earlier, the National Bureau of Statistics (NBS) announced on Monday.
In the first three quarters of the year, China’s economy grew by 9.8 per cent, year on year.
Consumption contributed around 64.8 per cent to China’s economic growth in the first three quarters of the year, investment around 15.6 per cent and exports around 19.5 per cent, said NBS spokesman Fu Linghui.
“The overall national economy maintained the recovery momentum in the first three quarters … however, we must note that the current uncertainties in the international environment are mounting, and the domestic economic recovery is still unstable and uneven,” Fu said.
However, analysts still expect growth to easily surpass that target, growing by more than 8 per cent this year despite the current pressures.
Retail sales, a key measurement of consumer spending in the world’s most populous nation, grew by 4.4 per cent in September, up from the 2.5 per cent increase in August, and above the projection for a 3.5 per cent rise estimated in the Bloomberg survey.
Fixed-asset investment – a gauge of expenditures on items including infrastructure, property, machinery and equipment – grew by 7.3 per cent in the January-September period compared with a year earlier. For the January-August period, fixed-asset investment had been up 8.9 per cent.
The surveyed jobless rate, an imperfect measurement of unemployment in China that does not include figures for the tens of millions of the nation’s migrant workers, stood at 4.9 per cent in September from 5.1 per cent in August.
“Yet, the unemployment rate declined, which is puzzling. This suggests the government may not feel the urgency to launch stimulus and boost growth. The [People’s Bank of China] press conference last week also sent signals indicating that monetary policy stance will not change significantly. Without a meaningful policy change, growth in the fourth quarter will likely slow further.”
China has set a target of creating 11 million new urban jobs and a surveyed urban unemployment rate of 5.5 per cent for this year.
According to figures released Monday, China created 10.45 million new urban jobs in the first nine months of the year, achieving 95 per cent of the annual target.
“The Covid-19 recurrence, supply-chain disruptions and power strains have weighed on economic activity in the third quarter of 2021. Recent tightening policies in the property market and the power crunch have cast a shadow over industrial activities,” said Yue Su, principal economist at The Economist Intelligence Unit.
“These pressures seemed to have eased, compared with September, but the impact of these developments on China‘s broader economy should not be underestimated and will be a major downside risk in the fourth quarter. The slowdown in the property sector will affect the activities of firms in areas such as construction contracting, building materials and home furnishing. Energy-intensive industries will face a rise in costs as well.”