China’s economy grows at slowest pace in over six years
China’s economy grew 6.9 per cent in the third quarter, marking the poorest rate of growth since the global financial crisis.
The figures released on Monday have fuelled speculation that the government may take further measures to boost the country’s slowing economy. It was the first time the nation’s GDP growth has fallen below 7 per cent since the first quarter of 2009.
Watch: China 3rd quarter growth beats expectations, but still the poorest in over six years
The figures were slightly higher than the 6.8-per cent growth rate analysts had predicted, sending the Shanghai Composite share index up 0.5 per cent before the lunchtime break, but weak industrial output and investment figures also appear to cloud the economic outlook.
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National Bureau of Statistics data showed industrial output fell short of expectations by rising 5.7 per cent last month, lower than a rise of 6.1 per cent in August.
Fixed-asset investment, a key driver for the economy, rose 10.3 per cent in the first three quarters of the year. That’s the slowest pace of gains since 2000.
“Data on investment and industrial output are bad. The real economy is facing further deteriorating conditions,” said Liu Dongliang, an economist at China Merchants Bank. “The previous stimulus measures haven’t showed or been reflected.”
Retail sales showed more encouraging signs, rising by 10.9 per cent last month, a mild improvement on a 10.8 per cent again in August, but economists are worried it is not enough to boost the overall economy
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“A deep winter [in the economy] will continue, but the poor data increases the likelihood of more intensified measures to shore up the economy,” said Liu.
He expects cuts in interest rates and bank deposit reserve ratios to come earlier than many economist and analysts anticipate.
