China’s Economic Growth Slows to a 30-Year Low

China’s Economic Growth Slows to a 30-Year Low

access_time2019-10-22 08:00:23


China released a raft of economic data Friday morning, but the headline figure was 6%. That’s the rate of GDP growth in the third quarter as compared to the same period last year, and it’s lower than the 6.1% growth analysts polled by Reuters had anticipated. In fact, it’s China’s lowest quarterly economic growth since records began 27 years ago in 1992.

However, the data wasn’t all bad, a result that Beijing touted in its announcement of the numbers. According to the National Bureau of Statistics, China’s industrial output rose 5.8% in September, up from a 17-year low in August, and retail sales jumped 7.8% year-on-year last month, too.

“The national economy is generally stable, the economic structure is continuously optimized, and people’s livelihood and welfare are continuously improved,” Mao Shengyong, the spokesperson for China’s National Bureau of Statistics said during a news briefing, adding that the economy is still facing “downturn pressure.”

Domestic factors were the biggest drag on China’s economy in the third quarter. Investment is slowing, while the pickup in infrastructure spending is plateauing; credit growth has failed to respond to monetary easing and consumer inflation has surged—pork prices, in particular, soared 47% in August as China struggles to contain a devastating outbreak of African Swine Fever.

There’s also the fact that China’s GDP—which averaged 10% annual growth for much of the 40 years since the country opened up to foreign markets—was destined to run out of steam. In fact, if the headline “China’s slowest growth in 30-years” sounds familiar, it’s because China’s Q2 GDP growth of 6.2% was then also the slowest since 1992, signifying a definite downward trend.

Depending upon how you measure it—by purchasing power parity or in U.S. dollar terms—China’s $14 trillion economy is either the largest or second largest in the world. The country’s GDP accounts for a close to a third of global growth. So naturally, a slowdown in China has repercussions for world economies.

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