China, the second largest economy of the world reported a slowdown in its growth for the three months ended September with a growth rate of 6.5 per cent compared to the same period a year ago.
This rate of growth is the slowest for the economy since the early 2009 when it was also hit by the global financial crisis, despite the growth rate being better than most other major economies in the world.
The Chinese government pointed out the slowdowns in investment and retail sales to be behind the slack in growth. Economists fear that the growth rate could further slow down after the impact of the trade war and tariffs sets in.
The Chinese economy has been negatively impacted by a slowing growth in some of its key industries, a rising debt situation and the escalating trade war with the United States.
Over the last two years, the growth rate reported by the country had indicated that the economy was gamely chugging along despite some of the teething problems in its economy and doubts about the reliability of the numbers put forward by the government. This year however, there is a different narrative that is emerging which paints a picture of a slowing economy which had forced China to take make some tough decisions.
The retail spending by Chinese consumers has come down as well as scaled down. For example, Chinese consumers now say that they are staying back at home instead of going out and are choosing to drink beer instead of cocktails. There is also erosion of business confidence and a sharp drop in investments in infrastructure projects.
The stock markets in the economy are also not doing well and have lost about a quarter since the peak values in January this year. In fact many now see the Chinese financial market to be the worst performing in the world. There is a growing shortage of debt for companies from lenders and there are some incidents of defaulting as well. The currency – the yuan, has weakened against the US dollar and is at historic lows in the last 10 years.
But these problems are aside of the possible impacts of the trade war with the US and the latest government figures of the country are the first to be reported since the start of a full blown trade war with the US and the imposition of import tariffs by both the countries on goods worth billions of dollars of each other since early July.
In an unusual manner, the Chinese authorities attempted to assure businesses and investors about the health of the Chinese economy while pointing out global factors that were responsible for the poor show in the most recent quarter. The government assured hat it is taking measures that would keep its growth on course.
“We have no reason not to be confident in the bright prospects for China’s economic development,” Liu He, China’s economic czar, told the official Xinhua news agency.
(Source:www.nytimes.com)
This rate of growth is the slowest for the economy since the early 2009 when it was also hit by the global financial crisis, despite the growth rate being better than most other major economies in the world.
The Chinese government pointed out the slowdowns in investment and retail sales to be behind the slack in growth. Economists fear that the growth rate could further slow down after the impact of the trade war and tariffs sets in.
The Chinese economy has been negatively impacted by a slowing growth in some of its key industries, a rising debt situation and the escalating trade war with the United States.
Over the last two years, the growth rate reported by the country had indicated that the economy was gamely chugging along despite some of the teething problems in its economy and doubts about the reliability of the numbers put forward by the government. This year however, there is a different narrative that is emerging which paints a picture of a slowing economy which had forced China to take make some tough decisions.
The retail spending by Chinese consumers has come down as well as scaled down. For example, Chinese consumers now say that they are staying back at home instead of going out and are choosing to drink beer instead of cocktails. There is also erosion of business confidence and a sharp drop in investments in infrastructure projects.
The stock markets in the economy are also not doing well and have lost about a quarter since the peak values in January this year. In fact many now see the Chinese financial market to be the worst performing in the world. There is a growing shortage of debt for companies from lenders and there are some incidents of defaulting as well. The currency – the yuan, has weakened against the US dollar and is at historic lows in the last 10 years.
But these problems are aside of the possible impacts of the trade war with the US and the latest government figures of the country are the first to be reported since the start of a full blown trade war with the US and the imposition of import tariffs by both the countries on goods worth billions of dollars of each other since early July.
In an unusual manner, the Chinese authorities attempted to assure businesses and investors about the health of the Chinese economy while pointing out global factors that were responsible for the poor show in the most recent quarter. The government assured hat it is taking measures that would keep its growth on course.
“We have no reason not to be confident in the bright prospects for China’s economic development,” Liu He, China’s economic czar, told the official Xinhua news agency.
(Source:www.nytimes.com)
