BEIJING: China’s economy expanded at its slowest pace since early 2023 in the third quarter, growing 4.6 per cent year-on-year, slightly above expectations but trailing the previous quarter’s 4.7 per cent.
The ongoing property sector slump continues to weigh on the economy, despite stronger-than-forecast retail sales and factory output in September. This underlines the significant challenges facing Beijing as it attempts to stabilize growth.
The government has introduced a stimulus package since late September, but the market is seeking more clarity on its scale and a longer-term economic plan.
Despite weak domestic demand and slowing exports, Chinese officials remain confident of meeting their 2024 growth target of around 5 per cent. They have hinted at further policy measures, such as reducing banks’ reserve requirements, to support the economy in the final quarter.
Less optimistic
Analysts, however, are less optimistic. While September’s industrial output and retail sales data were better than expected, the structural weaknesses in China’s property and household sectors remain unaddressed.
Economists at Oxford Economics caution that while stimulus measures may ease downside risks, they are unlikely to reverse China’s broader structural downturn.
A Reuters poll predicts China’s growth will hit 4.8 per cent in 2024, falling short of Beijing’s target, with the slowdown expected to continue into 2025 at a projected rate of 4.5 per cent. This underscores the need for more targeted and comprehensive economic policies to sustain long-term growth.
As China navigates these challenges, global markets will be watching for further policy interventions to address both the immediate downturn and long-term economic stability.
