China on Friday posted its slowest growth in a year and a half as Beijing struggles to stabilize consumer spending and the economy. Problems in the fixed assets sector.
Officials have unveiled a series of measures in recent weeks to revive the world's second-largest economy, aiming to meet its official 5% annual growth target.
But confidence in the long-awaited “bazooka stimulus” that emerged after a surging stock market has weakened as officials refrained from giving specific figures or detailing promises.
On Friday, the National Bureau of Statistics (NBS) in Beijing said the economy expanded 4.6% annually in the third quarter, up from 4.7% in the previous three months and the slowest since early 2023. China was emerging from severe pandemic-era lockdowns. However, this figure was slightly better than the 4.5% expected by analysts surveyed by AFP.
China's economic growth is also being hampered by sluggish domestic spending, and consumer caution threatens to plunge the country into deflation.
September's consumer price index – a key measure of inflation – missed expectations, pointing to continued weak demand.
In recent weeks, authorities have unveiled several measures to slow the economy.
“We are waiting for more clarity on fiscal stimulus,” said Shiwei Zhang, chief economist at Pinpoint Asset Management. “As the outcome of the US election is a factor influencing Beijing's political thinking, we will have to wait until November to find out the details.”
Before the figures were known, China's major banks cut interest rates on yuan deposits for the second time this year.
Beijing says it has “full confidence” in meeting its annual growth target, but economists say more direct fiscal stimulus is needed to revive activity and restore business confidence. Investors are clamoring for more details on how Beijing will shift its economy toward a consumption-driven model.
A bigger headache is the chronic crisis in the real estate sector, which has long been a key driver of growth but is now mired in debt.
On Thursday, officials said they would increase lending for unfinished housing projects to more than $500 billion. Officials also promised to facilitate the reconstruction of one million homes, aimed at boosting activity in the real estate sector.
But like last week's much-discussed briefings, Thursday's news conference lacked big financial promises. A promoters gauge tracked by Bloomberg fell as much as 8.3% on the day, while iron ore and steel futures also weakened.
“However, let's be honest: China's asset mess is not something that can be fixed with a few words and half-hearted actions,” Stephen Innes, managing partner at SPI Asset Management, said in a note.
Agence France-Presse contributed to this report.
