China’s economy slowed to its lowest growth in six years, official figures showed, as President Xi Jinping arrived for a four-day state visit to Britain.
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China’s economy increased by 6.9 percent in the third quarter of this year compared to the same period in 2014, the National Bureau of Statistics revealed on Monday.
Although it was slightly better than economists expected, the 6.9% growth rate was the slowest since the 6.2% recorded in the first quarter of 2009, during the global recession. The communist government has cut interest rates five times since last November in an effort to shore up growth. E-commerce spending also leapt ahead, rising 36% in the third quarter over a year earlier.
“Consumption continued to function as the key cushion, preventing a sharper overall slowdown”, said Louis Kuijs, head of Asia economics at Oxford Economics Ltd.in Hong Kong.
A stronger services sector and robust consumption are helping offset weakness in manufacturing and exports.
The dollar tumbled to seven-week lows last Thursday amid speculation the USA central bank will not raise rates until sometime next year, with weak economic reports on retail sales and manufacturing activity feeding that view. Chinese leaders have been trying to reassure global markets that Beijing is able to manage the world’s second-largest economy after the shock devaluation in the yuan and summer stock market crash sparked fears of an economic hard landing.
Third-quarter GDP rose by 1.8% on a quarter-over-quarter basis.
Industrial production growth of 5.7% was below market expectations while growth to fixed asset investment – spending on factories and machines which makes up the backbone of the Chinese economy – also slowed in the year to date.
China’s economic growth slowed to a 6.9 percent annual rate between August and September, which is the slowest expansion since 2009.
The shift in growth drives from the industrial sector to the services sector has been widely publicized as a policy objective of the Chinese authorities, and these recent figures will thus likely be viewed as a positive development in that regard. China accounted for 13.3% of global GDP past year, from less than 5% a decade earlier, according to World Bank data. The latest numbers suggest that Beijing will hit its target for 2015.
The GDP growth target has already been lowered recently.
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He added: ‘While the official GDP figures continue to overstate the actual pace of growth in China by a significant margin, underlying conditions are subdued but stable’.
