China’s economy grew at its slowest pace this year during the third quarter as energy shortages and a debt-laden property sector weighed on the country’s pandemic recovery.
China’s gross domestic product (GDP) grew by 4.9 percent in July to September from last year, according to data released by the National Bureau of Statistics, missing economists’ expectations of more than 5 percent growth.
“The domestic economic recovery is still unstable and uneven,” National Bureau of Statistics spokesperson Fu Linghui said at a briefing in Beijing on Oct. 18.
The third quarter figure fell from the second quarter year-on-year growth of 7.9 percent and reflected slowdowns in manufacturing and consumer spending.
Shortages in coal have triggered a power crisis in China, with authorities resorting to power rationing that have severely affected the country’s major manufacturing plants and sent some factories out of business.
Beijing also faces a crisis in its property sector — China’s second largest real estate company Evergrande is nearly defaulting on its liabilities worth over $300 billion and has spurred fears over credit risks spilling over the entire Chinese economy.
“The slowdown in the property sector will affect the activities of firms in areas such as construction contracting, building materials and home furnishing,” said Yue Su, principal economist at The Economist Intelligence Unit, adding that the debt crisis weighed on by high power costs will significantly dampen China’s prospects for the fourth quarter.
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