China posted its slowest growth in a year and a half on Friday, as Beijing struggles to steady an economy shaken by sluggish consumer spending and persistent property sector woes.
Officials have in recent weeks unveiled a string of measures to reignite the world’s number-two economy, with an eye to achieving its official annual growth target of 5%.
But after a blistering share market rally fuelled by hopes for a long-awaited “bazooka stimulus”, optimism has tapered as authorities refrained from providing a specific figure for the bailout or detailing any of the pledges.
On Friday, Beijing’s National Bureau of Statistics (NBS) said the economy expanded 4.6% year on year in the third quarter – down from 4.7% in the previous three months and the slowest since early 2023, when China was emerging from its strict pandemic-era lockdowns. Still, it was slightly better than the 4.5% predicted by analysts surveyed by AFP.
China’s economic growth is also being hindered by sluggish domestic spending, with consumer wariness threatening to plunge the country into deflation.
The September consumer price index – a key measure of inflation – missed expectations, speaking to continued lacklustre demand.
Recent weeks have seen authorities unveil a raft of measures to funnel cash into the economy including a string of rate cuts and loosened restrictions on home-buying.
“We are waiting for more clarity on the fiscal stimulus,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “We may have to wait till November to find out details, as the outcome of the US election is probably one factor that influences the policy thinking in Beijing.”
Ahead of the figures, state media said China’s top banks had cut interest rates on yuan deposits for the second time this year.
Beijing says it has “full confidence” in achieving its annual growth goal, but economists say more direct fiscal stimulus is needed to revive activity and restore business confidence. Investors are clamouring for more specifics on how Beijing will shift its economy towards a consumption-driven model that can sustain long-term growth.
A major headache has been a prolonged crisis in the property sector, which has long been a key driver of growth but is now mired in debt.
On Thursday, officials said they would boost credit available for unfinished housing projects to more than US$500bn. Authorities also promised to facilitate the renovation of a million homes, a move intended to boost activity in the property sector.
But as with a slew of much-touted briefings in the past week, Thursday’s news conference failed to impress with its lack of big-ticket financial pledges. A gauge of developers tracked by Bloomberg had fallen as much as 8.3% on the day, while iron ore and steel futures also weakened.
“Let’s be honest, though – China’s property mess isn’t something that can be patched up with a few speeches and half-baked measures,” Stephen Innes, managing partner at SPI Asset Management, said in a note.
Agence France-Presse contributed to this report