China’s economy grew in the third quarter at its slowest pace since the start of 2023, and while consumption and industrial output beat forecasts last month, a falling property sector remains a major challenge for Beijing as it seeks to revive growth, Chinese media reported.
Authorities have sharply stepped up policy stimulus since late September, but markets are waiting for more details on the size of the package and a clearer roadmap to get the economy back on solid long-term footing.
Official data showed the world’s second-largest economy grew 4.6 per cent in the July-September quarter, slightly above the 4.5 per cent forecast in a Reuters poll but below the 4.7 per cent pace in the second quarter.
Stimulus package annonced but takes time
The stimulus package announced in late September will take time and patience to stimulate growth over the next few quarters.
Officials speaking at a news conference after the data were released on Friday expressed confidence the economy could meet the government’s full-year growth target of around 5 per cent, backed by further policy support and another reduction in the amount banks must hold in reserve. Sheng Laiyun, deputy head of China’s statistics bureau, told reporters:
“Based on our comprehensive assessment, the economy in the fourth quarter is expected to continue the trend of stabilisation and recovery seen in September. We are fully confident of achieving the full-year target.”
Policymakers might have calmed down a bit with the projected industrial production and retail sales data for September, but the property sector continued to show declines and expect additional support measures.
The recently announced stimulus measures may mitigate downside risks to growth next year, but are unlikely to reverse the structural decline.
A Reuters poll showed China’s economy is likely to grow 4.8 per cent in 2024, missing Beijing’s target, and growth could slow further to 4.5 per cent in 2025.
