Sputtering growth, soaring debt and an escalating trade war with the United States are increasingly weighing on China’s economy.
China’s government on Friday reported that the economy grew by 6.5 percent over the three months that ended in September compared with a year ago. While fast by global standards, the pace is China’s slowest since early 2009, during the depths of the global financial crisis.
China has reported growth figures over the past two years that painted a picture of an economy that is gamely chugging along, despite the country’s lingering problems and widespread doubts over the reliability of official numbers. A different narrative is emerging this year, one of a slowing economy that is forcing Beijing to make some difficult choices.
Chinese shoppers have said they are spending less and downgrading their purchases, like staying home instead of going out, or drinking beer instead of cocktails. Business confidence is ebbing. Investment in splashy infrastructure projects has dropped sharply.
China’s stock market is firmly in the red — it has fallen by more than one-quarter since a peak in January — making it one of the world’s worst performing. Companies are complaining that they cannot get money from lenders, and a handful are defaulting on their loans. The currency has weakened and is hovering near a 10-year low against the American dollar.
All of this is before factoring in China’s intensifying trade war with the United States. Friday’s report is the first since the two countries began to impose tit-for-tat tariffs starting in early July.
So far it has only marginally dented China’s $12 trillion economy. In recent weeks, Chinese officials have pointed to figures that show overall trade remains robust despite the conflict.
On Friday, Chinese officials introduced an unusual public effort to reassure businesses and investors that China was on the right track. They blamed the lower-than-expected economic figures on global factors but said the government would take steps to keep growth on course.
“We have no reason not to be confident in the bright prospects for China’s economic development,” Liu He, China’s economic czar, told the official Xinhua news agency.
For more read the full of article at The Nytimes
