Wednesday, 20 February, 2019

Chinese economy grows at slowest pace since 2009

Chinese economy grows at slowest pace since 2009 Chinese economy grows at slowest pace since 2009
Nellie Chapman | 21 October, 2018, 10:31

Earlier in the day, the securities regulator, central bank and banking and insurance regulator all pledged steps to bolster market sentiment as China reported its weakest pace of economic growth since the global financial crisis for the third quarter.

'The gross domestic output (GDP) of China was ¥65.1 billion in the first three quarters of 2018, a year-on-year increase of 6.7 percent at comparable prices, ' according to a report by the National Bureau of Statistics of China on Friday.

"China-US trade frictions have affected the market, but frankly speaking, the psychological impact is greater than the actual impact and China and the US are now in contact", said Liu He, China's top economic policy maker in a Friday interview with official news agency Xinhua meant to reassure markets.

The International Monetary Fund forecast earlier this month that China's economy will grow 6.2 percent this year, down 0.2 percentage point from its estimate in July.

The economy has expanded in a reasonable range and maintained a trend of overall stability and steady progress, China's statistical authority said, while acknowledging that the country faces more external challenges and rising downward pressure.

The Chinese economy has lost momentum this year following government efforts to try to rein in high levels of debt.

Infrastructure investment rose 3.3 per cent year-on-year for Jan-Sept, slower than 4.2 per cent growth in the first eight months of the year. "GDP growth is likely to slow to 6.0-6.2 percent next year", said Nie Wen, an analyst at Hwabao Trust Shanghai.

Washington has raised tariffs on $250 billion of Chinese goods and Trump says he might extend penalties to nearly all imports from China.

The GDP reading was the weakest year-on-year quarterly growth since the first quarter of 2009 at the height of the global financial crisis.

Those problems have prompted officials to step up stimulus and pledge further support, but the impact of those measures has yet to kick in and more may be needed.

Even with that, the Shanghai index is still down close to 10 percent this month and almost 25 percent since late January as foreign investors and domestic institutions dumped shares amid concerns about rising U.S. Treasury yields and a trade war with the United States.

Washington has so far slapped $250bllion (£190.4billion) of tariffs on Chinese products.

China's economy grew at its slowest pace for nine years in the third quarter, as a campaign to tackle mounting debt, and trade frictions with the U.S. take their toll.

As the disappointing growth numbers came out Friday, top Chinese economic and financial officials made a rare, coordinated attempt to ease investors' concerns.

He added that the government would take more measures to support the economy.

"The Sino-US economic and trade frictions have also impacted the stock market, but frankly speaking, the psychological effect is bigger than the actual impact", said Liu.

Looking ahead, the vice premier said focus should be put on enhancing the vitality, resilience and creativity of micro entities to push forward economic transformation and upgrading, and to facilitate a virtuous economic cycle.