China records weakest growth in over a year as property woes drag on

BEIJING: China recorded its slowest growth in a year and a half on Friday (Oct 18), as authorities come under pressure to follow up a recent round of stimulus measures with new measures aimed at reviving the world’s second-largest economy.

Since last month, authorities have unveiled a series of measures aimed at reviving sluggish consumption and resolving a protracted and debilitating debt crisis in the country’s colossal real estate sector.

After a meteoric market rally fueled by hopes of a long-awaited “bazooka stimulus”, optimism waned as authorities refrained from providing a precise figure for the bailout or detailing the promises.

On Friday, the National Bureau of Statistics (NBS) in Beijing said the economy grew 4.6% year-on-year in the third quarter, up from 4.7% in the previous three months and the slowest since at the beginning of 2023, when China came out of its strict control. zero Covid policy.

The BES recognized a “complex and severe external environment… as well as new domestic economic development challenges.”

Still, figures showing a better-than-expected rise in retail sales in September – an indicator of consumer activity – provided a ray of light after a run of below-average figures on a range of indicators including l inflation, investment and trade.

And before the data was released, state media said the country’s major banks had cut interest rates on yuan deposits for the second time this year, as part of a move to boost ready.

Beijing said it was “fully confident” of achieving its annual growth target, but economists say more direct fiscal stimulus is needed to revive activity and restore business confidence.

In recent weeks, authorities have unveiled a series of measures aimed at injecting liquidity into the economy, including a series of rate cuts and an easing of restrictions on home buying.

China’s central bank launched one such measure on Friday: a swap mechanism for funds and insurers with an “initial quota of applications exceeding 200 billion yuan ($28.1 billion)”, state media reported. ‘State.

The mechanism implemented by the People’s Bank of China (PBoC) will provide greater liquidity to capital markets, which policymakers hope will support the economy as a whole.

And in a possible sign of more relief to come, PBoC chief Pan Gongsheng said on Friday that authorities were considering a further reduction in the amount commercial lenders must hold in reserve before the end of the year.