China’s economy slows to 4.6% growth in third quarter

China’s economy expanded at the slowest pace since early 2023 in the third quarter, as the government battled to stimulate growth.
The world’s second-largest economy grew 4.6 per cent between July and September, official data showed, slightly above forecasts but below the 4.7 per cent rate in the second quarter.
The authorities have been increasing policy stimulus since late September but markets seem to want more details about the size of the support and how the government plans to put the economy back on a stronger footing.
Bruce Pang, chief economist for greater China at Jones Lang LaSalle, said the data was “not a turn-up for the books”. “The performance aligns with market expectations, given the weak domestic demand, a still-struggling housing market and slowing export growth,” he said.
Officials expressed confidence that the economy can achieve the government’s full-year growth target of about 5 per cent.
Sheng Laiyun, deputy head of China’s statistics bureau, said: “Based on our comprehensive assessment, the economy in the fourth quarter is expected to continue the stabilisation and recovery trend that occurred in September. We are fully confident in achieving the full-year target.”
The People’s Bank of China announced the country’s biggest stimulus package since the pandemic at the end of September, including large cuts to interest and mortgage rates and plans to bolster a flagging stock market. Laiyun said the stimulus package would take time and patience to boost growth over the next several quarters.
Although consumption and factory output figures beat forecasts in September, the ailing property sector remains a challenge for Beijing and confidence among investors remains weak.
Shane Oliver, Chief Economist at AMP, said: “I doubt that these numbers are affected by stimulus announced in September. It doesn’t really change the story much on China. It’s continuing to grow, but at a pretty subdued pace by historical standards.”
The International Monetary Fund has forecast that China’s economy will grow by 5 per cent in 2024 and 4.5 per cent in 2025. Goldman Sachs has lowered its forecast for China’s growth this year to 4.9 per cent from 5 per cent.
Chinese shares rose on Friday to end the week higher after the central bank began funding schemes and urged the swift adoption of policies to support capital markets, while mixed economic data kept pressure on policymakers for more stimulus.
The People’s Bank of China (PBOC) launched two schemes to pump as much as 800 billion yuan ($112 billion) into the stock market through newly-created monetary policy tools, bolstering investor sentiment. The CSI300 Index ended 3.6 per cent higher, while the Shanghai Composite Index closed up 2.9 per cent. Both indexes have gained 1 per cent this week.
Shares in China are down by around 11 per cent from their October 8 peak after a volatile few weeks, as caution overtook euphoria following Beijing’s stimulus measures in September.