Published: Sun, October 21, 2018
Money | By Armando Alvarado

China Q3 GDP growth slows more than expected

China Q3 GDP growth slows more than expected

Manufacturing growth further slowed to 6% from 6.6% in the second quarter, the weakest level since the set of the data was first available last March.

That's its weakest quarterly growth since the depths of the global financial crisis in early 2009 and below economists' expectations of 6.6%.

Stock-market turbulence and a sharper-than-expected economic slowdown are ratcheting up pressure on China's leaders, just as Donald Trump does the same.

In the first three quarters of the year, GDP growth stood at 6.7 per cent, ensuring Beijing will achieve growth target of "around 6.5 per cent" for this year.

Liu trumpeted a raft of new policies meant to boost the stock market and reaffirmed the importance of China's private sector, which has suffered from a push to strengthen state-owned enterprises.

China Securities Regulatory Commission Chairman Liu Shiyu said in a separate statement that the commission has maintained a baseline of financial market reform, opening up innovation as it seeks to stabilize and boost market confidence.

Beijing and Washington have slapped tit-for-tat tariffs on each other's goods in recent months, sparked by U.S. president Donald Trump's demands for sweeping changes to China's intellectual property, industrial subsidy and trade policies.

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Latest figures showed the economy in China grew less than anticipated, with a 6.5 per cent increase year-on-year in the third quarter.

"Chinese policymakers are faced with a tough proposition: Keep pumping liquidity into the system for limited dividend and growing long-term imbalances or accept much slower growth and refocus on deleveraging", said Sue Trinh, head of Asia strategy at RBC.

While a years-long de-risking campaign has driven up borrowing costs and weighed on activity, authorities are now trying to mitigate the broader economic impact of higher USA trade tariffs.

The ChiNext Index, China's NASDAQ-style board of growth enterprises, lost 2.18 percent to close at 1,205.03 points.

The country's central bank chief weighed in on Friday, saying the People's Bank of China (PBOC) is studying targeted measures to allay the financing difficulties of private companies and will push forward plans to support such firms' bonds financing. The statistics bureau now publishes growth rates for the technology and commercial-services sectors, highlighting the contributions of the new economy that policy makers are doing more to encourage and support.

China's stock market has tumbled at the fastest pace worldwide this year as trade tensions, weakening economic growth and a wave of forced selling rattled investors. Auto sales, for instance, fell for a third straight month in September, putting the country on track for its first yearly decline in passenger-vehicle sales in almost three decades. Investment in factories and other fixed assets rose 5.4 percent in the first three quarters, down 0.6 percent from the first half.

The US also wants Beijing to rein in high-technology industrial subsidies, open its markets to more foreign competition and take steps to cut a $375 billion (£283 billion) US goods trade surplus.

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