China Q3 GDP Growth Slows to 4.6%

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Facts

  • According to new data from China's National Bureau of Statistics, released on Friday, the nation's annual gross domestic product (GDP) growth rate in the three months to September was 4.6%, the lowest since early last year.[1]
  • Though this rate missed the 5% threshold for the second quarter in a row, it beat market expectations of 4.5%.[1][2]
  • This comes as Beijing announced a series of measures in September, including slashing interest rates and dropping mortgage rates, which resulted in a record market surge.[3][4]
  • Meanwhile, official figures show that new house prices dropped at a faster rate in September than they have in nearly 10 years, indicating a downturn in the housing industry.[5]
  • The Ministry of Finance and other government organizations have announced new plans to boost economic growth, with the Chinese central bank convening on Friday to push banks and other financial institutions to expand lending in an effort to boost growth.[6]

Sources: [1]MSN, [2]CNBC, [3]The Business Times, [4]The Economic Times, [5]Reuters and [6]Business Insider.

Narratives

  • Anti-China narrative, as provided by Reuters. This latest data paints a significantly pessimistic outlook compared to a July survey, which predicted 5.0% growth in 2024. The assumption currently is that China will miss its aim, falling to 4.8% in 2024 and maybe cooling further by 2025. The government is under pressure to implement new stimulus programs, while consumers are hoping for deflationary actions.
  • Pro-China narrative, as provided by ING Think. Despite a slower third quarter, China's economy still beat estimates and is on track to meet its 5% growth target. Economic growth remains at 4.8% year-over-year, and Beijing has taken adequate measures to boost consumer confidence. China can afford to expand at a slightly slower pace in the third quarter while still meeting its full-year growth objective.

Predictions