China’s economy grew by 4.6 percent in the third quarter

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Lerato Khumalo

According to National Bureau of Statistics (UIB) data, the Gross Domestic Product (GDP) in China reached 94.97 trillion yuan (13.34 trillion dollars) in the January-September 2024 period, while it decreased by 0.9 percent in the third quarter compared to the previous quarter. It increased by 4.6 percent compared to the same period of the year.

While growth in the first three quarters reached 4.8 percent annually, doubts grew about whether the government’s growth target of “around 5 percent” for this year could be achieved.

The Chinese economy recorded annual growth of 5.3 percent in the first quarter and 4.7 percent in the second quarter.

While September economic data pointed to a recovery in production and consumption compared to August, the negative impact of the ongoing decline in real estate investments on economic growth continued.

RECOVERY IN PRODUCTION AND CONSUMPTION

Industrial production, which calculates the production output of industrial enterprises with an annual turnover of over 20 million yuan (about 2.74 million dollars), increased by 5.4 percent on an annual basis in September, exceeding the 4.5 increase in August.

Retail sales, which are considered the measure of consumption, increased by 3.2 percent annually in September, outperforming the 2.1 percent increase in August.

Fixed capital investments, which include infrastructure, real estate, machinery and equipment expenditures, increased by 3.4 percent annually in 9 months and maintained the increase rate in 8 months.

THE DECLINE IN REAL ESTATE INVESTMENTS CONTINUES

The contraction in the real estate sector and housing market in China, which started with the Covid-19 epidemic, is one of the factors that has negatively affected economic growth in the country for the last 3 years.

Real estate investments continued their decline in the last two years, decreasing by 10.1 percent in the first 9 months.

It is observed that the government’s policies to encourage growth in the real estate sector and the private sector have not yet yielded results.

On the other hand, private sector investments, which are considered an indicator of investor confidence, decreased by 0.2 percent in the January-September 2024 period.

UNEMPLOYMENT

It was reported that the general unemployment rate in cities, which was 5.3 percent in August, decreased to 5.1 percent in September.

Details of the youth unemployment rate, which has reached record levels in the last three years, have not yet been announced.

The Chinese government had determined growth of “around 5 percent” for this year at the National People’s Congress held in March.

REVIVAL STEPS FROM ECONOMY MANAGEMENT

The government and institutions responsible for economic management have announced different policy steps in recent weeks to revive growth that has fallen behind the annual growth target.

The People’s Bank of China (PBoC), the National Development and Reform Commission (NDRC), the Ministry of Finance and, most recently, the Ministry of Housing and Urban-Rural Development are working to revive the declining real estate sector, solve local governments’ debt problems and financing problems, and increase consumer and investor confidence. He announced gradual policy steps.

While markets in China responded positively to some measures announced, it is observed that some measures did not meet the expectations of the markets.