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China’s economy grew by 4.6 per cent year on year in the third quarter, according to official data released on Friday. This growth rate is slower than the previous three months, highlighting a slowdown in growth as Beijing increases efforts to stimulate the economy.
The 4.6 per cent growth is below the government’s target of 5 per cent for the full year and lower than the 4.7 per cent recorded in the second quarter, mainly due to weak consumer spending and a decline in the property market affecting household sentiment.
This slower growth indicates the need for additional economic support from Beijing, which recently announced its largest monetary stimulus since the start of the pandemic, along with promises of significant fiscal spending.
While China’s markets initially responded positively to the news of the monetary stimulus, investors have become more cautious as they await further details on the fiscal measures. Both the CSI 300 index of Shanghai- and Shenzhen-listed stocks and Hong Kong’s Hang Seng benchmark have declined in October, despite being up for the year so far.
Efforts by various government agencies, such as the economic planner, finance ministry, and housing ministry, to boost confidence have not met investor expectations. The Hang Seng Mainland Properties index dropped by 6.7 per cent on Thursday after the housing ministry’s measures to support the real estate sector failed to impress the markets.
Although the exact amount of additional fiscal spending has not been specified yet, analysts believe that it may be announced during an upcoming meeting of the National People’s Congress, China’s legislative body.
This story is still developing