The recent decline in China’s quarterly GDP growth is alarming global markets
“In the first quarter, growth was at 6.4 percent, followed by 6.2 percent in the second quarter, and 6.0 percent in the third quarter,” as stated by National Statistics Bureau spokesperson Mao Shengyong.
Chinese economic expansion has been a significant driver of global economic activity for many years. However, with the current trade tensions and global economic slowdown, China’s economy seems to be losing steam. The world was closely watching China’s third-quarter growth rate of 6%, marking the lowest recorded growth since statistics began in 1992.
There are various reasons behind this slowdown in growth. Data indicates that both imports and exports in China are declining, mainly due to the intensifying trade dispute between the United States and China. Although tariffs are set to increase later this year, there is optimism for a potential agreement before that escalation. Ongoing trade discussions are expected to set the stage for a potential deal in November. Failure to reach an agreement could further escalate the trade conflict.
China is facing the need for economic stimulus at this juncture. Analysts point out that China’s options for boosting the economy are limited, given the country’s significant debt representing over 300% of its GDP, according to the Institute of International Finance. In light of this grim economic outlook, market reactions have been swift. Chinese stocks experienced their worst performance this month, with Shanghai’s main index falling by 1.3% at the recent close.
