According to data from the National Statistics Office (ONE), the Chinese GDP for the period of July to September grew 4.8% year-on-year, down from 5.2% in the previous quarterdue to the turbulence that affect the international trade already a persistent drop in domestic consumption.
The figure coincides with an AFP forecast based on a survey of analysts and also represents the slowest growth since the same quarter last year, when GDP grew 4.6%.
The data was released on the same day that the Communist Party (CP) Central Committee began defining China’s long-term political goals and shortly before planned negotiations between senior Chinese and American officials this month, which could culminate in a meeting between President Donald Trump and Chinese leader Xi Jinping.
Trump threatened earlier this month to impose 100% tariffs on Chinese goods starting Nov. 1, in response to the sweeping export controls Beijing imposed on the strategic rare earths sector.
As trade pressure increases, experts say China must move toward an economic model in which domestic consumption plays a larger role, rather than relying primarily on infrastructure investment and exports.
Investment in fixed assets in the first three quarters experienced a slight decrease of 0.5% year-on-year, according to the ONE, largely due to a sharp contraction in real estate investment.
That decline is “unusual and alarming,” Zhiwei Zhang of Pinpoint Asset Management said in a note.
Zhang noted that recent stimulus measures “should help mitigate downward pressure on investment” in the fourth quarter.
“However, the risk to GDP growth in the fourth quarter is likely to remain to the downside,” he added.
Fall in consumption
Domestic spending has been lagging in recent years, without having fully recovered from the Covid-19 pandemic.
In another sign of weakness, the ONE said retail sales growth slowed to 3% year-on-year in September, in line with estimates in a Bloomberg survey, but below August and the lowest rate since November.
