China Economic Slowdown: GDP grew by 4.6% in Q3, below the 5% target.
China’s economic slowdown is deepening, with GDP growing by only 4.6% in the third quarter of 2024. This marks the weakest expansion since early 2023 and falls below the government’s 5% target. The slowdown is compounded by a worsening property crisis, which remains a significant drag on growth.
The National Bureau of Statistics reports that the world’s second-largest economy continues to face structural challenges, with key areas like consumer spending and business confidence remaining weak. Despite stimulus efforts, China’s economic slowdown persists as the country grapples with a shrinking property market and declining home prices.
Economists, such as Eswar Prasad, the former head of the International Monetary Fund’s China division, warn that China’s growth target is now at serious risk. Prasad told the BBC, “It will take a substantial boost in the fourth quarter to meet the target.” However, Moody’s Analytics’ economist, Harry Murphy Cruise, is more optimistic, believing recent stimulus efforts could still propel China toward its goal.
Property Market Crisis Drags Down Growth
The most significant factor contributing to China’s economic slowdown is the property crisis. Home prices in China have dropped at the fastest pace in almost a decade, stalling new investments. According to ING’s chief economist for greater China, Lynn Song, “Housing instability will continue to weigh on growth until prices stabilize and inventories decline.”
In response, China’s central bank, the People’s Bank of China (PBOC), has introduced measures to boost lending, cut interest rates, and support the stock market. These steps aim to combat the economic slowdown by encouraging more borrowing and spending, particularly in the housing sector.
Future Outlook for China’s Economy
Looking ahead, China’s economic slowdown poses risks not just for the country but for the global economy as well. As Beijing continues to push stimulus efforts, experts remain divided on whether the country can still meet its 5% annual growth target.
For a deeper dive into China’s economic situation, see the full report on BBC News.
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