قالب وردپرس درنا توس
Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ China's economic growth is slowing down with increasing challenges

China's economic growth is slowing down with increasing challenges



SHANGHAI – China's economic slowdown worsened between July and September, according to figures released Friday, as the trade war with the United States and a host of other problems leave Beijing struggling to achieve its goals.

Figures show that China continues to grow at its slowest pace in the nearly three decades of modern record keeping. Although China is still growing faster than any other major economy, data from Friday suggests that the pace may be at the lowest end of Beijing's official target, which may add worries to wider prospects for global growth .

China's efforts to curb its addiction to lending and deepen the impact of the trade war are serious difficulties for the economy. Other problems are exacerbated as the country's huge car sector shrinks as the real estate sector shrinks and its pigs die in a huge swine fever epidemic.

China's economic output grew 6% in the third quarter compared with a year earlier, according to official statistics, the lowest end of Beijing's year-round target of 6% to 6.5%. In the first three quarters of the year, its output grew by 6.2 percent compared to a year ago.

China's growth was set to slow down from the tumultuous pace of years past. Its economy is now twice as large as it was a decade ago. Its workforce is shrinking and the country is already full of roads, rails and factories, limiting potential new investment.

The question is whether there are sharp downturns towards slower growth.

"What politicians want is to make the process as long and gradual as possible," said Larry Hu, head of China Economics at Macquarie Group, a large Australian financial services company. "The biggest challenge is finding new engines of growth in consumption and technology as old ones like property and globalization are fading."

Mao Shengyong, a spokesman for the National Bureau of Statistics, told a Beijing news briefing that the economy it is not developing as badly in the face of global difficulties as slowing international trade. "The national economy as a whole is stable, the economic structure is constantly being optimized, and people's livelihoods and well-being are constantly improving," he said.

Despite soothing words, China is struggling with a number of economic problems. Trade is just one of them.

But nowadays, households in China just don't buy cars the way they used to.

Retail car sales fell 6.6 percent in September from a year earlier, a sharp decline for an industry once used to double-digit annual growth in percentages.

The decline in car sales began in the summer of 2018 and has become severe since the winter. The expected improvement did not happen this summer.

Cui Dongshu, Secretary General of the Chinese Passenger Car Association, said that September was at least not as bad as in recent months. "Sales are recovering, but very slowly, due to low consumption," he said. "The purchasing power of families is still not enough."

Chinese carmakers planned to export many cars to the United States this winter. But Mr Trump's tariffs made it much harder and prompted one carmaker, Guangzhou Auto, to suspend its plans to enter the US market indefinitely.

The weakness of the property market also suppressed growth and harmed consumer sentiment. One decade of rising house prices has given many in China, where the percentage of home ownership is high, the feeling that they are becoming prosperous enough to scatter for other purchases. But prices are in most cases stabilizing and even falling in some smaller cities, and many families are struggling with large mortgage payments.

The biggest challenge for China may be the slower investment, which weakened further in September. Although state-owned enterprises continue to pour money into new projects, foreign investment has collapsed, especially in September; some companies are diversifying away from China.

"We have seen significant distribution from multinational companies in this part of the world over the last 18 months," says Mark Webster, a partner at BDA Partners, a Shanghai-based investment bank specializing in Asia.

The trade war is only part of the problem. Multinationals have been complaining about much tougher regulatory action in China, especially antitrust cases. They also face high overcapacity in many industrial sectors, forcing companies to cut prices many times in order to stay in business and erode profit margins.

The volume of mergers and acquisitions by foreign companies investing in China plunged 89 percent in the first half of this year from the same period last year, to just $ 6.3 billion, Mr. Webster said.

Ailin Tang contributed to the study.


Source link