Oct. 18 (UPI) — Economic growth in China slowed slightly in the second quarter pulled down by weak consumer sentiment and a struggling property, throwing the Chinese Communist Party’s target of expanding the economy by 5% in 2024 into further question, official figures published Friday show.
Annual GDP grew by 4.6% in the July to September period, down from 4.7% in the second quarter and 5.3% in January to March, the National Bureau of Statistics reported in a news release.
Growth of retail sales, industrial output, and fixed asset investment — plant, equipment and property — all slowed compared with the previous quarter on an annual basis and while unemployment posted a slight drop to 5.1%, it remained flat from the April to June period.
Retail sales expanded by 3.3%, down from 3.7%; industrial production came in at 5.8%, compared with 6% in the third quarter, while investment in growth in fixed assets reversed a slight uptick in the second quarter shedding 0.5% to record growth of 3.4%.
Fixed assets investment was strongly impacted by the ailing property sector with NBS noting that annual growth would have been 7.7% — led by manufacturing and infrastructure — if not for a sharp 10.1% slump in investment in real estate development for a second straight quarter.
However, some sectors showed shoots of recovery toward the end of the third quarter.
Shorter-term monthly annual figures saw a rebound with retail sales growth jumping 1.1% in September to 3.2% compared with August and a 0.9% September expansion in industrial output — manufacturing, mining and utilities — to 5.4%, up from 4.5% in August.
Unemployment also fell to 5.1% in September, down from 5.3% in August. That was in line with the third-quarter overall jobless numbers.
NBS deputy commissioner Sheng Laiyun told a briefing Friday it was a “stable performance” overall and while acknowledging the economy had yo-yoed over the course of the first three quarters of 2024 he said recent gains gave him optimism to believe the country would hit its growth target for the year.
“The national economy showed positive signs of growth in September. The confidence is building up to hit the full-year growth target of around 5%.”
He said the positive factors driving a steady economic recovery had “accumulated and increased” in September with most production and demand indicators improving and market expectations strengthening.
The GDP growth figures came a little more than a month after the central bank unveiled a major economic stimulus package aimed at freeing up bank lending and targeting the country’s crisis-hit property sector.
The State Information Center’s economic forecasting office said that the economy would turn around in the fourth quarter with the stimulus measure playing a key role.
“With the stimulus package taking effect and the continued strengthening of the endogenous driving forces, China will likely achieve the preset annual growth target this year,” said Zou Yunhan, deputy director of macroeconomic research at the center.
Independent economists agreed that the latest data indicated that with an additional push from some additional stimulus measures in the run down to year-end, Beijing would likely hit its growth target.
“The full-year GDP growth target of around 5% is now within reach with extra stimulus in Q4,” Economist Intelligence Unit senior economist Tianchen Xu told CNBC.
“Despite the multitude of challenges, China’s economy is not incurable as some would suggest,” Xu added. “There’s reason to be more optimistic about growth in the coming years, given how the government is committed to shoring up the economy.”