As the prospect of an Evergrande collapse looms large over the global market, China's GDP data released today shows that the country has only grown 4.9% which is the weakest it has been since the third quarter in 2020 and slower than the second quarter's 7.9%.
"The domestic economic recovery is still unstable and uneven," said National Bureau of Statistics (NBS) spokesperson Fu Linghui at a briefing in Beijing on Monday. That marked a further deceleration from the 18.3% expansion in the first quarter, when the year-on-year growth rate was heavily flattered by the very low comparison seen during the COVID-induced slump of early 2020.
Although retail consumption grew to 4.4% in September, the main worries for the Chinese economy are slowdown in manufacturing sector afflicted by energy shortages and the fears of Evergrande defaulting on its debt which has grown to 300 billion dollars. The Chinese government has enacted stricter policy curbs on the property market due to fears of a property bubble hurting the country's growth prospects.
Premier Li Keqiang said on Thursday that China has ample tools to cope with economic challenges despite slowing growth, and that the government is confident of achieving full-year development goals. While growth has moderated due to a sporadic rise in coronavirus infections, China's economy is expected to grow 8% this year, said Yi Gang, governor of the People's Bank of China, at an online meeting of the Group of 30 International Banking Seminar, which coincides with the annual meetings of the International Monetary Fund and World Bank.