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Despite numerous efforts to stabilise the economy, China faced a significant slowdown in the third quarter of 2024, the weakest result since the beginning of the year. According to data released on Friday by China’s National Bureau of Statistics, the country’s GDP grew by 4.6% year-on-year between July and September. This is slightly higher than analysts’ forecasts of 4.5%, but lower than the previous quarter (4.7%).
Reasons for the slowdown
China, which has long been a global economic powerhouse, is now feeling the effects of anaemic consumption and a real estate crisis. This sector, which had been a key source of growth, has suffered a prolonged downturn due to developer debt and falling property prices, even in major cities. In September, prices for new homes rose in only two of the country’s 70 largest cities.
Beijing’s response
In order to achieve the 5% growth target, the Chinese authorities have introduced a number of stimulus measures. In particular, interest rates have been cut and restrictions on property purchases have been eased. Beijing expresses “full confidence” in achieving this goal, but experts remain less optimistic, believing that the economy needs more financial support.
Signs of hope
Despite the overall slowdown, there are some positive signs. Retail sales, which is an important indicator of consumer sentiment, grew by 3.2% in September, following a modest 2.1% increase in August. These data indicate a gradual improvement in the consumer sector, which could be key to stabilising the economy going forward.
Although China is showing some signs of recovery, the current economic environment remains challenging. The real estate sector continues to require attention and additional incentives, and investor confidence in the country’s ability to achieve its growth targets remains questionable.
