Amid acute power shortage and crisis-hit real estate sector China’s economic growth in the third quarter of this year slowed to 4.9 per cent, much below expectations.
In the January to March quarter Beijing had stunned the world with an 18.3 per cent economic growth. However, economic growth has been slowing since then. In the second quarter, China, the first country to come out of the Covid 19 pandemic, clocked a GDP growth of 7.9 per cent.
An increase in raw material costs and supply side constraints have also had a direct impact on the country’s economic indicators.
China’s official manufacturing purchasing managers’ index (PMI) too dropped to a 19 month low of 49.6 in September from 50.1 in August leading to worries that economic recovery for the Asian giant could take longer than expected.
The PMI is an indicator, reflecting the trends of economic trends in the manufacturing and service sectors. A reading below 50 is taken as a contraction.
To add to the woes, China’s debt levels have been steadily rising and now with the default of the country’s real estate major Evergrande Group, worries have multiplied.
Meanwhile, Chinese President Xi Jinping’s call for Common Prosperity has also dampened investors as well as citizens.
Analysts told India Narrative that the economic slowdown could continue if the current trends are not reversed.