World Economy

China Growth at 5-Year Low

China Growth at 5-Year LowChina Growth at 5-Year Low

China’s economic growth in the third quarter fell to its slowest since the depths of the global financial crisis more than five years ago, an AFP survey projects.

The country’s gross domestic product (GDP) is predicted to have risen 7.2 per cent year-on-year in the July-September period, the poll of 17 economists showed.

The median forecast for the world’s second-largest economy, a key driver of global growth, would be the worst since the first quarter of 2009, when growth stagnated at 6.6 percent.

The government will release the official GDP figure on Tuesday.

The setback would be likely to prompt more stimulus intervention from Beijing, respondents said, which has set a 7.5 percent target for expansion this year — the pace of growth in the second quarter.

China’s economy has been pummeled by a deflating property bubble as well as a government crackdown on corruption and weak demand from Europe.

“Given much weaker growth... Beijing will have to push ahead with more aggressive policies in order to hit the 7.5 percent GDP growth target in 2014,” said a Beijing-based economist for Standard Chartered Bank, Shen Lan.

 Missing the Target

The consensus is that China will miss that target, though Premier Li Keqiang has allowed himself an escape clause by qualifying the goal as “around” 7.5 percent.

The analysts polled by AFP expect the economy to grow 7.3 percent this year, unchanged from the previous forecast three months ago but slower than actual growth of 7.7 percent in 2013.

Although China’s economy is still growing faster than most other countries, some policy makers believe seven per cent annual growth is needed to maintain job creation in the world’s most populous nation.

Economic data for September have been mixed. Better than expected exports and imports brought some cheer, while the weakest inflation in nearly five years showed the economic engine is sputtering.

China has so far clung to “targeted” measures to spur growth, shunning a repeat of its 4.0 trillion yuan ($652.9b) stimulus package of 2008.

The chief economist for China’s central bank, Ma Jun, said earlier this month that the government wanted to avoid “excessive stimulus”.