News | International
12 Nov 2019 17:08
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • Sport
  • Weather
  • Finance
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > International

    China's economy hits three-decade low, with GDP growth falling to 6pc

    The impact of the trade war, slowing factory output and weak domestic demand has put the brakes on China's economy, dragging it down to the lower end of the Government's target.

    China's economy has hit a three-decade low with GDP growth grinding down to 6 per cent.

    It is the fifth consecutive quarter of slowing growth and stepdown from the 6.2 per cent recorded previously.

    Even allowing for the impact of the trade dispute with the US and weak factory output, the third quarter result was softer than anticipated by the market and right at the bottom end of the Government's full-year growth target of between 6 and 6.5 per cent.

    Recent trade data has shown both deteriorating domestic demand with imports falling for the fifth consecutive month, while the slowdown in exports has accelerated.

    "The preliminary breakdown shows that services activity picked up but that this was more than offset by a slowdown in industry and construction," Capital Economics China economist Julian Evans-Pritchard said.

    But the economic pulse appears to have strengthened marginally at the start of the fourth quarter, with firmer readings in industrial production, retail sales and infrastructure spending in September.

    Industrial production jumped from 4.4 per cent year-on-year growth in August to 5.8 per cent.

    Manufacturing and construction a drag

    Westpac's Elliot Clarke said the slowdown was unsurprisingly driven by manufacturing and construction.

    "Nominal annual growth in this sector has halved from 10 per cent a year ago to 5 per cent currently," Mr Clarke said.

    "While recent PMI [purchasing managers' index] readings suggest a base may be forming, growth in this part of the economy is set to remain weak for some time."

    Mr Clarke noted domestic investment continued to be a constraint on growth.

    "Investment growth in the manufacturing sector has been weak throughout 2019 after a fleeting surge in late 2018," he said.

    "Utilities and transport spending is also struggling to accelerate from historically weak levels. This is despite significant political and financial support for local government authorities in 2018/19."

    More stimulus

    Mr Evans-Pritchard said the uptick in activity is likely to be temporary.

    "Despite a stronger September, pressure on economic activity should intensify in the coming months," he said.

    "Cooling global demand will continue to weigh on exports, fiscal constraints mean that infrastructure spending will wane in the near-term and the recent boom in property construction looks set to unwind."

    Iron ore prices have fallen sharply this week over concerns that steel demand was tumbling at a time seaborne supply was rising.

    The iron ore spot benchmark at $US86 a tonne is now down around 30 per cent from its recent peak at the end of June.

    The downward trend is unlikely to be arrested by pause in the US/China trade war after talks earlier this month came up with a verbal agreement to ease hostilities.

    While a further easing in credit restrictions on banks has helped boost lending in recent weeks, Mr Evans-Pritchard said more stimulus was likely.

    "We expect monetary policy to be loosened before long in response, but it will take time for this to put a floor beneath economic growth," he said.

    © 2019 ABC Australian Broadcasting Corporation. All rights reserved

     Other International News
     12 Nov: Silver-backed chevrotain, or mouse-deer, thought extinct, caught on camera in Vietnam
     12 Nov: Nigel Farage's Brexit Party will not compete in Tory seats during upcoming UK election
     12 Nov: Video shows American Airlines plane sliding off Chicago runway and crashing into snow
     11 Nov: Uber CEO compares Jamal Khashoggi killing to 'mistakes' with driverless cars
     11 Nov: The first generations of 'digi kids' are struggling with literacy as experts warn against screen time
     10 Nov: Disney employees, former assistant school principal arrested in child pornography sting in Florida
     10 Nov: NSW fire victims identified as George Nole and Julie Fletcher
     Top Stories

    Up-and-coming Tall Fern Matangiroa Flavell is buzzing at the opportunity to play in front of a home crowd in their first match of the Women's Olympic Qualifying Series in Auckland More...

    The Health Minister's defending emergency funding for District Health Boards More...

     Today's News

    The Health Minister's defending emergency funding for District Health Boards 16:57

    Elizabeth Banks is so thankful that her husband is the "strongest supporter" of her career 16:44

    Chris Hipkins says an extra member on a school board, won't change outcomes for Maori students 16:17

    Dame Helen Mirren was given a "lesson in embarrassment" during a meeting with Queen Elizabeth 16:14

    Law and Order:
    The key witness in a Dunedin murder trial says it's true the victim once woke up to find him at the end of her bed 15:47

    The Associate Transport Minister says there are a number of different people involved when it comes to Auckland's port 15:47

    Christian Bale is "done" with shedding weight for his on-screen roles 15:44

    Up-and-coming Tall Fern Matangiroa Flavell is buzzing at the opportunity to play in front of a home crowd in their first match of the Women's Olympic Qualifying Series in Auckland 15:27

    Wellington needs to be prepared for inevitable earthquakes 15:17

    Robert De Niro regrets not having an open relationship with his late father Robert De Niro Sr 15:14

     News Search

    Power Search

    © 2019 New Zealand City Ltd