Al-Jazeerah: Cross-Cultural Understanding

www.ccun.org

www.aljazeerah.info

News, October 2021

 

Al-Jazeerah History

Archives 

Mission & Name  

Conflict Terminology  

Editorials

Gaza Holocaust  

Gulf War  

Isdood 

Islam  

News  

News Photos  

Opinion Editorials

US Foreign Policy (Dr. El-Najjar's Articles)  

www.aljazeerah.info

 

 

 

Editorial Note: The following news reports are summaries from original sources. They may also include corrections of Arabic names and political terminology. Comments are in parentheses.

Share the link of this article with your facebook friends

China GDP:

 Slowdown in Third Quarter Growth Ramps up Fears of More Economic Trouble Ahead

SCMP, October 18, 2021 

 
Underwhelming third quarter GDP growth has stoked fears of more economic pain ahead, file, October 18, 2021  

China GDP: slowdown in third quarter growth ramps up fears of more economic trouble ahead

China’s gross domestic product (GDP) in the third quarter grew by 4.9 per cent from a year ago, down from 7.9 per cent growth in the previous quarter The overall economic picture has ignited concerns about stagflation, which occurs when an economy is hit by slow growth, high inflation and unemployment

By Orange Wang

SCMP, 19 Oct, 2021

 A worse-than-expected third quarter economic performance for China has indicated there could be more pain ahead in the final three months of the year, while stoking fears of “stagflation”, analysts say.

On Monday, new data from the National Bureau of Statistics showed China’s gross domestic product (GDP) for the three months ending September grew by 4.9 per cent from a year ago, missing market expectations of 5 per cent growth and well below the 7.9 per cent gain seen in the second quarter and the blistering 18.3 per cent expansion between January and March.

While growth was extraordinarily strong in the first six months of the year due to a post-pandemic rebound, the underwhelming third quarter gain came amid a power crisis, Delta variant outbreaks, disasters such as floods and Beijing’s regulatory crackdown on various sectors of the economy.

A variety of factors have led to power rationings in some places recently, which has had a certain impact on normal productionFu Linghui

“In terms of absolute economic growth rate, the fourth quarter of this year and the first quarter of next year might be a bottom of the current economic circle,” said Zhou Hao, senior emerging markets economist at Commerzbank AG, adding he expected China’s GDP growth rate to decline to about 3 to 3.5 per cent in last three months of the year.

Lu Ting, chief economist at Nomura, estimated China’s economic growth would slump to 3 per cent in the fourth quarter and remain that way into spring.

Slower global economic growth would add headwinds to China’s foreign trade and therefore output and GDP growth, Xu Yating, senior economist at IHS Markit, said in a note on Monday.

EVERY SATURDAY SCMP Global Impact Newsletter By submitting, you consent to receiving marketing emails from SCMP. If you don't want these, tick here By registering, you agree to our T&C and Privacy Policy

Other NBS data on Monday offered little optimism.

China’s industrial production disappointed the market by only growing 3.1 per cent from a year earlier in September, falling from a 5.3 per cent rise in August and failing to meet the forecast 3.9 per cent.

The sharp slowdown was partly driven by China’s factory gate inflation, which rose to a record high of 10.7 per cent last month, mostly fuelled by soaring coal prices. For many smaller manufacturers, production is no longer economically viable.

“Since the beginning of this year, international energy prices have risen significantly, the price of natural gas and crude oil has repeatedly reached record highs, and the domestic supply of electricity and coal is tight,” Fu Linghui, a spokesman for the NBS, said at a press conference on Monday.

“A variety of factors have led to power rationings in some places recently, which has had a certain impact on normal production.”

The third-quarter data showed further signs that the risk of stagflation is risingZhang Zhiwei

At the same time, Monday’s figures showed China’s raw coal and coking coal output declined by 0.9 per cent and 9.6 per cent from a year ago in September respectively, triggering another round of price increases for both thermal and coking coal futures.

Fixed asset investment – a gauge of expenditure on items including infrastructure, property, machinery and equipment – grew by 7.3 per cent in the January-September period compared with a year earlier. This was lower than the January-August period when fixed asset investment was up 8.9 per cent.

There was one silver lining in retail sales, which rose 4.4 per cent last month, up from the 2.5 per cent gain in August, and above the estimated 3.5 per cent rise from analysts in a Bloomberg survey.

The overall economic picture has ignited concerns about stagflation, which occurs when an economy is hit by slow growth, as well as high inflation and unemployment.

Some economists have raised the spectre of possible 1970s-style stagflation similar to that seen in the United States, when commodity prices soared and supply chains slowed, followed by periods of interest-rate hikes and recessions.

“The third-quarter data showed further signs that the risk of stagflation is rising,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management

“Yet, the unemployment rate declined, which is puzzling,” he said, adding that could help the economy avoid stagflation for now.

Instead, China might drift into a state of “quasi-stagflation” in the final months of the year, marked by high producer price inflation and moderate consumer price increases, but low economic growth, said Shen Xinfeng, chief macro analyst at Northeast Securities.

“Under such a situation, we believe China’s monetary policy would be caught between a rock and a hard place to some extent in the fourth quarter,” she said.

That might explain Beijing’s reluctance to loosen monetary and fiscal policies to generate more economic activity, although that could also mean the fourth quarter economic performance will slow down further, Zhang added.

Following the release of the NBS data, Yao Jingyuan, the special research fellow at the Counsellors‘ Office of the State Council, said policymakers did not have to worry about a stagflation.

“China will not have high inflation or hyperinflation, we do not have the basis or conditions,” he told a press briefing.

Instead, he argued the country might need to consider how to stabilise the household prices with pork prices still falling, and the low consumer price inflation gave China space for more monetary easing.

He expected the central bank could cut the reserve requirement ratio by 1 percentage point in the fourth quarter.

***

Orange Wang covers the Chinese macroeconomy, and has many years of experience with China's monetary and fiscal policy moves. He also covered global market and financial news for a long time, with a particular focus on new technologies and their influences on economic growth and society. Before joining the South China Morning Post, Orange worked as a Shanghai Correspondent for ET Net, a Hong Kong financial news agency.

China GDP: slowdown in third quarter growth ramps up fears of more economic trouble ahead | South China Morning Post (scmp.com)

***

Share the link of this article with your facebook friends


Fair Use Notice

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

 

 

 

Opinions expressed in various sections are the sole responsibility of their authors and they may not represent Al-Jazeerah & ccun.org.

editor@aljazeerah.info & editor@ccun.org