Construction and manufacturing were the main drags for China’s slower-than-expected third-quarter economic growth, while technology offered some support, supplementary data released yesterday showed.
Growth in the construction sector slowed to 2.5 percent from a year earlier compared with 4 percent in the previous quarter, the Chinese National Bureau of Statistics said.
The financial sector also grew at a slower pace of 4 percent, while information technology continued to expand at a fast clip of 32.8 percent, compared with 31.7 percent in the second quarter.
The main GDP report released on Friday showed the overall economy in the third quarter expanded 6.5 percent from a year earlier, compared with the previous quarter’s 6.7 percent.
That was the slowest pace since the aftermath of the global financial crisis in 2009.
China’s economy has faced increasing headwinds this year, with simmering trade tensions and a slumping stock market hurting confidence in the outlook. Those problems have prompted officials to step up stimulus and pledge further support, but the effects of those measures are yet to be seen and more might be needed.
The weak construction reading tallies with data in Friday’s GDP report that showed infrastructure investment continuing to contract. Manufacturing growth slowed from 6.6 percent in the second quarter to 6 percent, the weakest level since the data were first made available in March last year.
The services sector remained the dominant driver of growth and accounted for more than half of total economic output. Third-quarter services growth edged up from 7.8 percent in the second quarter to 7.9 percent.
The GDP breakdown, typically released a day after the headline report, offers greater detail on progress in the Chinese economy’s re-balancing from old smokestack industries to newer services and consumption.
The statistics agency now publishes growth rates for the technology and commercial-services sectors, highlighting the contributions of the new economy, which policymakers are doing more to encourage and support.
The services sector accounted for 53.1 percent of GDP in the first three quarters, slowing from 54.1 in the first half, while consumption contributed 78 percent to growth in the six-month period, data from Friday showed.
Separately, China yesterday released a detailed draft plan for personal income tax cuts, in a move to allow taxpayers to claim deductions for expenses on healthcare, education, mortgage interest or rent, and supporting elderly relatives, Xinhua news agency reported.
The deductible amount under each category ranges from 1,000 yuan (US$144) per month to 2,000 yuan per month, according to the draft plan released by the Chinese Ministry of Finance and the Chinese State Administration of Taxation.
The announcement had been widely expected after China raised the personal-income tax-free threshold to 5,000 yuan per month from 3,500 yuan earlier this year.
Chinese Premier Li Keqiang (李克強) last month said that the nation would push for more significant tax cuts and ministry officials also indicated that more measures were under way this month.
The draft plan is to have a two-week public comment period and the final changes are to take effect from Jan. 1, Xinhua reported.
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