China yesterday reported that economic growth sank to a post-global crisis low as officials launched a media blitz to shore up confidence in its sagging stock market.
Growth in the third quarter slipped to 6.5 percent year-on-year from the previous quarter’s 6.7 percent, official data showed.
It was the slowest rate since early 2009.
Photo: Reuters
The economy was already cooling before a tariff war between Beijing and the US erupted.
Beijing last year tightened controls on lending to rein in a debt boom. That has weighed on housing sales and consumer spending.
Credit controls and trade tensions are “taking a bite out of economic momentum,” PNC Financial Services Group senior economist Bill Adams said in a report.
The impact of US President Donald Trump’s penalty tariffs of up to 25 percent on Chinese goods has been limited, but with the rest of its US$12 trillion-a-year economy slowing, the leadership has reversed course and ordered banks to lend.
“Downward pressure has increased,” Chinese government spokesman Mao Shengyong (毛盛勇) told a news conference.
Officials led by Chinese Vice Premier Liu He (劉鶴) tried to reassure investors about a stock market that has sagged 30 percent since January.
The decline is “creating good investment opportunities,” Liu said in comments carried by the Xinhua news agency and business newspapers and Web sites.
“China’s current economic fundamentals are good,” People’s Bank of China Governor Yi Gang (易綱) said on its Web site.
The benchmark Shanghai Composite Index ended the day up 2.6 percent.
The government also said that insurers would be allowed to create products to help stabilize the market by reducing “liquidity risk,” referring to fears lenders that accepted stock as collateral for loans might sell, flooding the market and driving a new price collapse.
Retail sales, factory output and investment in factories and equipment all weakened in the latest quarter.
The conflict with Washington has prompted Chinese leaders to step up a marathon effort to encourage self-sustaining growth driven by domestic consumption and reduce reliance on exports and investment.
Beijing has cut tariffs, promised to lift curbs on foreign ownership of auto producers and taken other steps to rev growth, but leaders have refused to scrap plans such as “Made in China 2025,” which calls for state-led creation of Chinese champions in robotics and other technologies.
Regulators have ordered banks to step up lending, especially to entrepreneurs, who create most of China’s new jobs and wealth. Forecasters say it would take time for results to show.
Forecasters say that if all the tariff hikes China and the US have threatened are imposed, that could cut China’s growth next year by up to 0.3 percentage points.
Exports to the US rose 13 percent last month despite the tariff hikes, down slightly from August’s 13.4 percent, helping push China’s politically volatile trade surplus with the US to a record US$34.1 billion.
Exporters of clothes and other lower-value goods say that US orders began falling in April as trade tensions worsened, but makers of less price-sensitive exports such as factory equipment and medical technology are confident they can keep their market share.
“In general, the impact is limited,” Chinese Ministry of Commerce spokesman Gao Feng (高峰) said. “Governments at all levels will also take active measures to help enterprises and employees cope with possible difficulties.”
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source