China’s economic growth slowed to 9 percent in the third quarter as global financial woes started taking a toll, the government said yesterday, signalling it would respond with new stimulus measures.
It was the first time since late 2005 that quarterly growth slipped into single digits, providing the most powerful indication yet that China was not insulated from the international economic downturn.
“The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate,” said Li Xiaochao (李曉超), spokesman of the National Bureau of Statistics.
“All these factors have started to release their negative impact on China’s economy,” Li told reporters in announcing the data.
As a result of the slowdown in the period from July to last month, growth in the world’s fourth-largest economy weakened to 9.9 percent over the first three quarters of the year.
This was down from 10.4 percent in the first half of this year and 12.2 percent in the first three quarters of last year.
“In China, any growth lower than 10 percent is a signal that the economy is getting sluggish, and that the outlook isn’t good,” said Ren Xianfang, a Beijing-based economist with consulting firm Global Insight.
The government signalled ahead of the release of the data that the need for new measures to boost growth had moved to the top of the policy-making agenda.
“There is the slowing trend in economic growth, the pace in the rise of corporate profits and fiscal revenue are falling, and the capital markets continue to swing and be sluggish,” it said on Sunday in a summary of a Cabinet meeting chaired by Premier Wen Jiabao (溫家寶).
The meeting, held on Friday, agreed on pro-growth measures such as support of home-buying and a cut in the tax on residential housing transactions, the statement said.
They also agreed on raising export tax rebates to ensure stable export growth, it said.
China’s trade surplus for the first nine months of the year reached US$180.9 billion, down 2.6 percent year-on-year, the customs administration said earlier.
Confirming the trend for a slowdown in the heavily export-dependent economy, industrial output growth was 15.2 percent in the first three quarters of this year, down from 16.3 percent in the first half, the statistics bureau said.
For last month alone, industrial output growth was 11.4 percent, it said.
As exports are slowing, China has looked to other sources of growth, particularly domestic investment and consumption.
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