Observer on impact of China's weak growth data

Observer on impact of China's weak growth data

Hit by soft factory production amid a bruising Sino-US trade war and lacklustre demand at home, China's economic growth slowed more than expected to 6 per cent year on year in the third quarter, the weakest pace in nearly three decades.

Friday's data marked a further loss of momentum for the economy from the second quarter's 6.2% growth, likely raising expectations that Beijing needs to roll out more measures to ward off a sharper slowdown.

Gao told reporters at a weekly press conference that China's position and goal for the China-US trade negotiations has never changed, according to CNBC. "Beijing's approach has been rather measured and targeted, and they will continue to be so".

But the efforts have not been enough to offset the blow from softening demand at home, which highlights the struggle leaders have in their drive to recalibrate the economy from one driven by exports and investment to one built on consumer spending. Still, most analysts say the scope for aggressive stimulus is limited in an economy already saddled with piles of debt following previous easing cycles, which have sent housing prices sharply higher.

"Both sides' ultimate goal for the negotiations is to end the trade war, cancel all additional tariffs", he said.

US President Donald Trump said China agreed to a "very substantial phase one deal" that will be written over the next three weeks, adding that the deal would address intellectual property and financial services concerns, with China also expected to purchase $40 billion to $50 billion in US agricultural products - an amount yet to be confirmed by Beijing.

A slide in China's exports accelerated last month, while imports contracted for a fifth straight month.

Retail and auto sales also fell by 8.2% and 11.7% respectively.

China is battling weakened domestic spending and a prolonged trade war with the United States that has hurt Chinese exports.

Growth slowed from 6.2% in the second quarter.

A breakdown of the data showed output of the service sector, which accounted for 54 per cent of the total GDP, rose 7 per cent in the first three quarters of the year, outpacing a 2.9-per cent increase in the primary industry and a 5.6-per cent rise in the secondary industry. As recently as 2011 its growth rate exceeded 10pc. Sales in August grew 7.5 per cent.

This week, China reported weaker-than-expected import and export figures for September after Washington imposed new tariffs that month, triggering a tit-for-tat response from Beijing.

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