Daily Times

BEIJING: China’s economy expanded at its slowest rate in nearly three decades during the third quarter as it was hit by the long-running US trade war and cooling domestic demand, data showed Friday, with an official warning of “mounting downward pressure.”

With China a key driver of global growth, the soft reading added to concerns about the world economy and prompted speculation that authorities will unveil fresh stimulus following a series of other recent measures.

Gross domestic product expanded 6.0 percent in July-September, from 6.2 percent in the second quarter, according to the National Bureau of Statistics (NBS).

The reading — in line with an AFP survey of 13 analysts — is the worst quarterly figure since 1992 but within the government’s target range of 6.0-6.5 percent for the whole year. The economy grew 6.6 percent in 2018.

While NBS spokesman Mao Shengyong said the economy was showing stability, he warned: “We must be aware that given the complicated and severe economic conditions both at home and abroad, the slowing global economic growth, and increasing external instabilities and uncertainties, the economy is under mounting downward pressure.”

Services and high-tech manufacturing were the key areas of growth, while employment was “generally stable,” he said.

Beijing has stepped up support for the economy with major tax cuts and measures making it easier for banks to increase lending, including a reduction in the amount of cash they must keep in reserve.

And on Wednesday the central People’s Bank of China said it would pump 200 billion yuan ($28 billion) into the financial system through its medium-term lending facility to banks, to maintain liquidity.

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.

The trade conflict and weak domestic demand prompted the International Monetary Fund to lower its 2019 growth forecast for China to 6.1 percent from 6.2 percent on Tuesday.

A “phase one” deal announced by US President Donald Trump last Friday after he met China’s top negotiator Liu He in Washington offered a temporary reprieve from further tariff hikes.

The deal, however, did not roll back any of the tariffs already imposed on hundreds of billions of dollars in trade between the economic powers, nor did it address another round of import taxes planned for December.