China’s Economic Growth Falls From 6.3% To 4.9%, Here’s Why
China’s economy isn’t growing as fast as it did before. In the third quarter of this year, it grew by 4.9%, which is less than the 6.3% growth we saw in the previous quarter. Still, it did a bit better than what experts were guessing.
Why the slowdown? A couple of reasons. Global demand isn’t that strong, and there are problems in China’s property market. Their own people aren’t spending much either.
Now, if we talk quarter-to-quarter, not year-over-year, China’s economy grew by 1.3% in this quarter. It’s better than the 0.8% from the last one. So, a tiny bit of good news for China.
For this whole year, China aims for a 5% growth, and it looks like they’re on track. But, they can’t celebrate too soon. Experts say it is going to slow down to 4.5% next year.
China lifted COVID restrictions, and people were shopping and dining like crazy earlier this year. But that buzz didn’t last long. In simple terms, the excitement cooled off quicker than expected.
So, what’s China doing about it? They’re pumping money into things like infrastructure and making it easier to buy homes. They’ve also cut interest rates to encourage spending.
So basically, China’s economic engine is still running, but not at speed, istead it’s declinig. The relations between India and China in trade and manufacturing, are also impacted due to China’s vaillainy at borders.
Why is China facing massive decline in economic growth?
China’s economy is facing a number of challenges, both internal and external. These challenges are causing the economy to slow. China’s economy is slowing for a number of reasons, including:
- Weaker Global Demand: The global economy is slowing, which is reducing demand for Chinese exports.
- Deflationary pressures: China is facing deflation, which means that prices are falling. This can discourage consumers from spending and businesses from investing.
- Failing Property Sector: China’s property sector has been in a slump for several years. This is a major problem because the property sector is a major driver of economic growth in China.
- COVID-19 Restrictions: China’s strict COVID-19 restrictions have disrupted businesses and supply chains. Chinese banks have also got impacted significantly.
- Demographic Challenges: China’s population is aging and shrinking. This is making it difficult for the economy to grow.