China’s growth sinks during Q3
Officials try to shore up confidence through media blitz
BEIJING — China reported economic growth sank to a post-global crisis low as finance officials launched a media blitz Friday to shore up confidence in its sagging stock market.
Growth in the quarter that ended in September slipped to 6.5 percent over a year earlier from the previous quarter’s 6.7 percent, official data showed. It was the slowest rate since early 2009. The world’s secondlargest economy already was cooling before a tariff war between Beijing and President Trump erupted. Beijing tightened controls on lending last year to rein in a debt boom. That has weighed on housing sales and consumer spending. Car buyers are steering clear of dealerships.
Credit controls and trade tensions are “taking a bite out of economic momentum,” said Bill Adams of PNC Financial Services Group in a report.
The impact of Trump’s penalty tariffs of up to 25 percent on Chinese goods in a dispute over Beijing’s technology policy has been limited. But with the rest of the $12 trillion-a-year economy slowing, the communist leadership has reversed course and ordered banks to lend. Officials led by China’s economic czar, Vice Premier Liu He, tried Friday to reassure investors about a stock market that has sagged 30 percent since January.
The decline is “creating good investment opportunities,” Liu said.
“China’s current economic fundamentals are good,” the central bank’s governor, Yi Gang, said on its website.
The government also said insurers will be able to create products to stabilize the market by reducing “liquidity risk.” That refers to fears lenders who took 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 up 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.