China’s economic growth slows in Q3: poll
Plan for Hainan free trade zone unveiled, govt says effort unprecedented
BEIJING, Oct 17, (Agencies): China’s growth downshifted in the third quarter as investment slowed and the widening trade conflict with the United States weighed on sentiment, according to analysts surveyed by AFP.
The world’s second largest economy expanded by 6.5 percent in the July to September period, the poll of 12 economists found ahead of the official release of gross domestic product figures on Friday.
The sluggish growth would mark China’s slowest pace of expansion since the first quarter of 2009, when the financial crisis battered global markets and knocked China’s export machine.
The trade row with the US comes at a tough time for China’s economy, which has been hit by the government’s efforts to tackle a mountain of debt, with credit for local governments and stateowned enterprises tightening and infrastructure investment declining.
The third quarter forecast is down from 6.8 percent and 6.7 percent in the first and second quarters, respectively.
Chinese policymakers have set a growth target of roughly 6.5 percent for the year, down from 6.9 percent in 2017.
The slowdown could be from a combination of the trade war and deleveraging, said Betty Wang, China economist at ANZ.
While China’s exports to the US have held up and expanded this year as exporters rush goods across the Pacific to beat tariffs, the trade war has undermined confidence in the economy, Wang said.
“The sentiment has definitely hit the market already,” Wang said.
The key Shanghai Composite Index has fallen 22 percent this year amid the turbulence, while the yuan has fallen about nine percent against the dollar.
Beijing faces a delicate balancing act as it tries to increase lending to private companies in need of credit, without further inflating the debt balloon.
The People’s Bank of China has cut the amount of capital banks must hold in reserve several times this year, while the central bank’s chief, Yi Gang, indicated this week there are more levers to pull to keep the economic growth rate up.
Fixed-asset investment, especially in infrastructure, has fallen to record lows this year as Beijing pushed deleveraging and local governments idled or cancelled projects.
That has hit economic growth, analysts said, noting a rethink is underway.
“We believe the authorities have already given priority to boosting the domestic economy over the stability of the RMB (yuan) policy and financial deleveraging,” said Liu Ligang, Citibank’s chief economist for China.
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BEIJING: China on Tuesday granted the southern province of Hainan free trade zone (FTZ) status, vowing to significantly ease restrictions on foreign investment on the island in sector from agriculture to medical services.
Known for its sandy beaches and resort-lined coast, Hainan is the headquarters of China’s aviation-to-financial services conglomerate HNA.
President Xi Jinping first said in April China would set up a free-trade pilot zone and build an international free trade port in Hainan.
Spanning 35,400 square kilometres, the Hainan FTZ would be much bigger than China’s eleven existing FTZs, which are only 120 square kilometres each, Vice-Commerce Minister Wang Shouwen told a news conference.
Its size “reflects China’s determination and confidence to further open up to the outside world”, Wang said, adding about 40 percent of the measures introduced would be unique to Hainan.
The Hainan FTZ would seek to increase “openness” in sectors including seed production, tourism, medical care, aviation, and new energy vehicle manufacturing, aiming to “significantly relax the access to foreign capitals”, according to a notice released by the state cabinet on the government’s official website.
The cabinet did not mention gambling or casinos in its notice.