China’s economic growth accelerates but weak amid shutdowns

Oct 23, 2022, 11:34 PM | Updated: Oct 25, 2022, 11:47 pm
Chinese President Xi Jinping is seen at the end of the Chinese Communist Party's 20th Party Congres...

Chinese President Xi Jinping is seen at the end of the Chinese Communist Party's 20th Party Congress on a giant screen a commercial district of Hangzhou in eastern China's Zhejiang province on Sunday, Oct 23, 2022. China's economic growth accelerated in the latest quarter but still was among the slowest in decades as the country wrestled with repeated closures of cities to fight virus outbreaks. (Chinatopix via AP)

(Chinatopix via AP)

BEIJING (AP) — China’s economic growth picked up in the latest quarter but still was among the weakest in decades as the ruling Communist Party tries to reverse a slump while enforcing anti-virus controls and a crackdown on debt in its vast real estate industry.

The world’s second-largest economy grew by 3.9% over a year earlier in the three months ending in September, up from the previous quarter’s 0.4%, official data showed Monday.

The announcement was planned for last week but postponed while the ruling Communist Party met to award President Xi Jinping a new term as leader.

Xi, the most powerful leader in decades, wants a bigger party role in business and technology development. That has prompted warnings tighter control of entrepreneurs who generate jobs and wealth will depress growth that already was in long-term decline.

The party gave Xi a free hand by installing a seven-member ruling Standing Committee made up of his allies. Supporters of free enterprise including Premier Li Keqiang, the party’s No. 2 until last week, were dropped from the leadership.

Chinese stock markets closed lower Monday despite the unexpectedly strong data, suggesting investors still are uneasy about the country’s growth prospects.

The country’s market benchmark, the Shanghai Composite Index, lost more than 2%. The Hang Seng index in Hong Kong plunged by an unusually wide daily margin of 6.4%. Tokyo and other Asian markets gained.

The International Monetary Fund and private sector forecasters say the economy will expand by as little as 3% this year. That would be the second weakest since the 1980s after 2020, when growth plunged to 2.4% at the start of the coronavirus pandemic.

Investors and the public watched the congress for initiatives to stimulate the economy or reduce the impact of “Zero COVID” controls that shut down cities and disrupt business, but none were announced.

The latest slide in growth that began in mid-2021 hurts China’s trading partners by depressing demand for imported oil, food and consumer goods.

The improvement is “mainly a result of more flexible” anti-virus controls that isolate individual buildings or neighborhoods instead of cities, said Iris Pang of ING in a report. But she said more lockdowns are “still a big uncertainty.”

“This uncertainty means the effectiveness of pro-growth policy would be undermined,” Pang said.

Growth slid after controls on debt that regulators worry is dangerously high caused a slump in real estate sales and construction, one of China’s biggest economic engines. Economic growth fell to 4% over a year earlier in the final quarter.

Beijing has eased mortgage lending and local governments have taken over some unfinished projects to make sure buyers get apartments. But regulators are sticking to debt limits have forced small developers into bankruptcy and caused some bigger competitors to miss payments to bondholders.

The ruling party is enforcing “Zero COVID” despite rising costs and public frustration after Shanghai and other industrial centers were temporarily shut down. That has boiled over into protests in some areas at a time when other countries are easing anti-virus controls.

For the first nine months of 2022, growth was 3% over a year earlier, up from 2.5% in the first six months but barely half the ruling party’s official 5.5% target. Leaders have stopped talking about that goal but promised easier lending and other measures to boost growth.

Growth is “highly uneven” and supported by government spending on building roads and other public works while consumer spending is weakening, said Larry Hu and Yuxiao Zhang of Macquarie in a report.

In September, retail sales growth fell to 2.5% over a year earlier from the previous month’s 5.4%. Growth in factory output accelerated to 6.3% from 4.2%.

Also Monday, trade data showed export growth declined to 5.7% compared with a year earlier in September from the previous month’s 7%. Imports crept up 0.3%.

“Most of the economy lost momentum last month,” said Julian Evans-Pritchard of Capital Economics in a report. “The situation looks to have worsened in October.”

Investment in infrastructure, mostly government money, rose 16% in September compared with the previous month’s 15%.

Repeated shutdowns and uncertainty about business conditions have devastated entrepreneurs. Small retailers and restaurants have closed. Others say they are struggling to stay afloat.

Beijing is using cautious, targeted stimulus instead of across-the-board spending, a strategy that will take longer to show results, economists say. Chinese leaders worry too much spending might push up politically sensitive housing costs or corporate debt.

___

National Bureau of Statistics (in Chinese): www.stats.gov.cn

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

A small plane rests on live power lines after crashing, Sunday, Nov. 27, 2022, in Montgomery Villag...
Associated Press

Plane caught in power lines after crash, 2 occupants unhurt

GAITHERSBURG, Md. (AP) — A small plane carrying two people got stuck in live power lines Sunday evening in Maryland, causing widespread power outages in the surrounding county as officials tried to extricate the aircraft. The Federal Aviation Administration said in a statement that the single-engine plane, which had departed White Plains, N.Y., crashed into […]
19 hours ago
This combination of photos provided by the Chesapeake, Va., Police Department shows top row from le...
Associated Press

Walmart shooting claims teen, young woman, father, mother

CHESAPEAKE, Va. (AP) — A 16-year-old helping his family. A custodian and father of two. A mother with wedding plans. A happy-go-lucky guy. A longtime employee. That’s how friends and family described some of the six people killed at a Walmart in Chesapeake, Virginia, when a manager opened fire with a handgun before an employee […]
19 hours ago
FILE - Los Angeles Rams wide receiver Odell Beckham Jr. walks on the sideline during a NFL division...
Associated Press

NFL free agent Odell Beckham Jr. taken off plane in Miami

MIAMI (AP) — NFL free agent Odell Beckham Jr. was removed by police from an aircraft before takeoff at Miami International Airport after officials said he failed to respond to requests to buckle his seatbelt and appeared to be unconscious, police and airline officials said Sunday. “Fearing that Mr. Beckham was seriously ill, and that […]
19 hours ago
FILE - Chickens walk in a fenced pasture at an organic farm in Iowa on Oct. 21, 2015. Nebraska agri...
Associated Press

Bird flu prompts slaughter of 1.8M chickens in Nebraska

OMAHA, Neb. (AP) — Nebraska agriculture officials say another 1.8 million chickens must be killed after bird flu was found on a farm in the latest sign that the outbreak that has already prompted the slaughter of more than 50 million birds nationwide continues to spread. The Nebraska Department of Agriculture said Saturday that the […]
19 hours ago
This photo provided by the U.S. Navy shows U.S. Navy Petty Officer 2nd Class Thomas James in Centur...
Associated Press

Colorado shooting victim ‘wanted to save the family I found’

COLORADO SPRINGS, Colo. (AP) — A member of the U.S. Navy who was injured while helping prevent further harm during a shooting at a gay nightclub in Colorado last weekend said Sunday that he “simply wanted to save the family that I found.” Petty Officer 2nd Class Thomas James made his first public comments on […]
19 hours ago
FILE - Director Quentin Tarantino, left, poses with Friars Club Dean Freddie Roman at the Quentin T...
Associated Press

Borscht Belt comedian Freddie Roman dies at age 85

Comedian Freddie Roman, the former dean of The Friars Club and a staple of the Catskills comedy scene, has died. He was 85. Roman died Saturday afternoon at Bethesda Hospital in Boynton Beach, Florida, his booking agent and friend Alison Chaplin said Sunday. His daughter told the entertainment trade Deadline that he suffered a heart […]
19 hours ago

Sponsored Articles

...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Desert Institute for Spine Care photo)...
DESERT INSTITUTE FOR SPINE CARE

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
...
SCHWARTZ LASER EYE CENTER

Key dates for Arizona sports fans to look forward to this fall

Fall brings new beginnings in different ways for Arizona’s professional sports teams like the Cardinals and Coyotes.
China’s economic growth accelerates but weak amid shutdowns