China’s third quarter economic growth expected to have weakened
Today, Beijing will release gross domestic product figures for its third quarter.
China’s economic growth downshifted this quarter, with economists anticipating a rate of only 6.5%, down from 6.8 and 6.7 per cent during Q1 and Q2 of this year. Such a growth rate would be the country’s lowest since the first quarter of the 2009 global financial crisis.
Investment is the likely culprit. This past quarter, investment slowed and uncertainty rose as the trade war with the United States widened. The spat came at an inopportune time for China; the country is facing down tightening credit and voluminous debt.
The effects of the trade war on both the American and Chinese economies have yet to be fully felt; however, today’s figures could be indicative of a tipping point for the Chinese economy. A prolonged future period of declining growth from the impact of US tariffs could raise serious questions to Chinese economic planners over whether they want to continue to match the US tit-for-tat on tariffs or begin offering concessions.
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