Proving all forecasts fake, China’s GDP growth decelerated in Q3 2008 due to decrease in exports and slowdown in property market following the global financial crunch.
According to the National Bureau of Statistics, growth of China’s GDP retarded more than expectation in Q3 2008, as per the news published by marketwatch. This is the fifth successive quarterly decline for the Chinese GDP, missing the forecasts made by the National Bureau of Statistics.
After a 10.1% growth in the period of April-June 2008, the economy of China expanded 9% in July-September 2008. This was the slowest expansion since Q2 2008 and thus, it turned down the consensus predictions of a 9.5% increase.
Further, September 2008 witnessed an expansion of 11.4% in industrial production, which is below the 12.9% growth recorded in August 2008. The CPI grew 4.6% in September 2008 that is again a decline from 4.9% rise registered in August 2008.
The primary reason that led to the declining growth in China’s economy is the chaos in the global financial market. Further, in addition to the dark future of exports, slump in the property market is also posing a big threat to the Chinese economy.
The latest figures of Chinese economy will demoralize the observers who were hoping that the growth of China would make up for declining demand from developed nations. Costs of commodities have also fallen, affecting the big resource-export countries like Australia. Further, nearly half of the Chinese toymakers have closed down in 2008.
According to a Research Analyst at RNCOS, “The moderating inflation pressure provided the economy planners (of China) with the scope to frame a looser monetary policy and raise state-expenditure. However, China’s industrial production growth is likely to dip down further as export-oriented industries are struggling with external flaws, and heavy industries have adapted to the falling domestic demand.”
