Chinese President Xi Jinping has another reason to be happy. The Chinese economy grew more than expected, despite problems with anti-pandemic measures.
China’s gross domestic product increased 3.9% yoy in the third quarter, more than expected. Prospects are clouded by the threat of a global recession and measures taken against the spread of the coronavirus. In the second quarter, the Chinese economy grew at a slower pace of 0.4%. This is clear from data released today by China’s Bureau of Statistics, according to Reuters.
Analysts interviewed by Reuters had forecast GDP growth of 3.4 percent in the period from July to September. Compared to the previous quarter, the GDP of the world’s second largest economy grew by 3.9%. Experts had estimated a rate of 3.5%. In the second quarter, the Chinese economy weakened by 2.6% on a quarterly basis.
Xi Jinping secured a third term as party leader. Heads are falling. They took the former president off the stage
The 20th Congress of the Chinese Communist Party has ended in Beijing. Thanks to an amendment to the party’s constitution, current president Xi Jinping secured an unprecedented third five-year term as party leader. The conference, which was attended by about 2,300 participants, lasted from last Sunday and only this Sunday the changes of direction of the party should be announced. According to the agencies, however, Prime Minister Li Keqiang (pictured) will abandon this leadership, which means he will also rise to the post of prime minister or head of the central bank. The convention was marked by an incident in which security escorted former Chinese President Hu Jintao off the podium from his place of honor alongside Xi Jinping (see video link below).
The data was originally supposed to be released on October 18, but this was unusually delayed until after the Communist Party Congress, which took place last week. It saw Chinese President Xi Jinping secure an unprecedented third term as the country’s leader and introduce a governing body made up of loyal members.
These appointments “show that China is moving from economic pragmatism to political ideology,” said Aleš Koutný of Janus Henderson Investors.
A number of problems are crushing the Chinese economy
Despite the recovery, the Chinese economy faces a number of challenges at home and abroad. China’s zero-tolerance anti-pandemic strategy and key real estate problems have added to the external pressure of the Ukrainian crisis and the global economic slowdown due to interest rate hikes by central banks.
According to a Reuters poll, China’s growth will slow to 3.2% this year. This is well below the official 5.5% target and would be one of the worst results in nearly half a century.
Earlier this month, the International Monetary Fund reduced its forecast for China’s growth by 0.1 percentage point to 3.2 percent this year and by 0.2 percentage point to 4.4 percent in the year. 2023, compared to the projections published in July.
S&P Global Ratings said in its September report that China’s zero-tolerance anti-pandemic policy was a bigger threat to corporate outlook than inflation, which rose to 2.8% year-on-year in September. Recurring cycles of epidemics and lockouts are putting the country’s fragile consumption to the test and aggravating its housing crisis.
Trader’s week: Stanjur’s mistake in rate setting hurt small investors
Equity markets have been looking for direction over the past week and have gradually returned closer to their lows. Equities continue to suffer from the strong dollar, high interest rates and uncertainty that inflation will finally be tamed. More or less the same thing. The leading US stock index S&P 500 fell to 3700 points. However, it is good that the institutions’ results in Q3 are looking pretty decent so far.
What is inflation in Europe or the United States? Decades of records are falling
Not only is Czechia struggling with rapidly rising inflation, but also dozens of countries around the world, and a number of countries are reporting double-digit increases in June and July and the highest values in decades – in the Czech Republic in September it was the highest since December 1993. In Slovakia it is the highest since 2000, in Great Britain and the USA since the early 1980s, in Germany the highest in the last 70 years, in the euro area since the introduction of the euro in 1999. Turkish inflation even hit a 24-year high of 83.5% in September. Central banks then raise key interest rates, but this often means a reduction in economic growth. View an overview of inflation rates around the world.
