China leek little economic damage due to the corona crisis, but growth fell in the third quarter. The causes are energy shortages and the faltering of real estate giant Evergrande.
The Chinese National Bureau of Statistics estimates that gross national product grew by 4.9 percent in July, August and September compared to last year. That is considerably lower compared to the previous quarter. Then the growth was still 7.9 percent.
Energy shortage
“The energy shortage is one of the main causes that the Chinese economy is still weakening after corona. China has recently closed many dirty coal mines. Now there is a lot of demand for energy and no coal can be supplied or only at high prices,” says correspondent Sjoerd the Daas in the NOS Radio 1 news
Due to the ongoing power shortages, factories in various parts of the country were forced to shut down or only partially open. China also had to deal with rising energy prices and companies were shut down due to corona infections.
The Chinese population is mainly affected by the problems in the real estate sector. Real estate giant Evergrande is in debt of hundreds of billions and its strict regulation is leading to major turmoil in the Chinese housing market.
Falling house prices
“After house prices have risen for years, there is now a threat of a fall in prices,” explains correspondent Den Daas. “That makes consumers concerned, because if your house drops in value, you may feel less rich and you will spend less. That in turn can cause economic growth to weaken further.”
The weakening of the Chinese economy has no direct consequences for the global economy. Den Daas: “It can be affected if less stuff is purchased by China. But now there are also all kinds of disruptions in the chain, for example due to the container shortage. So at the moment the damage will not be too bad.”
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