China’s economic growth dropped to the slowest level in nearly 30 years in the third quarter of 2019 as the tariff tensions with the United States hit its factory production.
Reuters citing China’s statistics bureau reported the world’s second largest economy grew 6.0 percent on-year in the July-September period, after expanding 6.2 percent in the second quarter and 6.4 percent in the first quarter.
The third-quarter growth was the slowest since the first quarter of 1992, the earliest quarterly data on record. It also fell to the bottom end of the target range of 6.0-6.5 percent that the government has set for this year.
The economy lost momentum mainly due to weakness in export-related industries, especially the manufacturing sector, which resulted from tariffs imposed by the United States, economists said.
“Given exports are unlikely to stage a comeback and a possible slowdown in the property sector, the downward pressure on China’s economy is likely to continue, with fourth-quarter economic growth expected to slip to 5.9%,” said Nie Wen, an economist at Shanghai-based Hwabao Trust.
Earlier data showed China’s exports fell 3.2 percent in September from a year ago, while imports dropped 8.5 percent during the same period, which reflects weaker demand at home and abroad.
The drags on demand have hit several key parts of the economy with weakness seen in freight shipments, factory power generation, employment, and entertainment spending. In September, factory gate prices (cost of a product excluding transportation or delivery cost) fell at their fastest pace in three years.
Despite the downbeat overall picture, the economy still saw some bright spots in the September data, with retail sales up 7.8% from a year ago, industrial output rising 5.8%, while fixed asset investment increased 5.4% from January to September.
The new data is boosting the case for Beijing to roll out fresh stimulus, economists said.