China -- the world’s second-largest economy -- is growing at the slowest rate in 25 years.
The Chinese government reported its economy grew by just 6.9 percent from a year ago. China’s economy slowed from July to September 2015. And this was down from the 7 percent reported for April, May and June.
China’s economy has been hurt by weak world demand for Chinese exports, a recent stock market collapse and China’s surprise devaluation of its currency, the yuan.
Weak world demand makes it unlikely the government can meet its trade growth target of 6 percent for this year. Experts are predicting a slower decline in the Chinese economy into 2016.
A government spokesman told reporters in Beijing that the economy is facing some “downward pressures.” It is moving from an export-driven to a consumer-demand economy.
China’s central bank has cut interest rates five times since November to strengthen the economy. It is battling China’s worst economic slowdown in more than six years.
The government also has tried to reduce Chinese dependence on trade and investment. It wants Chinese consumers to spend more. Manufacturing companies are shrinking and getting rid of millions of jobs. Businesses targeting consumers are expanding.
Online businesses, restaurants and other services for Chinese consumers make up 41.7 percent of the country’s employment. Manufacturing makes up 34.7 percent, the government said.
Chinese leaders set an official growth target of “about 7 percent” for this year. But they do not want investors and the public to center too much on that goal.
The top economic official, Premier Li Keqiang, said in September he would accept growth below that level as long as the economy keeps creating new jobs.
A spokesperson with the Chinese National Bureau of Statistics said that although there is a slowdown in the industrial sector, China’s services sector is growing fast. Chinese leaders have been trying to reassure world markets for months that the economy is under control.
A surprise devaluation of the yuan and a sharp summer stock market drop in China raised fears among world markets.
Some experts say China overstates growth and the real rate may be as low as 5 percent.
Julian Evans-Pritchard is an analyst at Capital Economics in Singapore. He said in a report that today’s official Gross Domestic Product (GDP) numbers overstate the pace of growth in China by a “significant margin.”
Still, Mr. Evans-Pritchard wrote, “underlying conditions are subdued but stable” in the Chinese economy.
Zhou Hao is an economist at Commerzbank in Singapore. He told Reuters that the “overall downward pressure on the Chinese economy is still huge.” He expects the Chinese government will lower its yearly growth target in its next five-year plan at the end of this month.
Some top Chinese leaders have expressed concerns about the economy. President Xi Jinping told Reuters that the government is working to address those concerns.
Words in This Story
decline – n. the process of becoming worse in condition or quality
consumer – n. a person who buys goods and services
currency – n. the money that a country uses: a specific kind of money
slowdown – n. a decrease in speed at which something is moving or happening
sector – n. an area of an economy : a part of an economy that includes certain kinds of jobs
reassure – v. to make (someone) feel less afraid, upset, or doubtful
Gross Domestic Product (GDP) noun phrase – the total value of the goods and services produced by the people of a nation during a year, not including the value of income earned in foreign countries
subdued – adj. not strong, loud, intense, etc.
stable – adj. in a good state or condition that is not easily changed or likely to change