As per a government figures the growth of China, world’ second largest economy during last quarter has fallen to a level which has not been witnessed in past three decades. While the country’s GDP grew by 6 % in past quarter ending September, it has been its weakest growth rate since 1992 and represents a come down from last quarter between April and June which was at 6.2 %. At this rate it has fallen below average rate of 6.1 % predicted by analysts polled by Refinitiv.
According to JP Morgan’s global market strategist Chaoping Zhu, ongoing trade war with US is weighing on the country’s investment activities and business ventures but stimulus policies by government has helped to buffer the slide. This figures emerged just a week after US-China reached a tentative agreement on end the damage to both their economies with agreement on few key issues.
The preliminary agreement last Friday includes immediate halt on tariff increases by US that were likely to start this year. Zhu added that though the ongoing negotiations will have a positive impact on business sentiments, the tariffs on Chinese imports are continuing to hurt as both sides have not reached any comprehensive agreement till date. After the data from China released markets slid lower and both Shanghai’s Composite Index and Hang Seng Index fell by 1.3 % and 0.5 %.
The stocks in Japan and Korea too came down from their highs of this session and while Nikkei 225 rose by 0.9 % before collapsing back the Kospi index fell by 0.8 % after going up by 0.5 %. Economic activity in China had improved during September with industrial production growing by 5.8 % from 4.4 % during September while retail sales rose by 7.8 %. But senior China economist for Capital Economics stated that slowdown in global demand continues to weigh heavily on exports and infrastructure expenditure will also slow down due to fiscal constraints.