National economy China's economy grows by 4.6 percent compared to the previous year

According to information from Beijing, China's economy grew in the third quarter compared to the previous year. Gross domestic product rose by "4.6 percent" in the third quarter, the National Bureau of Statistics said on Friday.

The office referred to a "complicated and severe external environment" and "new problems in domestic economic development". This is the weakest growth in the last one and a half years in the world's second-largest economy.

The official target for economic growth this year is 5.0 percent. In the second quarter from April to June, gross domestic product grew by 4.7 percent, compared to 5.3 percent in the first quarter. Although the growth rates are high from a Western perspective, for China they are a far cry from the double-digit growth rates that have characterized the country's development for years.

The recovery of the Chinese economy has been sluggish since the end of the strict coronavirus measures. The economy is primarily struggling with a severe crisis in the real estate sector, which is also contributing to the weakness of domestic consumption. Economists believe a robust economic stimulus program is necessary to achieve the official growth target of 5 percent.

Government stimulus package

Due to the continuing economic weakness, China's government announced an economic stimulus package at the end of September. However, it failed to provide important details on the extent to which additional debt would be taken on, which could also be used to boost consumption. The initial euphoria on the stock markets subsided as a result.

"Although the measures taken by the leadership take account of the challenges facing the economy, the stimulus is still restrained in view of the situation, particularly in terms of boosting consumption," says economist Max Zenglein from the Merics China Institute in Berlin. In view of the challenges posed by the downward spiral of the real estate market, the measures announced are more likely to have a stabilizing effect than promote growth.

SDA