China economy grows less than expected in third quarter, official data shows

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China economy grows less than expected in third quarter, official data shows

China's economy grew slower than expected in the third quarter, official data showed on Monday as power outages and supply bottlenecks hurt factories while sporadic Covid 19 outbreaks weighed on consumption.

Gross domestic product GDP GDP expanded 4.9% in the quarter of July-September from one year earlier, the national statistics bureau said, slowing from 7.9% in April-June compared to expectations for a rise of 5.2% expected by economists.

The result became the weakest reading since the first quarter of the third quarter of 2014 when GDP also grew 4.9% and marked a further deceleration from a record 18.3% expansion in the third quarter.

The world s second largest economy has suffered from pandemic but the recovery is losing steam. Problems including faltering factory activity, power cuts in the country's critical northern industrial heartland, weak consumer demand and a slowing property sector have fanned speculation that policymakers may announce more stimulus measures in coming months.

One of the biggest concern about the China Evergrande Group, a world s number two developer (Canada ) that is struggling under a $300 billion debt pile is the future of China Evergrande Group.

It has already miss three repayments of bonds that it owes overseas investors in US dollars, and trade in its shares in Hong Kong was suspended since 4 October.

There are concerns that Evergrande could go into official default this week when the 30 - day grace period for missed repayments totals $83.5 m.

As the company wrestles with its debt, worries about a possible spillover of credit risk from China s property sector to the wider economy have intensified.

Economic growth has been slowed down a little bit, but the trajectory of economic recovery remains unchanged, he said.

Authorities will first try to prevent problems at Evergrande spreading to other real estate companies to avoid a larger systematic risk, he added.

The rumbling crisis in Evergrande and other major homebuilders led the weakness in Chinese firms to a record-low risk premium on government bonds last week and triggered a fresh round of credit rating downgrades.

The interest of creditors and shareholders will be fully respected in accordance with law, Yi said. The law has clearly said the seniority of liabilities. Authorities will give the highest priority to the protection of consumers and homebuyers, while respecting the rights of creditors and shareholders, he said.

China s central bank had various steps to fend off financial risks, such as replenishing capital for small and midsize banks, Yi said.