The data from the national bureau of statistics of China suggests that China's economy has suffered from a slew of challenges over the last few months.
The country is in the middle of an energy crunch which is impacting factory output and leading to power cuts in some areas. That problem has been driven by demand for construction projects that require fossil fuel and are at odds with Beijing's ambition to reduce carbon emissions earlier this year. Some factories have reduced shifts due to power rationing. Coal prices are at record highs.
The massive inventories and shipping delays have also hit smaller manufacturers in China that are now hurting for cash and forcing them to either reduce production or lose orders.
A debt crisis in embattled Chinese conglomerate Evergrande has also triggered fears about contagion risks to the giant property sector and the broader economy. Property accounts for as much as 30% of the national economy along with related industries. A collapse of Evergrande could scare away investors and buyers at a time when property sales and construction activity are already slowing. A potential wave of default by developers could have a significant impact on economic growth and pose risks to financial stability. Authorities have also sought to dispel fears about those problems affecting the economy. The People's Bank of China said Friday that Evergrande had mismanaged its business, but risks to the financial system were controllable. The government on Monday used similar language to temper concerns about the energy crunch. Fu Linghui, spokesperson for the National Bureau of Statistics, said that the tight supply of energy is just a phase and the impact on the economy is controllable. Fu also pointed out that global energy prices have risen since the beginning of the year and warned that supply of power and coal in China has been tight. Still, he said that the crunch would be alleviated as the government implemented measures to bring the problem under control. Earlier this month, China ordered the production of coal mines to ramp up production. Beijing is still on track to meet an annual growth target of over 6% set by China. For the first three quarters of 2021, GDP grew 9.8% from one year ago when Covid - 19 Pandemic took its biggest toll. They are still warning of concerns ahead. Fu noted that the economic recovery is still uneven and unstable. He added that the challenges of maintaining the economy running smoothly have increased.