BEIJING: Steel mills have faced power cuts. Computer chip shortages have slowed car production. Troubled property companies have bought less construction material. Floods have disrupted trade in north-central China.
All this has taken a toll on China’s economy, which is an essential engine for global growth.
The National Bureau of Statistics announced on Monday that China’s economy grew by 4.9 percent in the third quarter compared to the same period last year; This period was much slower than the country’s growth of 7.9 per cent in the previous quarter. Industrial production, China’s mainstay of growth, faltered badly, especially in September, posting its worst performance since the early days of the pandemic.
Two bright spots kept the economy from stalling. Exports remained strong. And families, especially the affluent, resumed spending money on restaurant food and other services in September, as China once again managed to quell small outbreaks of the coronavirus. Retail sales in September were up 4.4 percent from a year earlier.
Chinese officials are showing signs of concern, although they have so far refrained from offering a major economic stimulus. However, their own efforts are part of the current economic challenges.
“Although the government’s economic policies during the past months have had some social benefits, they have also cut economic growth somewhat recently,” said George Yu, an economist at Renmin University in Beijing.
In recent months, the government has taken a number of measures to address income inequality and tame businesses, with the goal of protecting the health of the economy. But even those efforts, including penalizing tech companies and discouraging real estate speculation, have had an impact on growth in the current quarter.
The government also imposed limits on energy use as part of a wider response to climate change concerns. Now, power shortages are hurting industry, and the country is rushing to burn more coal.
“The economy is sluggish,” said Yang Qingjun, the owner of a corner grocery store in an old industrial neighborhood of shoe factories in Dongguan, near Hong Kong. Power cuts have prompted nearby factories to reduce operations and eliminate overtime pay. Local workers are leading more frugal lives.
“It’s hard to make money,” said Mr. Yang.
Lee you Contributed to research.