The gross domestic product of the world’s most populous country increased more than expected in the third quarter of this year. The economy grew at a rate of just under four per cent. However, the Chinese economy faces many challenges in the future.
Third quarter significantly better than the second
The Chinese economy posted much faster gross domestic product growth in the July-September period than in the second quarter. China’s GDP grew by 3.9 per cent year-on-year in the third quarter, compared with growth of just 0.4 per cent in the second quarter. Year-on-year growth was even half a percentage point higher than a Reuters poll of analysts suggested.
Strict anti-poverty measures
Growth in the Chinese economy was driven largely by domestic demand, which was dampened by strict anti-poverty measures in the previous quarter. However, it is the coronavirus epidemic that poses the greatest risk to economic growth in the period ahead. Moreover, as China’s export growth has slowed.
“There is no chance yet that China will back off its zero-covid policy, even in the coming year,” Julian Evans-Pitchard, an economic analyst at Capital Economics who focuses on the Chinese market, told Reuters. He said there was a risk that a possible return of the epidemic would send the Chinese economy back towards stagnation.
