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Homemade Internal Problems Are Slowing Down China's Economy

From Peter Königsreuther | Translated by AI 1 min Reading Time

According to analyses, China's economic growth has slowed when looking at the third quarter. This is attributed to ongoing problems within the country itself ...

China's central committee will deliberate in the coming days on the next steps regarding economic development and strategy. This takes place against the backdrop of resolving or circumventing internal problems and the dispute with the USA ...(Image: B. Chuong)
China's central committee will deliberate in the coming days on the next steps regarding economic development and strategy. This takes place against the backdrop of resolving or circumventing internal problems and the dispute with the USA ...
(Image: B. Chuong)

Economic growth in China slowed further in the third quarter with an increase of 4.8 percent, according to data from the statistics bureau of the world's second-largest economy. In the first two quarters, China's gross domestic product (GDP) had grown by 5.4 percent and 5.2 percent, respectively. Experts previously surveyed by Bloomberg had, however, anticipated an even greater slowdown in economic growth to 4.7 percent. Economists attribute the waning momentum primarily to domestic problems, such as the long-standing real estate crisis and rather subdued consumer spending. Exports, therefore, remain an important pillar. However, the trade dispute with Washington is also weighing on sentiment in this regard. Nevertheless, China has evidently defied all adversities so far and continues to grow.

China's Next Five-Year Plan is Approaching ...

However, experts also point out that China's growth is largely supported by state-funded investments. Notably, despite a still relatively high growth rate, prices are falling. This deflation is seen as a sign of consumer restraint and overcapacity in the industry. For the full year, China has set a growth target of around five percent. The new growth figures were also published on the same day that the Communist Party's Central Committee traditionally meets in Beijing. At the so-called Fourth Plenum, economic guidelines for the coming years are to be established by Thursday. These will ultimately culminate in a new Five-Year Plan, which is expected to be adopted at the National People's Congress in March 2026. An expert estimate suggests that China is likely to once again focus on economic and technological self-sufficiency along with its leadership aspirations on the global stage.

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