Faced with growth that is slowing, increasing debt and a trade war with the U.S., the economy in China is starting to feel the impact.
According to a report in the New York Times on Friday (October 19), the government in China said the economy grew 6.5 percent during the three months ending in September on a year-over-year basis. That, according to the New York Times, marks the slowest economic growth rate since the beginning part of 2009. In the past few years China’s economy was moving along, but the comments Friday signal a different story is going on in 2018. The paper noted consumers in China have been reining in their spending and lowering the amount they purchase by staying home and opting for beer instead of mixed drinks. What’s more, the paper reported that confidence on the part of businesses in China is also starting to wane as investments in infrastructure projects is declining.
In addition to all that, the New York Times noted that China’s stock market has declined by more than one-quarter since January’s peak and is one of the worst-performing stocks markets around the globe this year. Its currency is close to a ten-year low compared to the U.S. dollar and companies are having a hard time borrowing from lenders, with some even defaulting on loans.
As for the trade war with the U.S., the paper reported it has only had a marginal impact, with China noting that trade remains strong despite the fight on trade. Even with all the negative data, the government officials in China are trying to paint a picture that the economy was on the right track in the country. “We have no reason not to be confident in the bright prospects for China’s economic development,” Liu He, China’s economic czar, told the official Xinhua news agency, according to the report. Officials are trying to get new investments and spur the economy, announcing this week that the launch of 1,222 infrastructure projects valued at $362 billion will be financed via private companies, reported the New York Times.