Second largest economy: China’s economy is growing more slowly – party discusses course

Economic growth in China slowed further in the third quarter with an increase of 4.8 percent. This emerges from data from the statistics office of the world’s second largest economy. In the first two quarters, the Chinese economy grew by 5.4 percent and 5.2 percent respectively.

The economy in China is losing momentum. Economists blame this primarily on ongoing domestic problems, such as the real estate crisis and subdued consumer sentiment. Exports remain an important source of support. But trade tensions with Washington are weighing on sentiment.

A spokesman for the statistics office said the economy had held its own in a difficult environment: it had “withstood the pressure and made hard-won progress”.

Important meeting begins in Beijing

Experts point out that the growth is being driven to a significant extent by state-financed investments. What is striking is that prices are falling despite a still relatively high growth rate. Such deflation is seen as a sign of consumer restraint and overcapacity in industry. China has set a growth target of around five percent for the year as a whole.

The new growth figures were released on the same day that the Communist Party’s Central Committee meets in Beijing. At the so-called fourth plenum, the economic guidelines for the coming years are to be determined by Thursday. These will ultimately result in a new five-year plan, which is to be approved at the People’s Congress in March.

Technological independence in focus

The current challenges indicate that the focus of the new roadmap will continue to be “on economic and technological independence and leadership,” according to an assessment by the China Institute Merics in Berlin.

Innovation and security of supply in strategic sectors are more important to the party leadership than measures to strengthen incomes and promote consumption. However, these are topics that are likely to play an important role in the planning.

Building new industries of the future

Beijing had already used the last two five-year plans to specifically advance strategic sectors. The leadership sees this strategy confirmed since Washington has taken increasingly aggressive action against China’s technology industry.

Now Beijing is likely to step up and decide on further steps to promote technological independence. As with electric cars and renewable energies, China could become a global market leader in other future industries.