Energy, Shipping And Real Estate Crisis Wreaking Havoc On China’s Economy
- China's GDP is growing at the slowest pace of the year.
- A country experiencing an energy shortage.
- Property investment declining.
China: China’s economy grew by only 4.9 percent in the third quarter in comparison to the same quarter a year ago. A huge energy shortage and shipping problems have devastated the world’s second-largest economy. It is also the slowest rate of increase since July to September last year, sources report.
China was the only major economy that managed to avoid going into recession in 2014. However, it has faced a series of obstacles this year that are stifling its expansion. The country is experiencing an energy shortage, which is affecting manufacturing output and causing power outages.
Evergrande’s financial crisis has sparked concerns about the sector’s and economy’s potential for contagion. The real estate industry is also being harmed by the government’s efforts to reduce excessive borrowing. Property investment is now declining, putting developers in China under pressure.
Last month, industrial production increased by just 3.1 percent over the previous year, the lowest rate since March 2020, when the pandemic was wreaking havoc on China’s economy. Real estate-related activities, such as cement and steel production, saw sharp declines. Meanwhile, according to Goldman Sachs estimates, fixed-asset investment declined in September, reversing a slight gain in August.