Will China's Falling Economic Growth Affect the World Economy?
(Continued from Prior Part)
China growth rate increases at 6.9% annually in the third quarter of 2015
According to the National Bureau of Statistics of China, the gross domestic product (or GDP) of China in the first three quarters of this year was 49,000 billion yuan, a year-over-year increase of 6.9%.
The value of the primary industry stood at 3,919.5 billion yuan, up by 3.8% annually. The value of the secondary industry was 20,000 billion yuan, up by 6.0%. The value of the tertiary industry was 25,000 billion yuan, up by 8.4%.
Third-quarter GDP rose by 1.8% on a quarter-over-quarter basis. This slow growth was due to a slowdown in industrial commodities and falling export orders. The iShares China Large-Cap ETF (FXI) has fallen 4.5% year-to-date as of October 16, 2015.
Fixed investment growth stood at 10.3% in first three quarters of 2015
In the first three quarters of 2015, investment in fixed assets grew by 10.3% in September, or 0.6% age points lower than in August 2015. Investments in real estate stood at 2.6%, 2.0% lower than recorded in the first half of 2015. With falling export demand and a sluggish growth outlook, businesses are cautious about capital spending.
Industrial production in China increased by 5.7% in September 2015, 0.4% lower than in August 2015. In terms of different products, the outputs of pig iron and cement fell by 0.6% and 2.5%, respectively, year-over-year. Automobile and car outputs fell steeply, by 4.7% and 21.6%, respectively. Electricity fell by 3.1%.
China Unicom (Hong Kong) (CHU), China Ming Yang Wind Power Group (MY), and China Petroleum & Chemical (SNP) lost 6.5%, 10.6%, and 13.4%, respectively, over the past year as of October 16, 2015. China Mobile (CHL) gained 3.1% over the same period.
To boost internal demand, the People’s Bank of China cut interest rates to 4.6% in August 2015. The bank has also devalued the yuan in order to gain competitiveness in the international market. Whether these measures can boost growth in the economy and achieve a target GDP growth rate of 7.0% for 2015 remains to be seen.
You may be interested to read German Industrial Production Failed to Regain Strength in August.
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