China’s GDP Growth Slows as Property and Energy Damage

BEIJING – Steel mills face off power cuts. Computer chip shortages slowed car production. Troubled real estate companies bought less building material. The floods disrupted trade in north-central China.

All of this has damaged the Chinese economy, which is an important engine for global growth.

China’s economy rose 4.9 percent in the third quarter compared to the same period last year, the National Bureau of Statistics said on Monday; The period was markedly slower than the 7.9 percent increase the country recorded in the previous quarter. Industrial production, the mainstay of China’s growth, declined particularly badly in September and recorded its worst performance since the early days of the pandemic.

Two bright spots prevented the economy from stalling. Exports remained strong. And families, especially the affluent, continued to spend money on restaurant meals and other services in September as China once again managed to quell small coronavirus outbreaks. Retail sales rose 4.4 percent in September from a year ago.

Chinese officials are showing signs of concern, although they have so far avoided providing any major economic stimulus. Yet his own efforts are part of the current economic challenges.

“While the government’s economic policies in recent months have had some social benefits, they have also slowed economic growth a bit lately,” said economist George Yu of Renmin University in Beijing.

In recent months, the government has released a series of measures to address income inequality and tame businesses, in part to protect the health of the economy. But these efforts, including penalizing tech companies and deterring real estate speculation, also weighed on growth in the current quarter.

The government has also placed limits on energy use as part of a broader response to climate change concerns. Now, blackouts are hurting the industry and the country is in a rush to burn more coal.

“The economy is stagnant,” said Yang Qingjun, owner of a shoe factory corner grocery store in an aging industrial area in Dongguan, near Hong Kong. Power outages prompted nearby factories to cut operations and eliminate overtime pay. Local workers live more frugal.

“It’s hard to make money,” said Mr. Yang.

joyful contributed to research.