SHANGHAI: China’s economic growth has fallen for the third successive quarter under the impact of the global financial crisis. The National Bureau of Statistics (NBS) said on Monday the economy registered 9 per cent growth in the three months leading up to September, down from 10.1 per cent in the second quarter, and 10.6 per cent in the first quarter of the year.
The announcement has raised concern whether China has been worse-hit by the global financial crisis than previously thought. While most analysts had expected a fall in growth, predictions preceding Monday’s announcement estimated third-quarter growth to be in the range of 9.5-9.8 per cent.
“There are no signs of a definite recovery from the financial crisis,” said Li Xiaochao, an NBS spokesman, at a news conference. “The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate. All these factors have started to release their negative impact on China’s economy,” he said.
Mr. Li, however, added that falling inflation rates gave some reason for Chinese consumers to remain cheerful.
The Consumer Price Index fell from 4.9 per cent in August to 4.6 per cent in September. “The economy managed,” he noted, “to maintain a steady and relatively fast growth even while facing an eventful period full of uncertainties. The government has put preserving growth as the top priority and will stick to a flexible and prudent policy stance in the future.”
Part of the reason for the slowdown is a sharp decrease in exports. China’s exports fell for the first time in three years, by 5.7 per cent in the first half of the year, with falling demand from the U.S. and Europe. In recent weeks, reports of factory closures from China’s manufacturing heartland in the south have dominated local news. Last week, more than 7,000 workers were laid off when one of the country’s largest toy manufacturers, Smart Union, closed its factory in Dongguan. In 2008 alone, 3,631 toy exporters went out of business — that is half of all enterprises in the toy industry.
In the face of falling demand from overseas, the government is seemingly focusing its attention on stimulating growth from within. The government has outlined a land-use reform that would give farmers greater land-use rights. While landholdings are currently state-owned and leased to farmers, the new policy would, for the first time, allow farmers to transfer or lease their land rights. Analysts expect the land reform to substantially stimulate the rural economy, improving rural incomes and increasing consumer demand.