China’s economic growth slowed to 4.9 percent in the third quarter, official data showed Wednesday, as an unprecedented property crisis hit consumption and business activity in the country.
The figure exceeded analysts’ predictions that the world’s second-largest economy would grow 4.5 percent on-year in July-September but was well off the 6.3 percent expansion enjoyed in the previous three months.
The country faced a “grave and complex international environment and challenging tasks in promoting reform, development and stability at home” in the first three quarters of 2023, the National Bureau of Statistics said.
The real estate sector, which has long accounted for a quarter of the country’s gross domestic product, supports thousands of companies and is a major source of employment.
The industry enjoyed dazzling growth for decades, but the recent woes of key developers including Evergrande and Country Garden are now fuelling buyer mistrust while homes lie unfinished and prices plummet.
Country Garden, one of China’s biggest property firms and long believed to be financially sound, failed last month to repay interest on a loan totalling $15.4 million.
The group has been granted a 30-day grace period which ends on Wednesday, and risks default if it does not honour the repayment.
Authorities have stepped up incentives for property purchases in recent months to reinvigorate the sector, but buyers remain cautious.
Households are watching their spending amid sluggish growth, which in turn has hurt consumption.
A week-long national holiday in October has nevertheless helped boost spending on tourism and other services.
“China’s economy has shown signs of stabilisation,” Nomura analyst Ting Lu said in a note.
Retail sales, the main indicator of household consumption, rose a forecast-beating 5.5 percent on-year in September, according to official figures published on Wednesday by the NBS.
