no doubt that the downturn is serious,” commented Vishnu Varathan, head of economics ad strategy for the Asia and Oceania Treasury Department at Mizuho Bank.
Other analysts, like Julian Evans-Pritchard, senior China economist at Capital Economics, expect the situation to get even worse.
“Despite a stronger September, pressure on economic activity should intensify in the coming months,” he said.
“Cooling global demand will continue to weigh on exports, fiscal constraints mean that infrastructure spending will wane in the near-term, and the recent boom in property construction looks set to unwind.”
Bo Zhuang, TS Lombard’s chief China economist, agrees. He believes that, based on the newly released data, 5.8% growth is likely in Q4, dragging down the country’s full-year target to 6.1%.
“Given the trade talks and the conflict with the U.S., Chinese authorities are accepting lower growth rate,” said Zhuang.
To investors, that’s apparently cause for concern. Stocks traded “flat” in the pre-market hours after China revealed their disappointing GDP numbers. In fact, it was the weakest quarterly growth reported by China (the world’s second-largest economy) in nearly three decades.
And while economists will continue to see that as a global slowdown precursor, there’s another side to it entirely:
China’s GDP woes could be proof that the trade war is working
