BEIJING – China’s economy decelerated in the latest quarter but stronger spending by consumers who are emerging as an important pillar of growth helped to avert a deeper downturn.
The world’s second-largest economy grew by 6.9 percent in the three months ended in September, the slowest since early 2009 in the aftermath of the global financial crisis, data showed Monday. That was down from the previous quarter’s 7 percent.
China’s economic prospects are being scrutinized around the world. Its slowdown has unnerved global financial markets and held down growth in countries such as Brazil and Australia that export raw materials to China.
Last month, the Federal Reserve mentioned China’s slowdown and deteriorating global economic conditions when it delayed a long-anticipated increase in short-term American interest rates. The central bank’s main concern, however, was low U.S. inflation which suggests underlying weakness in the world’s No. 1 economy.
Weakening trade and manufacturing have fueled concern in China about possible job losses and unrest. The communist government has cut interest rates five times since last November in an effort to shore up growth.
The latest data highlight the two-speed nature of China’s economy in the midst of a marathon effort by the Communist Party to nurture self-sustaining growth based on domestic consumption and reduce reliance on trade and investment. Manufacturers are shrinking and shedding millions of jobs while consumer-oriented businesses expand.
In September, growth in factory output slowed to 5.7 percent from August’s 6.1 percent. At the same time, retail sales growth rose to 10.9 percent from July’s 10.5 percent. E-commerce spending leaped ahead, rising 36 percent in the third quarter over a year earlier.
“Continued downward pressures from real estate and exports caused GDP growth to drop,” said Louis Kuijs of Oxford Economics in a report. “But robust consumption and infrastructure prevented a sharper slowdown.”
The decline in Chinese heavy industry and construction has depressed demand for oil, iron ore and other commodities, dragging on growth in Australia, Brazil and other supplier countries.
At the same time, rising Chinese incomes are propelling demand for European wines, wheat and fresh fruit from Australia and the United States, medical technology and other imports.
Private sector forecasters have cut their outlook for China’s growth this year to between 6.5 and 7 percent. That still would be the second-strongest of any major country, surpassed only by India, where the International Monetary Fund expects 7.5 percent. It would be more than double the 3.1 percent growth forecast by the IMF for the United States.
