The release of China’s third-quarter forecast for economic growth Monday comes at a critical time in the world’s second-largest economy.
The head of the National Bureau of Statistics on household goods and other indicators will affect two economic sources: the debt crisis in Evergrande, one of China’s leading retailers, as well as power shortages and spread.
President Xi Jinping’s administration has done nothing to address the challenges facing the business sector in the country, despite its 30% economy.
Beijing has instead taken what it believes to be “window of opportunity“Punishment for more and more people, which threatens China’s economy.
Eswar Prasad, a former IMF mission leader in China who is now at Cornell University, said: “Emphasis on utilization, access to inventory and energy efficiency must have contributed to China’s rapid growth.”
He also said that Xi and Liu He, deputy prime minister and trustworthy finance adviser, “seem willing to accept a short-term decline as a cost-effective investment”.
Here are five things to keep in mind when you are released next week:
Does China’s economy represent only one quarter?
China’s economy grew 12.7% in the first half of the year compared to the same period last year, while The Covid-19 epidemic broke out in the central region of Hubei is a major disruption to economic activity across the country.
This big jump, however, covered quarter-by-quarter growth of only 0.4% in the first three months of the year and 1.3% in the second quarter.
Researchers at Goldman Sachs predict that the third-largest economy will never grow for a quarter. In a report on September 28, he said there was also “uncertainty” on China’s four-dimensional stance due to “a state-of-the-art approach to Evergrande’s crisis, tightening environmental protection and a plethora of mitigation measures”.
What are the consequences of Evergrande’s sale of fixed assets in September?
Evergrande warned on Sept. 13 that monthly sales were in full swing about half in August compared to June and predicting some black results in September, which is usually the best month in the group.
Big growth, sales in 30 major cities in the country fell by almost a third in September last year. This indicates that September was the weakest month of steady income-generating activity, followed by logistics and construction. Stable economic growth has already slowed from 12.6% year-on-year in the first year to 8.9% in January to August.
Economic growth in construction also contributes slowly to the second phase of Xi, which began in 2018, more than it was in its first season (2013-17), highlighting the concerns of its supervisors on public finance vehicles, which in turn a lot of money on construction.
How has the lack of electricity affected electricity services?
Industrial growth is slowing – only 5.3% year-on-year increase in August compared to 8.3% in June – before China’s economic crisis, like Evergrande, surprised everyone from industrialists to economists in September.
The main reasons for the lack of electricity it varies from place to place. There is also a shortage of coal and a rise in coal prices, which have forced crops to reduce production, as well as environmental problems and energy shortages.
Larry Hu, a Chinese economist at Macquarie, said the country’s finance ministry had taken action to reduce coal shortages but did not indicate “a plan to change power this year”. As a result, it was predicted that each power distribution would extend to the fourth quarter.
Will sales turn up?
Gross sales grew only 2.5% year-on-year in August, compared to 8.5% in July and a slight decline in market share of 7%.
If this trend continues, Chinese manufacturers will find it very difficult to restart the economy, which is struggling with inflation and industrial growth. In a recent financial statement, Diana Choyleva of Enodo Economics predicted that “a lot of pain is saved when Xi goes to the bottom of raising house prices to address the root cause of inequality”.
Will this crisis force Xi and his financial team to cut ties in the fourth quarter?
Prasad warned that “what the government is doing to improve its economic performance and misunderstanding of its intentions in the business sector can be tempting in the long run.”
But from the Xi war on the Chinese movement technical teams earlier this year his willingness to run Evergrande and other leading finishers at the end of the loan, showed no signs of overcoming his campaign to reform China economic type. Monday’s release could be the first test of these aspirations.