China’s economy achieved its slowest growth rate in a year in the third quarter, plagued by power shortages, supply chain problems and severe real estate fluctuations. writes Reuters.
According to the publication, gross domestic product (GDP) grew by 4.9% in July-September compared to the same period a year earlier, which is the weakest figure since the third quarter of 2020.
The world’s second largest economy is facing major challenges, including the debt crisis of construction company China Evergrande Group, continued supply chain delays and critical power shortages that have plunged production capacity to their lowest level since early 2020, when they were severe restrictions have been introduced due to the coronavirus pandemic.
Weak performance led to a plunge in the yuan and widespread investor concern over the global economic recovery. The default of the largest construction group of companies in the world Evergrande effectively blocked other developers from entering the international bond market. Evergrande failed to pay $ 83.5 million in interest last month, shaking global markets. According to analysts, without the intervention of the authorities, the situation could worsen.
Meanwhile, the industrial sector has suffered from electricity rationing caused by coal shortages, floods and environmental restrictions on steel mills.
The total industrial production in September grew by only 3.1% compared with a year earlier. This is the slowest growth since March 2020, when the first wave of the pandemic rocked the country.