China’s Third Quarter GDP Growth Records Lowest Since 2009 – Reuters poll

At week’s end, global investors and policy makers will likely be given a stark reminder of the costs of a bitter Sino-U.S. trade war, with a Reuters poll predicting that China’s third-quarter growth will slow to its weakest pace since the global financial crisis.

Domestic demand has been faltering in recent months as U.S. President Donald Trump’s campaign to force China to make sweeping changes to intellectual property, industrial subsidy and trade policies start to depress export earnings.

Beijing has been trying to ward off a sharper slowdown in the world’s second-largest economy by stepping up policy support and softening its stance on a de-risking campaign, as the full impact of higher U.S. trade tariffs has still to be felt.

And analysts said more support measures will be needed as risks to China’s growth outlook have increased since the second half of the year.

A poll of 68 economists showed gross domestic product likely grew 6.6 percent in July-September from a year earlier, slowing from the previous quarter’s 6.7 percent and hitting the weakest pace since the first quarter of 2009.

The predicted third-quarter growth would still be higher than the government’s full-year target of around 6.5 percent.

“The downward pressure on the economy is relatively big as consumption weakens and infrastructure investment has yet to stabilize” from a slowdown, said Tang Jianwei, senior economist at Bank of Communications in Shanghai.

“It’s necessary to make policy adjustments as the external pressure increases.”

Recent economic data have pointed to weakening domestic demand ranging from infrastructure investment to consumer spending, as a multi-year crackdown on riskier lending and debt has pushed up companies’ borrowing costs.

Growth in China’s vast factory sector in September stalled after 15 months of expansion, with export orders falling the most in more than two years, according to private survey showed. An official survey also confirmed that manufacturers were coming under stress.

There are signs that firms have ramped up shipments before broader and stiffer U.S. tariffs take effect, which likely explains an unexpected acceleration in China’s exports growth in September and a record trade surplus with the United States.