China’s GDP Growth Misses Forecasts

The country is currently experiencing a real estate downturn, and Beijing has pushed to increase manufacturing as part of a plan to counter this. However, with people less willing to spend, companies have cut their prices.

Record Trade Surplus

China has also boosted its exports rather than its imports, resulting in a record trade surplus. While this is good news for China’s hopes of boosting growth, as demand abroad is currently stronger, which means factories can keep working, it has also triggered higher tariffs from countries trying to protect their own markets from a flood of Chinese goods.

After an initial spike in growth in Q1 and Q2 of 2021 – calculated against the pandemic quarters of 2020 and sky-high for that reason – Q3 of 2021 brought things back down to earth: Using Q3 of 2020 as a reference, when the pandemic was effectively over in China, GDP growth had begun to normalize.

Before the COVID crisis, the Chinese economy stabilized at an annual GDP growth of around 6 percent, following a gradual slowdown from more than 10 percent growth in the first decade of the 21st century. The latest figures are still considerably below this level.

The news comes as government leaders meet in Beijing on Monday for the third plenum, held every five years, to discuss an economic plan. Observers are waiting to see if further stimulus measures will be announced.