BEIJING (Dispatches) - China’s economy grew 4.9% in the July to September quarter from a year earlier, the slowest pace in a year and worse than analysts had predicted.
This was far slower from the previous quarter when growth was almost 8%, suggesting the recovery is weakening.
Power shortages, outbreaks of Covid-19 and pressure from Beijing on a number of industries are taking their toll.
These developments may dampen growth for the rest of the year and should not be underestimated, one expert said.
The world’s second-largest economy has faced a number of challenges in recent months.
Firstly, when it has come to power supply, soaring global commodity prices have affected the cost of raw materials.
This has come at the same time as Beijing has increased the pressure on regional governments to reduce their carbon emissions in line with the country’s goal to be carbon neutral by 2060.
Many provinces implemented electricity rations, causing blackouts for homes and factories to close.
This coincided with the country’s largest coal producing province suffering from torrential flooding. The Shanxi region produces about 30% of China’s coal.
The heavy rains have led the coal price to hit fresh highs and the government to abandon production caps.
The power cuts have disrupted many industries in the country, particularly those that use a large amount of energy, including cement production, steel and aluminium smelting.
China’s “factory gate” prices - a measure of what manufacturers charge wholesalers for products - have felt these effects, growing at the fastest rate since records began 25 years ago.
“The downturn in industry looks set to deepen,” said Capital Economics’ senior China economist Julian Evans-Pritchard, with thermal coal prices still climbing.