China’s housing slump, energy shortages and spreading defaults among its property developers dragged down economic growth in the third quarter. As shown below, gross domestic product rose 4.9% from a year earlier (National Bureau of Statistics), below consensus expectations and -3% from the officially reported 7.9% annualized rate in Q2.
As property woes spread, Chinese residents saved about 34% of their disposable income in the first nine months of 2021, up from an average of about 32% from 2017 to 2019.
So far, Beijing is not rushing to ‘stimulate,’ increasing the probability that growth will weaken further in the fourth quarter. China Beige Book analysts estimate that China’s economic growth rate could tumble to 1 to 2% over the next decade, significantly denting demand for global commodites.
See: China property and energy crisis deliver blow to GDP growth and this direct video link for further discussion.
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