SIMIC

China's GDP expanded by just 4.9 per cent in the third quarter, compared with the same period a year earlier. That's much slower than the 7.9 per cent increase China registered in the second quarter. It's also the weakest rate of growth since last year's July-to-September period, when GDP also grew 4.9 per cent, according to CNN Business.

"The challenges of keeping the economy running smoothly have increased," said Fu Linghui, spokesperson for China's National Bureau of Statistics, at a recent press conference in Beijing. He said the country's recovery from the Covid-19 pandemic is "still unstable and uneven."

The country is in the middle of an energy crunch that is denting factory output and leading to power cuts in some areas. That problem has been fuelled by demand earlier this year for construction projects that need fossil fuel and are at odds with Beijing's pursuit of ambitious targets to cut carbon emissions.

Shipping delays and mounting inventories have also hit smaller manufacturers in China that are now hurting for cash, resulting in lost orders and production cuts.

The real estate sector is also suffering from a government drive to curb excessive borrowing. Property investment is now falling. That's placing strain on developers, not least Evergrande, whose debt crisis has triggered worries about the risk of contagion for the sector and the broader economy. Some other property firms have already indicated that they are struggling to pay their debts.

The fallout from those headwinds was apparent all over the recent data. Industrial production ticked up a mere 3.1 per cent last month from a year ago, the lowest rate since March 2020, when the pandemic was slamming China's economy. Real estate-related activities - including cement and steel production - registered steep contractions.

Fixed-asset investment, meanwhile, appears to have declined in September, reversing a slight gain in August, according to estimates from Goldman Sachs.

"Official GDP growth slowed to a crawl last quarter," wrote Julian Evans-Pritchard, senior China economist at Capital Economics, in a research note, adding that "industry and construction appear on the cusp of a deeper downturn."