Beijing: China's economy grew at 6.5 percent in the third quarter, posting slowest growth in nine years, amid intensifying trade war with the US and the mounting local governments debt which rose to $2.58 trillion.
The GDP expanded by 6.5 per cent in the July-to-September period year-on-year, according to official GDP figures released by China's National Bureau of Statistics (NBS) on Friday.
It's down from 6.8 per cent and 6.7 per cent in the first and second quarters, respectively.
The world's second largest economy's third quarter growth was the weakest year-on-year expansion since 2009 global financial crisis.
The latest figures came as China faced rising economic challenges including high debt levels and an intensifying tariff battle with Washington.
US President Donald Trump imposed additional tariffs on $250 billion worth of Chinese exports to force Beijing to cut about $375 billion bilateral trade deficit.
The NBS said the GDP expanded 6.7 per cent year-on-year in the first three quarters of 2018 to about 65.09 trillion yuan (about $9.38 trillion).
It said the pace was in line with market expectations and higher than the government's annual growth target of around 6.5 per cent.
The economy has expanded in a reasonable range and maintained a trend of overall stability and steady progress, China's statistical authority said, while acknowledging that the country faces more external challenges and rising downward pressure.
The service sector gained 7.7 per cent year-on-year in the January-September period, picking up from a 7.6-per cent increase in the first half, and outpacing 3.4 per cent in primary industry and 5.8 per cent in secondary industry.
Besides the trade war China's spiralling local government debt remained a major concern of its slowing down economy as it has risen to $2.58 trillion according to recent figures released by the Ministry of Finance here.
A BBC report on the state of China's economy said that Beijing was not expecting to fight a trade war at a time when it was trying to manage systemic risks in the economy.
They don't have a lot of options on the table. The country is saddled with extraordinary levels of debt so policymakers are reluctant to take measures to stimulate the economy the way they did after 2008, the report quoted observers as saying.
As the GDP figures pointing to further slowdown of the economy were released, top government officials stepped in to reassure the Chinese public about the state of economy amid the worst stock market performance.
Vice Premier Liu He, regarded as China's financial tsar, led a coordinated effort with the country's central bank and financial regulators on Friday to stem its worst stock market rout in three years, and extended a lifeline to businesses battered by a liquidity squeeze.
Chinese regulators have already sought measures to defuse risks related to shares used as collateral for loans, while the recent declines in the country's stock market have created a good buying opportunity, Liu a member of the politburo of the ruling Communist Party of China, told the People's Daily - the party mouthpiece.
"In terms of global asset allocation, China's stock market already has a pretty high investment value, with bubbles significantly contracting, the quality of listed companies improving and valuations at a historical low level. I believe that investors will make a rational judgment," Liu was quoted as saying by Hong Kong-based South China Morning Post.
Earlier on Friday, the People's Bank of China (PBOC) as well as the China Banking and Insurance Regulatory Commission (CBIRC) and the China Securities Regulatory Commission (CSRC) said they will ramp up support for private companies exposed to a liquidity squeeze caused by shares used as collateral for loans through easier lending.
Support from China's top leadership comes after the Shanghai Composite Index fell to a four-year low this week, with sell-offs accelerating on mounting concerns that pledged shares will face forced sales and, thus, exacerbate declines, the Post reported.
Shares worth 4.5 trillion yuan ($648.6 billion) in market value have been used as collateral for loans a way of accessing funds used particularly by smaller listed companies, according to Essence Securities data.
This roughly equates to 13 per cent of the combined market capitalisation of stocks on the Shanghai and Shenzhen exchanges. Unless loans are repaid or more collateral is added, the stocks can be liquidated by debtors, further weighing on already weak sentiment, the Post said.
Yi Gang, governor of the central bank, said Friday the PBOC will push for more debt and equity sales in the private sector to ease the funding crunch.
He also said the central bank will use various monetary tools, such as relending and medium-term lending facilities, to allow commercial lenders to advance more loans to private companies.
"The recent volatility in the stock market is mainly affected by investors' expectations and sentiment. In fact, China has good economic fundamentals, has made progress in preventing financial risks and has macro leverage ratio stability," he said.
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