Authorities have since last month unveiled a raft of measures to kickstart sluggish consumption and address a prolonged and debilitating debt crisis in the country's colossal property sector.
After a blistering market rally fuelled by hopes for a long-awaited "bazooka stimulus", optimism has tapered as authorities refrained from providing a specific figure for the bailout or detailing any of the pledges.
On Friday, Beijing's National Bureau of Statistics (NBS) said the economy expanded 4.6 percent year on year in the third quarter, down from 4.7 in the previous three months and the slowest since early 2023, when China was emerging from its strict zero-Covid policy.
The NBS acknowledged a "complicated and severe external environment... as well as new problems of domestic economic development".
Still, figures showing a forecast-beating rise in September retail sales -- a gauge of consumer activity -- provided a ray of light after a string of below-par readings on a range of indicators including inflation, investment and trade.
And ahead of the data, state media said the country's top banks had cut interest rates on yuan deposits for the second time this year as part of a move to boost lending.
Beijing has said it has "full confidence" in achieving its annual growth goal of five percent, but economists say more direct fiscal stimulus is needed to revive activity and restore business confidence.
Recent weeks have seen authorities unveil a raft of measures to funnel cash into the economy including a string of rate cuts and loosened restrictions on home-buying.
China's central bank on Friday launched one such measure -- a swap facility for funds and insurers with an "initial application quota exceeding 200 billion yuan" ($28.1 billion), state media said.
The mechanism implemented by the People's Bank of China (PBoC) will provide greater liquidity for capital markets, which policymakers hope will offer support for the wider economy.
And in a possible sign of more relief to come, PBoC chief Pan Gongsheng said Friday that officials were considering a further cut to the amount commercial lenders must hold in reserve before the end of the year.
- 'Still unclear' -
The recent raft of announcements -- which included a hint at raising the government debt ceiling and measures to support indebted local governments -- are a move "in the right direction", said Benson Wu, China and Korea economist at Bank of America Global Research.
"That said, the size and the form of fiscal supports are still unclear," Wu told AFP.
"More still needs to be clarified before we can have a thorough assessment on the effectiveness of the policies."
One major headache facing the economy has been a prolonged crisis in the property sector, which has long been a key driver of growth but is now mired in a sea of debt.
Prices of new homes in September only increased on an annual basis in two out of 70 large and medium-sized cities surveyed by statistics authorities.
Meanwhile, China's official urban unemployment rate ticked down to 5.1 percent last month, NBS data showed, from 5.3 percent in August.
On Thursday, officials said they would boost credit available for unfinished housing projects to more than $500 billion, a move intended to boost activity in the property sector.
But as with a stream of much-touted briefings in the past week, the news conference failed to impress with its lack of big-ticket financial pledges.
The latest GDP figures mean Beijing's goal of a five percent expansion in 2024 will be "difficult to achieve if this trend continues to year end", said Zhang Zhiwei, President and Chief Economist at Pinpoint Asset Management.
"We are waiting on more clarity on the fiscal stimulus," said Zhang in a note.
"We may have to wait till November to find out details, as the outcome of the US election is probably one factor that influences the policy thinking in Beijing," he added.
China to almost double support for unfinished housing projects
Beijing (AFP) Oct 17, 2024 -
China said Thursday it would boost credit available for unfinished housing projects to more than $500 billion as it unveiled another round of measures to shore up the sector and try to reignite the economy.
The real-estate sector has long accounted for around a quarter of gross domestic product and experienced dazzling growth for two decades but a years-long housing slump has battered growth as authorities eye a target of around five percent for 2024.
At a briefing, housing minister Ni Hong offered fresh help, saying Beijing will "increase the credit scale of white-list projects to four trillion" yuan ($562 billion) by the end of the year, up from more than two trillion.
The "white list" scheme, announced earlier this year, pushes local authorities to recommend housing projects for financial support and work with banks to ensure their completion.
"The urban real-estate financing coordination mechanism should strive to include all eligible real-estate projects in the white-list," Ni said.
"An additional one million worn-out homes... will be renovated," he added. "There are many safety hazards and poor living environments in urban villages, and people are eager to renovate."
The move, he said, would "be conducive to absorbing the existing stock of commercial housing".
China's leadership last month warned the economy was being plagued by "new problems" as officials unveiled a raft of stimulus in one of the biggest drives to boost growth for years.
Among the measures were a string of interest rate cuts, the loosening of restrictions on home-buying and moves to free up cash for banks to lend more.
- 'Half-baked measures' -
On Thursday, Beijing said it estimated that "existing mortgage rates will fall by an average of about 0.5 percentage points" under those cuts.
That, central bank deputy governor Tao Ling said, would "save 150 billion yuan in interest expenditure overall, benefitting 50 million families and 150 million residents".
A blistering market rally fuelled by hopes of major stimulus has faltered as authorities refrained from providing a specific figure or fleshing out any of the plans.
A number of major cities have also in recent months eased house-buying restrictions -- most recently this week in Chengdu, the capital of southwestern province of Sichuan, and the northern port city of Tianjin.
The latest announcement comes as China prepares to release third-quarter growth data Friday, which is forecast to be the slowest this year.
Hong Kong shed one percent and Shanghai a little more than that, having started the day on a strong note, with property stocks -- which had rocketed in the wake of the initial round of measures -- tumbling.
"They're still trying to talk the talk, with more noise about stabilising the property market," Stephen Innes, Managing Partner at SPI Asset Management, said in a note.
"As the briefing rolled on, it was clear: traders were not thrilled," he said.
"Let's be honest, though -- China's property mess isn't something that can be patched up with a few speeches and half-baked measures," Innes added.
One analyst told AFP he thought the new credit "should cover most of the construction expenses of outstanding projects that are either unfinished or yet-to-be started".
But, Heron Lim of Moody's Analytics said, "these policies for housing are stabilisation policies, not growth policies".
"Hence, while we think the bottom should be reached soon, we do not see China housing prices making any big recovery in the next two years," he said.
Analysts surveyed by AFP predict 4.9 percent overall growth in 2024 -- even worse than last year, which was the weakest in decades outside of Covid.
Still, Beijing has said it is "fully confident" it will reach its five percent goal.
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