Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China GDP Slows On Power Shortages And Supply Chain Woes

By Fullerton MarketsForexOct 18, 2021 09:29AM ET
www.investing.com/analysis/china-gdp-slows-on-power-shortages-and-supply-chain-woes-200605394
China GDP Slows On Power Shortages And Supply Chain Woes
By Fullerton Markets   |  Oct 18, 2021 09:29AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

China's third-quarter GDP fell dramatically to 4.9%, down from 7.9% the previous quarter. The slower-than-expected GDP growth is due to a variety of factors, including policymakers' decision to reduce stimulus enacted in the immediate aftermath of the pandemic last year; a crackdown on the technology, private education, and real-estate sectors; energy snafus caused in part by soaring coal prices and more aggressive energy targets; and supply chain disruptions caused by Covid-19 outbreaks, semiconductor shortages, and port shutdowns.
 
Despite the steep downturn in the third quarter, China's policymakers appear to be reasonably upbeat about the economy's challenges. On Friday, Chinese central bank officials indicated that the country will not use large-scale stimulus to boost GDP in the fourth quarter, such as flooding the banking system with liquidity or lowering benchmark interest rates.
 
Officials also downplayed the risks posed by the debt crisis of Evergrande (OTC:EGRNY), China’s most indebted property firm. The news has shaken global markets and prompted concerns about China's general economic and financial health.
 
The October’s Purchasing Manager Surveys from key economies in Asia, Europe, and North America will be keenly monitored this Friday for signs that supply constraints and soaring energy prices are impacting manufacturers. Meanwhile, service-sector activities may expand at a slower pace than in September, due to customer concerns about inflation and product shortages.
 
Inflationary pressures that persist for several years might have a variety of effects on the economy. Consumers' household budgets may be strained, while increased borrowing costs may impact stock prices and hinder interest-sensitive industries such as real estate.
 
However, even though the study predicts greater inflation and slower growth this year than a few months ago, it also predicts optimism for the next few years. Respondents raised their growth estimates, to 3.6% in 2022 and 2.5% in 2023, based on the change in inflation-adjusted GDP in the fourth quarter from the previous year.
 
To keep inflation under control, the Federal Reserve will most likely hike interest rates to slow the economy which will increase the dangers of a slump. Nearly three-quarters of economists polled expect the Fed to raise interest rates by the end of next year, with 16% expecting the first hike by the Fed's June meeting.
 
Until the end of the year, we expect the dollar to continue its raging uptrend, especially for USD/JPY. Commodities currencies, such as AUD and CAD, will also continue to outperform as the rise in inflation will lead to a more expensive commodities price as well.

China GDP Slows On Power Shortages And Supply Chain Woes
 

Related Articles

China GDP Slows On Power Shortages And Supply Chain Woes

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email