The power shortages are breaking the backbone of China’s economy that is already reeling under immense pressure triggered by the slowest third-quarter growth. It highlights the concerns faced by policymakers. They are prepping for a faltering economy. However, things do not look to get better. They are trying to rein in the real estate genre.
The GDP had expanded to 4.9 per cent, which missed the forecast by a whisker. However, it disappointed investors. The lending curbs attempted by Beijing for the property sector, bludgeoned the fallout caused by a power outage. It sent the factory outputs to reach the levels of COVID-19 peak during 2020.
Meanwhile, despite showcasing a record-breaking rebound from the pandemic’s slump, China’s situation does not seem good. The recovery is not working even after burning the night’s lamp. The economy is losing the stream after clocking a fiery 18.3 per cent increase in the first quarter. It is unable to stage the same similar charisma.
As per experts, the current government powered by President Xi Ping has led to the distortion of the economy. The major structural changes and crackdowns on giant property, technology hubs and carbon emission cuts have not helped the country. On the contrary, it has taken a major toll.
The fourth-quarter forecast was reduced heavily by analysts at Barclays. They declined it to 3.5 per cent, cutting it down by 1.2 per cent. The ANZ analysts also sliced China’s GDP growth to 8 per cent from earlier’s 8.3 per cent. So, investors are also in two moods.
The policymakers will have to deploy their acumen for balancing the impact caused by structural changes, said an analyst. Taming the contagion risk is one of the challenging task in their hands currently.
The weak prospects of the economy have sent shocks to the yuan and stock markets in Asia. On the other hand, the world is also suffering the quick economic recovery following the issue.