Energy crunch powers growth slowdown in 'unstable' China recovery

Power shortages and supply chain difficulties are being widely blamed for a slowdown in China’s economic recovery from the coronavirus pandemic.

Official figures from the country’s National Bureau of Statistics (NBS) showed the world’s second-largest economy grew by 4.9% in July-September from a year earlier.

Economists polled by the Reuters news agency had expected a figure around 5.2%.

That was despite widespread pressures from several challenges including the Evergrande Group debt crisis which has rattled confidence in the country’s sprawling property sector and forced the authorities to deploy measures to bolster market confidence.

The power crunch, which is adding to the supply chain difficulties, has seen swathes of blackouts through the rationing of electricity and prompted demands for domestic coal production to be ramped up to help meet demand.

Summer floods also had an impact on the manufacturing powerhouse, experts suggested.

The figures released by the NSB showed factory output was at its weakest since early 2020, when heavy COVID-19 curbs were in place, during the third quarter.

NSB spokesperson Fu Linghui told a briefing in Beijing: “The domestic economic recovery is still unstable and uneven.”

Economists said that at an annual rate of 4.9%, China’s overall growth rate was at its weakest level for a year.

An annual rate of 18.3% was recorded during the first quarter of the year.

But Mr Fu insisted there were signs the power issue was improving as coal supplies improved.

“With these measures being implemented, the tight supply of coal and electricity has been eased, and the impact on economy will subside,” he told reporters.