China economic growth slowest since global financial crash

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SHANGHAI, Oct 19 ― Stocks in Asia fell today as global sentiment soured on issues ranging from trade worries, Italy's 2019 budget, higher U.S. interest rates and growth concerns in China that led to a slump in Chinese shares in the previous session.

Investment in fixed assets, which includes spending on property construction and infrastructure, rose 5.4 percent in the nine months of this year, 0.6 percentage point lower than the first six months. Beijing responded with its own tariff hikes on $110 billion of American imports but is running out of goods for retaliation due to their lopsided trade balance. While the economy remains on track to meet Beijing's full-year growth target of about 6.5%, the third-quarter performance showed more signs of weakness-a scaleback of industrial production, slowing retail sales, anemic big-ticket investments and rising corporate defaults.

Importantly, second quarter sequential growth was revised down from the previously reported 1.8 percent, suggesting the economy carried over less momentum into the second half than many analysts had expected, the report noted.

The Shanghai Composite Index closed up 2.58 percent after sinking to a 47-month low yesterday, while the Shenzhen Component Index bounced up 2.79 percent from a 53-month nadir. "The structure and the productivity of the economy have continued to improve".

"The Sino-US economic and trade frictions have also impacted the stock market, but frankly speaking, the psychological effect is bigger than the actual impact", said Liu. At the time, Washington urged Japan to reduce its reliance on exports and shift the economy to one that runs on domestic demand.

So far Xi Jinping's government appears to be taking a middle road, voicing support for the market while stopping short of large-scale intervention.

Beijing tightened controls on lending a year ago to rein in a debt boom.

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Zhang Gang, a strategist at Central China Securities, said investors had been awaiting strong signals from the government but that more than words was needed. But leaders reject pressure to scrap plans such as "Made in China 2025", which calls for state-led creation of Chinese champions in robotics and other technologies, which Beijing sees as the path to prosperity and global influence. It also warns "further downside risk" on trade in the fourth quarter as tariffs finalize.

US President Donald Trump has shown no inclination of talks with China and even threatened tariffs on the remaining Chinese goods worth $267 billion. The People's Bank of China (PBOC) lowered its daily fixing rate, around which the yuan is allowed to trade by 0.25 percent.

The foreign trade had been in the third quarter of the year as quite robust - among other things because export wanted your come to the special duties of the United States before.

Faced with increasing headwinds to growth, policymakers are expected to step up stimulus in coming months.

The US is also withdrawing from the Universal Postal Union, a 144-year old treaty that helps set worldwide postal rates, over concerns that the treaty unfairly advantages Chinese exporters.

"In general, the impact is limited", said a ministry spokesman, Gao Feng.