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1. China's economy sank into a deeper funk in the third quarter, testing the leadership's resolve to rev up demand. Gross domestic product rose 4.6% on the year in the three months through September, the National Bureau of Statistics said Friday. That was down from the second quarter's 4.7% growth, marking the slowest pace since the first quarter of 2023, when the country was emerging from three years of strict COVID-19 restrictions. On a quarter-to-quarter basis, the economy grew 0.9%, versus a revised 0.5% the previous quarter. The figures come as authorities strain to reach an annual growth target of around 5%, set in March. President Xi Jinping called on officials to strive to reach the goal last month as fresh signs of economic weakness piled up. (Source: asia.nikkei.com)
2. China’s home prices fell by the most in nine years in September, extending a decline for the 16th consecutive month and underscoring the challenges to revive the sector despite a top government official saying that the market has started to “bottom out” following a slew of supportive measures. New home prices dropped 6.1 per cent across 70 mainland cities from a year earlier, the biggest decline since May 2015. The decline expanded from a 5.7 per cent slump in August, according to data from the National Bureau of Statistics (NBS) on Friday. (Source: scmp.com)
3. China should take unconventional action to prevent a worst-case scenario in which the economy could “fall off a cliff”, as there are signs of a fundamental shift in Beijing’s understanding of debt and deficits as well as in policymakers’ mindset on macroeconomic risks and stimulus packages, according to a prominent economist with close ties to the finance ministry. The comments by Liu Shangxi, head of the Chinese Academy of Fiscal Sciences, affiliated with the Ministry of Finance, came after the central leadership’s decision to implement a slew of incremental policy support measures, and amid fervent debate and speculation about the state of the economy and Beijing’s resolve in the absence of a headline-grabbing stimulus figure like what was seen in 2008. Asked what his estimate was for the combined value of the sweeping suite of stimulus measures – including debt relief for local-level governments, special treasury bonds and targeted actions to address the national property crisis – Liu said it “should absolutely surpass” 10 trillion yuan (US$1.4 trillion), but that it could be years before the total is fully realized. “If you don’t take extraordinary measures [to boost domestic demand], the economy may fall off a cliff,” Liu warned in an exclusive interview with the South China Morning Post on Wednesday.
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