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China’s President Xi Jinping
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BEIJING, AFP: China’s economy grew at a faster pace than forecast in the third quarter, official data showed Monday, but investors reacted with alarm to President Xi Jinping’s sweeping new powers over the ruling Communist Party. Xi secured an expected third term as leader at a party Congress over the weekend, but surprised observers by stacking leadership positions with protégés and allies.
After delaying the release of economic data last week, the Government announced Monday that the economy grew 3.9% year-on-year in the third quarter.
China had been expected to announce some of its weakest quarterly growth figures since 2020, with the world’s second-biggest economy hobbled by COVID-19 restrictions and a real estate crisis.
But investors instead focused on the political developments, which raised fears Xi and his allies would continue with gruelling virus lockdowns and other policies that have punished the economy.
China’s currency slumped and stocks nosedived in Hong Kong to their lowest level since the global financial crisis.
On Monday, the onshore yuan dipped more than 0.4% to 7.2633 per dollar – it’s weakest since January 2008.
The Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, closed down by more than 7% –the worst showing after any Communist Party Congress since the start of the index in 1994.
One of the most pressing concerns is Xi’s zero-COVID policy, which continues to put tens of millions of people under rolling lockdowns that also shutter factories.
China is the last of the world’s major economies to hew to the strategy.
In a speech to close the Congress on Saturday, Xi insisted China’s COVID response has been a success. And he promoted Li Qiang, the architect of a two-month lockdown in Shanghai that crippled the financial hub’s economy, to the second most powerful post in the Communist Party.
