The importance of China to the global financial system is to be illustrated again on Monday as the world’s second-largest economy releases its estimate of third-quarter gross domestic product.
The figures come as China’s president Xi Jinping acknowledged concerns about the strength of his country’s economy on the eve of a state visit to the UK, and follow the crash of world stock markets in August on fears about the country’s economic robustness. Economists are now pencilling in the slowest Chinese growth rate in the country since the depths of the financial crisis.
In a written interview with Reuters, Xi said: “As an economy closely linked to international markets, China cannot stay immune to the lacklustre performance of the global economy. We do have concerns about the Chinese economy, and we are working hard to address them. We also worry about the sluggish world economy, which affects all countries, especially developing ones.”
China is expected to announce GDP growth of slightly under 7% between July and September, which would be the most sluggish quarterly pace since 2009. Growth came in at 7% in both of the first two quarters of this year, matching the country’s target.
Alastair Winter, chief economist of City investment bank Daniel Stewart, said: “The NBS (National Bureau of Statistics) has become quite prickly recently and so it will be most interesting to see if it brazenly reports GDP on track at 7% or uses a subtler approach of a near miss ... No doubt, China’s equity markets will respond patriotically, albeit with some official encouragement, to whichever numbers the NBS report.”
Xi’s visit to the UK has been hailed by British and Chinese officials as the start of a “golden era” of relations which the Treasury hopes will make China Britain’s second biggest trade partner within 10 years. Around 150 deals are expected to be sealed this week in areas such as healthcare, aircraft manufacturing and energy, but also come shortly after the collapse of the steel plant at Redcar in Teesside, where its owners announced that they planned to mothball the facility that could no longer compete with low-cost imports from places such as China.
Ann Watson, chief executive of Semta, an employer-led group aiming to enhance the UK’s engineering skills base, said she was “mortified” by recent developments including Redcar.
“Any job losses are terrible for the men, women and families that they effect,” she said. “But these job losses could prove catastrophic for industry – and the nation.
“This country needs 800,000 additional skilled engineers by the end of the decade – so Britain can ill afford to haemorrhage thousands of skilled workers at this critical time.”
This article was written by Simon Goodley, for theguardian.com on Sunday 18th October 2015 16.40 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010