The Chinese market collapsed after Xi’s re-election and the release of economic data
China’s GDP grew by 3.9% in the third quarter compared to the same period last year, Reuters writes, citing data released by Beijing. The Chinese economy is recovering faster than expected: economists polled by the agency predicted GDP growth in July-September by 3.4%. In the second quarter of 2022, China’s economy grew by just 0.4%.
The publication of data on the state of the Chinese economy was originally scheduled for October 18, but was delayed due to the Chinese Communist Party Congress last week, the agency said.
Although China’s third-quarter GDP growth was better than expected, a more sustainable economic recovery in the long term is hampered by ongoing restrictions due to COVID-19 outbreaks, a prolonged real estate downturn and risks of a global recession. China’s plans to continue its zero-tolerance policy on COVID-19, endorsed by the ruling Communist Party, are adding to investor concerns.
Shares of Chinese companies in Hong Kong fell to a 13-year low, and the yuan fell to its weakest level in 15 years, the agency said.
“The market is concerned that with the election of so many supporters, Xi Jinping has an unlimited opportunity to pursue policies that will not be in the interests of the market,” said Justin Tang, head of Asia research at United First Partners.
Tech giants Alibaba (NYSE:BABA), Tencent (HK:0700) and Meituan (HK:3690) have also tumbled as investors remain unsure that Xi and his supporters will be able to revive China’s private enterprise sector.