China’s GDP growth in the third quarter exceeded expectations, signaling a rebound in the country’s economy. According to the third-quarter growth figure announced by the Chinese government on Wednesday, the nation’s GDP growth rate for the third quarter was 4.9 percent, or 0.5 percentage points higher than market expectations. The unemployment rate for September stood at 5 percent, down 0.2 percentage points from the previous month’s 5.2 percent figure.

During the first three quarters of 2023, China’s GDP increased by 5.2 percent compared to the previous year, hitting 91.33 trillion yuan ($12.4 trillion), with industrial production increased by 4 percent, and retail sales rose by 6.8 percent during the same period. Experts predict that China could achieve the government‘s target of 5 percent annual growth.

But weak exports and consumption remain challenges to achieving the government’s target. Exports and imports in the first three quarters of this year fell by 0.2 percent to 30.80 trillion yuan year-on-year. Investment in real estate development in China also decreased by 9.1 percent compared to the previous year, raising concerns about a slowdown in the economy until the third quarter of 2023. The unemployment rate during the same period in China stood at 5.3 percent.

Bloomberg reported that the property market’s deterioration is “showing no signs of slowing” despite being a key driver of economic activity.

Country Garden Holdings Co., China’s biggest private property developer, is facing another debt default crisis. According to media reports, Country Garden owes $15.4 million in dollar-denominated bond interest by Wednesday but has not yet specified the exact date of payment. The company already had a 30-day extension for the interest payment that it failed to make in September.

Market insiders project a likely default for the property developer soon, given its series of interest payments that are due. Earlier, fellow Chinese property developer Evergrande Group declared a default and is now taking steps toward liquidation and awaits a liquidation hearing in a Hong Kong court scheduled for October 30.

Together, Country Garden’s default and Evergrande Group’s bankruptcy will likely have a negative impact on the slowly recovering Chinese economy.

By Shin Chan-ok and Chang Iou-chung

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