Energy, Shipping And Real Estate Crises Walloping China Economy

China's GDP is growing at the slowest pace in a year as a massive energy crunch, shipping disruptions and a deepening property crisis take their toll on the world's second-largest economy, Laura He, Kristie Lu Stout, and Sophie Jeong reported for CNN Business.

Photo Insert: China's 4.9% economic expansion in the third quarter is much slower than the 7.9% increase the world's second-largest economy registered in the second quarter.

The economy expanded by just 4.9% in the third quarter, compared with the same period a year earlier. That's much slower than the 7.9% increase China registered in the second quarter.

It's also the weakest rate of growth since last year's July-to-September period when GDP also grew 4.9%. “The challenges of keeping the economy running smoothly have increased," said Fu Linghui, spokesperson for China's National Bureau of Statistics, at a press conference in Beijing on Monday.

He said the country's recovery from the COVID-19 pandemic is "still unstable and uneven."

China was the only major economy to escape 2020 without falling into recession. But it has encountered a slew of challenges this year that are weighing heavily on growth. The country is in the middle of an energy crunch that is denting factory output and leading to power cuts in some areas.

That problem has been fueled by demand earlier this year for construction projects that need fossil fuel and are at odds with Beijing's pursuit of ambitious targets to cut carbon emissions.

Shipping delays and mounting inventories have also hit smaller manufacturers in China that are now hurting for cash, resulting in lost orders and production cuts. The real estate sector is also suffering from a government drive to curb excessive borrowing.

Property investment is now falling. That's placing strain on developers, not least Evergrande, whose debt crisis has triggered worries about the risk of contagion for the sector and the broader economy. Some other property firms have already indicated that they are struggling to pay their debts.

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