China’s economic growth in the third quarter of this year has exceeded expectations, signaling the effectiveness of the government’s stimulus measures. However, this encouraging development was not enough to boost the performance of major Chinese companies in U.S. markets.
In the July-September period, the world’s second-largest economy expanded by 4.9% compared to the same period last year, surpassing the projections of economists. Furthermore, on a quarterly basis, growth accelerated from 0.5% in the second quarter to 1.3%.
Despite these positive numbers, China is still grappling with challenges such as a slowdown in the property sector and a sluggish recovery from the Covid-19 lockdowns that were lifted in late 2020. While it remains probable that the government will reach its 5% growth target for 2023, experts anticipate a more restrained expansion over the next few years compared to China’s accustomed pace.
Adding to these concerns is the tension between China and the U.S. regarding semiconductors. The U.S. reportedly plans to tighten restrictions on artificial intelligence chips exported to China, further complicating the situation.
In response to these developments, American Depositary Receipts for major Chinese firms saw a dip in premarket trading on Wednesday. JD.com (ticker: JD) experienced a 1.2% decline, while Alibaba (BABA) and Meituan (MPNGY) also saw decreases of 0.5% and 0.4% respectively.
These challenges and uncertainties continue to shape China’s economic landscape as it navigates through its recovery.