China is on the brink of a major economic slowdown, but growth is still slowing despite a massive stimulus program in the form of a $2 trillion stimulus package.
The National Bureau of Statistics on Wednesday said growth for the third quarter of 2016 was 0.8%, down from 0.9% in the previous quarter.
That would be the lowest quarterly growth since the global financial crisis, when China’s growth fell by 2.3% annually.
The latest contraction comes despite the central bank’s announcement of a 6% increase in the cash reserve holdings.
The central bank said it had raised reserves to a record $2.9 trillion for the year ending April 31, and that it is expected to maintain its $1 trillion-plus cash reserve target.
China’s economy grew by 6.7% in 2016, down from 7.6% in 2015, according to the central government.
But the country’s economic growth has slowed as the government continues to tighten the screws on the private sector.
Read moreChinese exports, a key gauge of economic strength, fell 7.5% in April, the biggest decline since February 2015, when exports were at their lowest in decades.
The country’s trade surplus with other countries grew by $2 billion to $20.5 billion in April.
Despite the economic slowdown in the wake of the central banking stimulus, Chinese officials continue to trumpet a rebound in the nation’s GDP.
In its annual report, the government said in April that China’s GDP was expected to expand 7.4% in 2020 and 8.4%, and 10.6%.
However, economists are worried about a slowdown in manufacturing activity, which accounts for about 40% of China’s total economy.
With the global economy on the verge of a recession, China’s export-dependent economy is already facing the most severe slowdown since the financial crisis.
China’s manufacturing sector is one of the biggest in the world, and its manufacturing output is already at a 15-year low.
China is currently facing a slowdown of 10% in gross domestic product, which will have a devastating impact on its economy.