Ting Lu, Nomura Chief China Economist, cut his forecast for Chinese GDP growth this year as factories shut down to comply with carbon emissions reduction targets. Lu also said that markets are so confused by the fallout of the property sector that they may ignore Beijing’s unprecedented curbs on energy consumption and energy intensity.
He also expects China’s GDP to grow by 7.7% this year, down from 8.2% previously forecast. The Chinese President announced in September that China would reach peak carbon emissions by 2030 and become carbon neutral by 2060. This kicked off national and local plans to reduce the production of coal and other carbon-heavy processes.
Nomura chief China economist spoke about the share shocks. China’s recent, sweeping regulatory crackdown on internet platforms, fintech, video games, off-campus tutoring, ride-hailing, data privacy, food delivery, crypto miners and e-cigarettes have been significant.The crackdown on off-campus tutoring may be especially negative for growth in Q3 and Q4 this year, as the entire sector has been decimated. He lowered quarterly GDP forecasts to 4.7% year-on-year growth in the third quarter and 3% in the fourth. China’s official release on third-quarter GDP is due out Oct. 18. The accuracy of government data is frequently doubted.