China's GDP growth hits 6.7% in first three quarters in 2018

Workers at the Chinese port of Qingdao. Chinese exports are likely to face tougher months ahead

Workers at the Chinese port of Qingdao. Chinese exports are likely to face tougher months ahead

Banking regulator Guo said Chinese financial markets have recently seen "a large number of abnormal fluctuations due to various factors, which is seriously out of line with China's economic development fundamentals and inconsistent with the overall soundness of China's financial system".

The benchmark Shanghai Composite index touched its lowest level in almost four years yesterday before closing down 2.9 per cent, dragged down by falling energy shares hit by cheaper oil and by widespread concern that plunging share prices could lead to a spike in margin calls.

After more heavy falls Thursday, the index rebounded and was up more than 2.5% in Friday's session.

China's stock markets fell in response to the economic data.

Meanwhile, Liu Shiyu, chairman of the China Securities Regulatory Commission (CSRC), said the regulator would encourage private equity funds to buy shares in listed firms, support share buy-backs and speed up approval for mergers and acquisitions (M&As), according to a statement on the CSRC's official website.

China's exports unexpectedly kicked into higher gear in September, largely as firms front-loaded shipments to dodge stiffer US duties.

"Frankly, the psychological impact is bigger than the actual impact", he said.

China faces rising economic challenges including high debt levels and an intensifying trade battle with the US.

Washington, Europe and other trading partners complain those plans violate Beijing's market-opening commitments.

The 6.5% quarterly growth is the lowest since the first quarter of 2009 and is mixed news for Chinese leaders as they brace for a prolonged trade conflict with Washington. The official says it could shave 0.7 percentage points off China's growth, which has been expanding at around 6.7 percent a year.

But Trump shouldn't gloat, because the US economy is likely to slow down, too.

A BBC report on the state of China's economy said that Beijing was not expecting to fight a trade war at a time when it was trying to manage systemic risks in the economy. That would be a sharp drop from the second-quarter rate and a comedown for Trump. He prophesies that the slump will collapse around the middle of next year.

Beijing has already been increasing policy support in the last few months to prop up growth.

On Monday, China said its total exports grew faster than expected in September- 14.5 per cent year on year in dollar terms, up from 9.8 per cent in August - as many USA companies front-loaded their orders for the rest of the year to minimise additional tariff costs. However, such steps could further exacerbate the country's debt problems.

Chennai: China's trade war with the USA has been escalating and now the asian country has felt the brunt of it as latest figures show growth is at its slowest for nearly a decade.

But they quickly reversed course after the officials' comments and the economic growth figures filtered through the markets.

Cutting interest rates and boosting public spending would allow many companies to borrow money and invest in fixed assets, but make it more hard for the Chinese government to normalize the financial system. Nomura estimates the ratio of outstanding pledged shares in the mainland Chinese A-share market is about 8.9 percent in the third quarter, down from a peak of 10.4 percent in the first quarter of 2016. This year's plunge in China's stock markets, according to economists and analysts, is also taking a toll on consumers.

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