China’s growth momentum has taken a sharp hit from the combination of deleveraging, squeeze on property speculation, and energy shortages

It was the summer when the rains wouldn’t stop. The lights went out. And a housing boom came to a shuddering halt, reports the Washington Post.

China’s economy still grew 4.9 percent in the third quarter, matching its rate from a year earlier. But it lagged behind projections, reflecting that simply controlling the spread of the coronavirus isn’t enough to ensure smooth sailing.

First, central China was flooded by record rains over the summer, which destroyed crops and washed away homes and businesses. In September, a fuel shortage prompted rolling power outages across the country, disrupting factory production and daily life. Then came the news that mega property developer Evergrande was unable to repay its staggering debts, sending jolts of panic through the financial sector.

These challenges are weighing on the world’s second-largest economy, despite Beijing’s triumph in all but eradicating the coronavirus, a preoccupation for the past year and a half. While outbreaks are no longer a major risk that could derail production in the country, power shortages and financial turmoil just might be.

“China’s growth momentum has taken a sharp hit from the combination of deleveraging, squeeze on property speculation, and energy shortages,” said Eswar Prasad, an economics professor at Cornell University.

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