What's going on?

Unsettling news on Friday out of China, which reported an economy growing at its slowest pace since the financial crisis almost a decade ago (tweet this). Compared to a year before, the Chinese economy grew 6.5% in the third quarter of 2018 � missing expectations of 6.6%.

What does this mean?

While most Western economies would kill for that sort of growth, it�s evidence that China is only moving further away from the days when its economy regularly expanded over 10% each year. The slowdown appears to be down to weaker domestic spending: car sales fell 7.1% in the past year, the steepest decline since 2002, and although investment in swanky infrastructure grew by 3.3%, that�s well down on a year ago.

Why should I care?

The bigger picture: The trade war stakes just got higher.

The global recovery from the financial crisis has been largely driven by China�s relentless expansion: companies have turned to the country to sell things like oil and computer chips in the face of subdued demand from Europe in particular. Now, a domestic slowdown in China could be aggravated by ongoing trade war as US tariffs begin to bite in the coming months � with one trade analyst predicting growth could slip as low as 6.0% next year. That could spell trouble further afield…

For markets: Tougher times could be ahead.

Investors have had a tough time with China this year. There have been wild swings in the stock market, which is sitting near four-year lows, and the local currency, the yuan, has taken a bruising. The country�s financial chiefs are trying to stem the bleeding by singing from the same hymn sheet in a rare coordinated plea to reassure investors. Chinese regulators said that they�ll introduce measures to calm markets, adding that the stock market rout was abnormal and that the country�s economic fundamentals were solid. Investors around the world will be hoping that they�re right.