China moves to lift confidence as economic growth hits weakest pace since 2009

China’s economic growth cooled to its weakest quarterly pace since the global financial crisis, with regulators moving quickly to calm nervous investors as a years-long campaign to tackle debt risks and the trade war with the United States began to bite.

Chinese authorities are trying to navigate through numerous challenges, as the trade war fears have sparked a blistering selloff in domestic stock markets and a steep decline in the value of the yuan versus the dollar, heightening worries about the growth outlook.

The economy grew 6.5 percent in the third quarter from a year earlier, below an expected 6.6 percent rate, and slower than 6.7 percent in the second quarter, the National Bureau of Statistics said on Friday. It marked the weakest year-on-year quarterly gross domestic product growth since the first quarter of 2009 at the height of the global financial crisis.

After another big decline in Chinese stocks on Thursday, policymakers launched a coordinated attempt to soothe markets, with central bank governor Yi Gang saying equity valuations are not in line with economic fundamentals. Beijing has already been increasing policy support in the last few months to prop up growth. The Shanghai Composite index .SSEC, which slumped more than 1 percent in early Friday deals, rallied strongly in afternoon trading to finish up 2.6 percent. Third quarter growth was hurt by the weakest factory output since February 2016 in September as automobile makers cut production by over 10 percent amid a sales slowdown.

Importantly, second quarter sequential growth was revised down from the previously reported 1.8 percent, suggesting the economy carried over less momentum into the second half than many analysts had expected. Before the data release, economists had expected China’s full-year growth to come in at 6.6 percent this year – comfortably meeting the government’s 6.5 percent target – and 6.3 percent next year.