Daily Management Review

China’s 2019 Growth Lowest In 29 Years At 6.1 Percent


01/18/2020




China’s 2019 Growth Lowest In 29 Years At 6.1 Percent
China’s National Bureau of Statistics announced on Friday announced that the 2019 growth rate of the country was the slowest in 29 years at 6.1 per cent.
 
This rate of growth was for a year in which the Chinese economy was hit hard by the tariffs imposed by the United States on exports form the country to the US because of the trade war between the two largest economies of the world.
 
It is worth mentioning that a day earlier, the two countries signed a partial trade agreement to announce a pause in the trade war that has been ongoing for more than 18 months now. 
 
The last time the growth of the country was lower than 2019 was in 1990 when it had touched 3.9 per cent at the height of political turmoil in the country. However despite this historic low, the rate of growth clocked by the country was in line with the range of between 6.0 per cent and 6.5 per cent that was forecast by the Chinese government at the start of the last year. However the number was below the expectations of the market of 6.2 per cent.
 
The rate of growth was also in line with the predictions for the economy by the International Monetary Fund and the World Bank.
 
The growth rate for China in the fourth quarter of last year was the same as the previous quarter at 6 per cent. But that was the lowest quarterly growth on record.
 
There was a 5.7 per cent growth in China’s industrial production that is a measure of the output of the country in terms of manufacturing, mining and utilities. That number was a little over what the market was expecting at 5.6 per cent but lower than the 6.2 per cent clocked by the economy a year earlier.
 
There was a growth of 8 per cent in retail sales in 2019. This number is important because it reflects the spending by the consumer in the most populous country of the world. The number in 2018 was at 9 per cent. He number was in line with expectations of the market.
 
While the 2019 growth rate of the Chinese economy would come a as a relief for the government as it has been able to keep it over the psychologically important 6.0 per cent mark, analysts note the 2020 would be a year froth with challenges. Despite the partial trade deal with the US is expected to put off some pressure from the Chinese economy,
 
According to analysts while the partial trade deal will offload some pressure form the Chinese economy, it will have to allocate huge amounts in 2020 to meet the purchasing commitment of US goods that it has made in the trade deal. That will increase its imports. Additionally, the economy is also likely to continue to face structural problems.
 
Moreover, there are also doubts about the holding the partial trade deal with the US.
 
“The phase one deal is only an interim agreement between China and the US. In fact, to push for negotiation in the next stage, the US will keep existing tariffs on imports from China unless the two countries manage to reach a phase two deal,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis. “In the bilateral evaluation and dispute resolution chapter, the agreement also makes it clear that, if the concerns cannot be resolved, the two parties hold the right to suspend an obligation, adopt a remedial measure, or in the worst case, withdraw from the agreement.”
 
(Source:www.scmp.com)






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