Daily Management Review

Record Low For China’s GDP Growth For Second Quarter Due To Trade War With US


Record Low For China’s GDP Growth For Second Quarter Due To Trade War With US
The growth of gross domestic product (GDP) of China for the second quarter of 2019 touched record lows at 6.2 per cent primarily because of the impact of the trade war with the United States. 
According to data published by the National Bureau of Statistics (NBS) of China, the economy of the second largest economy of the world clocked a growth rate of 6.4 per cent for the quarter. Quarterly growth rate had not dipped below 6.4 per cent even during the height of the 2009 global financial crisis. 
However despite the record low figures, it is still within the target range of the growth as predicted by China for the year. The median forecast of a poll of analysts conducted by Bloomberg was 6.2 per cent. However there were some analysts who had forecast worse growth rates because of the concerns of the impact of trade war on he country’s economy.
The data released also showed that the growth rate of the Chinese economy for the first half of the current year was at 6.3 per cent.
“The economic data is still facing downturn pressure [in the second half of the year]. While there are also many positive factors, the market vitality is gradually being stimulated,” said NBS spokesman Mao Shengyong.
However, the other official data which primarily was related to the month of June was better than expected. For example, there was a growth of 6.3 per cent year on year growth in the month of June in industrial production which depicts the industrial sectors output in China’s economy which comprises of manufacturing, mining and utilities sectors.
The figure in May was 0.5 per cent lower - the lowest since February 2002 but was more than the expected number according to economists but was well over what had been predicted by economists which had pegged the growth at 5.2 per cent.
The growth in the manufacturing sector output was 6.2 per cent year-on-year in June compared to 5.0 per cent in May. This number was also more than what had been expected by analysts.  
However for the second half of the current year, there is still downward pressure on the economy.
The main driver of industrial growth for the Chinese economy was provided by the private sector of the country and accounted for a growth rate of 8.3 per cent in the month of June while clocking 8.7 per cent for the first six months of the year. In comparison, the growth rate for state-owned enterprises was 6.2 per cent and 5.0 per cent for the two periods respectively.
"The level of investment was still relatively low,” added NBS spokesman Mao.
The growth in retail sale in June was also impressive at 9.8 per cent compared to 8.6 per cent for the previous month,, showed the data. The figure was still lower for the month of April at 7.2 per cent which was the lowest for it since May 2003.