China’s growth slowed to 6.1% last year, its weakest in 30 years.
17 January

China’s growth slowed to 6.1% last year, its weakest in 30 years.

 

China’s 2019 economic growth slowed to its weakest in nearly 30 years amid a bruising trade war with the United States. Beijing has been trying to boost sluggish investment and demand but data on Friday showed the world’s second-largest economy ended the rough year on a somewhat firmer note as a trade truce revived business confidence and earlier growth boosting measures finally appeared to be getting traction. China’s growth slowed to 6.1% last year, from 6.6% in 2018 and while it is still strong by global standards and within the government’s target range, it was the weakest expansion since 1990.

 

This year is crucial for the Chinese Communist Party to fulfil its goal of doubling gross domestic product (GDP) and incomes in the decade to 2020 and turning China into a “moderately prosperous” nation. More recent data, along with optimism over a Phase 1 U.S.-China trade deal signed on Wednesday, have raised hopes that the economy may be bottoming out. Fourth-quarter GDP rose 6.0% from a year earlier, steadying from the third quarter, though still the weakest in nearly three decades. December industrial output, investment and retail sales all rose more than expected after an improved showing in November. On a quarterly basis, the economy grew 1.5% in October-December, also the same pace as the previous three months. December data released along with GDP showed a surprising acceleration in industrial output and a more modest pick-up in investment growth, while retail sales were solid. Industrial output grew 6.9% from a year earlier, the strongest pace in nine months, while retail sales rose 8.0%.

 

London’s FTSE 100 joined a rally in global markets trading at 7636.30 as China’s economic growth met expectations despite its trade war with the United States. Fixed-asset investment rose 5.4% for the full year but growth had plumbed record lows in autumn. Infrastructure investment grew just 3.8% in 2019, decelerating from 4% in January-November, despite higher local government bond issuance and other policy measures. Property investment growth hit a two-year low in December even as it grew at a solid 9.9% pace in 2019. Property sales fell 0.1%, the first annual decline in five years. The central bank has cut banks’ reserve requirement ratios eight times since early 2018, most recently this month. China has also seen modest cuts in some lending rates.

 

Oil prices were steady as reports of sluggish economic growth in China, the world’s biggest crude importer, raised concerns about fuel demand which countered optimism from the signing of a Sino-U.S. trade deal this week. Brent has fell to $64.1 after gaining nearly 1% yesterday. U.S. West Texas Intermediate was mostly flat at $58.52 a barrel, having risen more than 1% in the previous session. Oil rose yesterday after China and the United States signed their Phase 1 trade accord. The mood was further boosted after the U.S. Senate approved changes to the U.S.-Mexico-Canada Free Trade Agreement. In 2019, Chinese refineries processed 651.98 million tonnes of crude oil, equal to a record high 13.04 million barrels per day, and up 7.6% from 2018, government data showed. Throughput also set a monthly record for December.

 

 

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