China Posts Lowest Economic Growth in 28 Years

China Posts Lowest Economic Growth in 28 Years

China Posts Lowest Economic Growth in 28 Years

The figures from the National Bureau of Statistics drags full-year growth down to 6.6 percent, the slowest annual pace since 1990.

China's economy slowed dramatically during 2018, dropping to its lowest point in almost 30 years as the communist country continues battling a prolonged tariff fight against President Donald Trump.

"We acknowledge that a stronger-than-expected fiscal and monetary policy response from China, and/or supply disruptions (i.e., Chuquicamata in copper, Chinese smelting constraints in zinc), may support higher price estimates". Shares rose in Shanghai and Hong Kong on Monday, Jan. 21, 2019, as China reported that its growth fell to a three-decade low of 6.6 percent in 2018.

Economic activity held up through most of 2018 despite President Donald Trump's tariff hikes on Chinese imports in a fight over Beijing's technology ambitions.

China's ruling Communist Party is trying to steer China to slower, more self-sustaining growth based on consumer spending instead of trade and investment. But a year ago, the number of newborn babies dropped to 96,903, down 15.7 per cent from 2017, according to figures from Wenzhou government.

Referring to the USA trade war, he pointed to a "complicated and severe external environment" but then sought to issue a reassurance that "the economy overall is driven by domestic demand".

Having been a stellar performer benefiting from supportive policies, the tech sector still grew at double-digit rate but growth slowed to 29.1 percent in the fourth quarter compared with 32.8 percent in the third.

Economists in China and overseas have long suspected data is massaged upward, often noting that full-year gross domestic product hits Beijing´s pre-set targets with suspicious regularity.

This will have a severe negative impact internationally as the Chinese economy contributes over 30% to global growth, analysts said.

"The economy is going through a soft phase, with continued headwinds from slowing growth in credit, industrial profit and housing sales".

"We think that stability in the currency is the key policy objective especially as China heads towards fixed income index inclusion of various global benchmarks that should mean a large amount of foreign investor inflows into China that can help to offset some of the household related outflows that may be required in the coming years", he said.

At the same time, Beijing has sought to control the dissemination of sensitive economic data amid its uncertain growth outlook. Just last week, the Chinese government announced a 1.3 trillion yuan ($193 billion) stimulus package to bolster the economy, the latest of several measures recently taken to prevent the country's growth from collapsing altogether.

Ning stressed that China's domestic market had enormous potential, so trade disputes with Washington could not change the main vector of development of the country's economy, which is very shock-resistant.

A cooling Chinese economy could hurt companies from iPhone maker Apple in the USA and carmakers in Europe to mineral exporters in Australia.

Nomura analysts said current stimulus measures will not be sufficient and the government will need to do more to prevent a rapid deterioration in the economy.

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