China’s economy grows 6.1 per cent in 2019, the slowest rate in 29 years
China’s economic growth slowed to its weakest pace in nearly 30 years in 2019 amid a bloody trade war with the United States, Beijing is trying to stimulate sluggish investment and demand this year.
Data released Friday showed that the world’s second largest economy ended a tough year in a slightly stronger position as the trade truce restored business confidence and earlier measures to stimulate growth finally kicked in..
As expected, China’s growth slowed to 6.1% last year from 6.6% in 2018, according to data from the National Bureau of Statistics. While still strong by global standards and within the government’s target range, it has been the weakest since 1990..
This year is pivotal for the ruling Communist Party, which has fulfilled its goal of doubling gross domestic product (GDP) and incomes over the decade to 2020 and transforming China into «moderately prosperous» country.
Top Chinese Officials Warn Economy May Face Even Greater Pressure Than 2019.
Beijing has worked for years to contain speculation and rising house prices, and last year, the country’s leaders vowed not to use the property market as a form of short-term stimulus..
China will unveil additional support measures this year as the economy comes under further pressure, Statistics Bureau chief Ning Jiche said at a news conference..
Ning noted that China’s GDP per capita exceeded $ 10,000 for the first time last year. But analysts say more painful reforms are needed to ensure additional growth..
Beijing relies on a mix of financial and monetary measures to weather the current downturn, cut and taxes allow local governments to sell huge amounts of bonds to finance infrastructure projects.
Banks were also encouraged to lend more, especially to smaller firms, as new RMB lending reached a record 16.81 trillion yuan ($ 2.44 trillion) in 2019.
The central bank has cut banks’ required reserve ratios (RRR) – the amount of cash that banks must keep as reserves – by eight times since the beginning of 2018, most recently this month. China has also seen modest reductions in some lending rates..
Analysts surveyed by Reuters expect further declines in both RRR and key interest rates this year.
But Chinese leaders have repeatedly pledged that they would not undertake such massive stimulus during the global crisis of 2008-2009, which quickly slowed growth but left a lot of debt..
Containing the risks of the financial system will remain a top priority for policymakers this year. Corporate bond defaults hit a new record last year, while government-linked firms had to step in to bail out several troubled small banks.
Economists surveyed by Reuters expect China’s growth to fall to 5.9% this year, even with more stimulus and a trade truce..