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China posts weakest growth in 29 years as trade war bites

Credit: Reuters Studio
Published on January 21, 2020 - Duration: 01:41s

China posts weakest growth in 29 years as trade war bites

China's economic growth slowed to its weakest in nearly 30 years in 2019 amid a bruising trade war with the United States and sputtering investment, and more stimulus steps are expected this year to help avert a sharper slowdown.

Francis Maguire reports.

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China posts weakest growth in 29 years as trade war bites

China's economic growth slowed to its weakest in nearly 30 years in 2019.

As the ongoing Sino-U.S. trade war hurt investment.

Fourth quarter GDP rose 6% from a year earlier - the weakest in almost three decades.

That left full-year growth at 6.1% - China's slowest annual rate of expansion since 1990.

(SOUNDBITE) CAZENOVE CAPITAL GLOBAL ECONOMIST, JANET MUI, SAYING: "What we're experiencing is a secular slowdown in Chinese growth.

What we're talking about is we're no longer experiencing the sort of 20, 30% year-on-year growth in infrastructure spending, in fixed investment, in industrial production, we're very unlikely to see that now given how China has already grown.

So, I think this is actually not surpassing to us we are seeing the slowest growth in 30 years for China." Beijing has relied on stimulus to get through the current downturn - cutting taxes and banks have been encouraged to lend more.

But the economy has been slow to respond.

More stimulus steps are expected this year to avoid a sharper slowdown.

(SOUNDBITE) (Mandarin) CHINA'S COMMISSIONER FOR THE NATIONAL BUREAU OF STATISTICS, NING JIZHE, SAYING: "We need to implement proactive fiscal policies and prudent monetary policies as well as employment, industry and regional policies amongst others to guarantee that the economy operates within a reasonable range and to achieve reasonable growth." Policy sources told Reuters Beijing plans to set a lower economic growth target of around 6% this year.

Down from last year's 6-6.5%.

The ruling Communist Party had this year down as the moment to double GDP and incomes for the decade to 2020.

The latest growth update could throw that ambition into question.

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