China's economy grew at its slowest pace in nearly three decades in
2019.That wasn't unexpected, and Chinese officials insisted that the
country's economy will be stable this year. But it might be too early to
say the worst has passed, according to analysts.To get more
china economy news latest, you can visit shine news official website.
The 6.1% GDP growth rate for 2019 was near the bottom of Beijing's
target range, and sharply down on the previous year's 6.6%. The country
also reported that GDP grew by just 6% in the fourth quarter.
The ongoing slowdown is indicative of all the challenges facing the
world's second largest economy, which is contending with rising debt,
cooling domestic demand and fallout from the trade war with the United
States.
Trade tensions, at least, cooled off somewhat before Friday's
announcement. Beijing and Washington signed a "phase one" trade deal
earlier this week, which removes a little bit of pressure, at least in
the short term.
Chinese officials seized on the temporary truce during a press
briefing. The initial trade agreement will give people more reason to be
optimistic about the country's economic growth, said Ning Jizhe,
China's national statistical chief. He added that the deal will help
China deepen its economic relationship with the United States.
Vice Premier Liu He, who was in Washington this week to sign the
trade deal, also told reporters Wednesday that he is optimistic about
the economy. He suggested that China is relying less on debt and is
being driven by innovation.
Analysts have already pointed to the "phase one" deal — in which
China agreed to buy hundreds of billions of dollars worth of products
from the United States, among other terms — as something that will boost
business confidence this year. Fitch Ratings, for example, on Thursday
raised its economic growth forecast for China this year to 5.9% from
5.7%.
"The signing of the phase-one trade deal is a signal that the
situation is unlikely to deteriorate," said J.P. Morgan Asset Management
Global Market Strategist Chaoping Zhu.
But analysts have also questioned whether China will be able to
fully live up to its promises. The trade war isn't over: US tariffs on
many Chinese goods still remain in effect, and Washington has made it
clear that those will remain a form of leverage as the two sides
negotiate the next phase of their agreement. And analysts from Citi,
Nomura, and Invesco have all pointed out that it will be a challenge for
China to reach its import targets for US goods.
Even with the "phase one" deal, China has other things to worry about, according to economists at Capital Economics.
"Despite the recent uptick in activity, we think it is premature to
call the bottom of the current economic cycle," they said in a research
note. They added that the effects of the trade deal will be offset by a
renewed slowdown in domestic demand, which will trigger further action
by China's central bank.
Ning, the Chinese statistical chief, admitted that the economy will
be pressured this year. But he also said China will take action as
necessary to help stave off a serious slowdown, on top of other stimulus
measures it has already announced. That should help the economy
maintain "stable growth" this year, he added.
Others also pointed to promising figures buried in Friday's data.
Industrial production and retail sales data for December outperformed
forecasts, said Jeffrey Halley, senior market analyst for Asia Pacific
at Oanda.
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