The Chinese Economy Witnessed the Slowest Growth in 27 Years; 6 Percent in the Third Quarter
The Chinese economy witnessed its slowest growth in the last three decades. According to the official data showed on Friday, Oct 18, China’s economic growth in the third quarter was the slowest in nearly 27 years and it was all due to cooling domestic demand and a protracted US trade war.
According to the National Bureau of Statistics, China’s economic growth fell to 6.0 percent in the third quarter, from 6.2 percent in the second quarter.
According to the analysts, though the growth is within the Chinese government’s whole year range of 6.0-6.5 percent, it is the worst figure attained in a quarter since the year 1992. In the year 2018, the economy grew at a rate of 6.6 percent.
Mao Shengyong, the NBS spokesman stated that overall the national economy was stable during the first three quarters.
He also added that the economy is certainly under pressure due to the slow global economic growth and the increase in external instabilities and uncertainties.
As stated by him, high-tech manufacturing and services were the key factors of growth, while the employment rate was pretty stable.
Beijing has taken measurements for the growth of the economy by cutting major taxes and rates and also scrapped foreign investment restrictions in the stock market.
The central bank also contributed to the growth of the economy by stating to pump 200 billion yuan into the financial system to maintain liquidity in the market.
But these efforts didn’t prove to be enough to compensate for the blow caused by the decrease in demand at the internal market.
Being prompted by the trade conflict and weak domestic demand, the IMF lowered the growth forecast of the Chinese economy to 6.1 percent from 6.2 percent.
The on-going trade war between the US and China has also affected the country’s economy.
China’s import and export figures were also low in the month of September, completely due to new tariffs imposed by Washington that triggered Beijing to reply with a fitting response.
The Chinese economy received mixed signals from various sectors.
According to the NBS, the increase in demand for solar panels and electric vehicles caused the rise of industrial output, from 4.4 percent in August to 5.8 percent in September.
But, the fixed-asset investment witnessed a decline from 5.5 percent in January-August to 5.4 percent in January-September. It was due to the fact that the Govt. had borrowed money for construction works to boost the GDP.
The people of China consumed more, as the retail sales grew to 7.8 percent on-year in September from 7.5 percent in August.
After the meeting of the US president with Chinese negotiator Liu He in Washington, Trump announced a ‘phase one’ deal to come out of this situation.
But, the plan didn’t work well, as neither the stinging tariffs, already imposed on the trade money between the nations were rolled back, nor import taxes of December were addressed.
Michael Taylor, an MD of Moody’s Investors Service stated that a short-term agreement between the US and China won’t be enough to resolve the issues of trade, technology, investment, and geopolitics.
He also added that they are expecting the coming rounds of negotiation to be challenging and there was potential for the volatility of financial markets in the coming time.
Gao Feng, China’s commerce ministry spokesman gave a statement on Thursday that the negotiators have increased their efforts to settle the details of this deal and also both sides were looking to resolve everything.
On Wednesday, the US President stated that he was looking forward to signing this deal with President Xi Jinping at next month’s APEC summit in Chile.
However, Gao didn’t reveal whether the partial deal or the full ready would be completed before the deadline of mid-November.
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