On Monday, China announced that its economic growth in 2018 was 6.6%, which was the slowest rate recorded since 1990. The figure was expected by many worldwide as China’s economy has taken a huge hit due to its ongoing trade conflict with its largest trading partner, the US. Economists had expected annual GDP to fall from 6.8% of 2017. GDP growth during 4th quarter of 2018 was 6.4%, declining from year-on-year growth of 6.5% in 3rd quarter. Industrial output rose by 5.7% in December from 1year earlier, which exceeded predicted growth of 5.3% and outpaced 5.4% growth in November. Retail sales grew 8.2% during the same time, as compared to 8.1% in November. Helen Zhu hence stated that although economy is decelerating, most quarters are still providing support from export front-loading. She expects 2019 growth rate to fall further even with tax and consumption cuts. However economists like Julian Evans-Pritchard believe that official GDP figures of Beijing may not be as accurate. Chief of Chinese statistics bureau, Ning Jizhe, said that China’s economy may be deteriorating, but it is still showing signs of stabilization, as seen in previous 2 months, which may be attributed to domestic demand. The economic slowdown in China was starting to show before its trade clash with the US. The country is trying to manage falling economy with high debt levels.
The economic downfall is a result of fall in export orders and production metrics, both of which are because of the country’s trade dispute with America, in addition to other factors. China, as a part of negotiation, will increase import by buying more American goods for 6 years through 2024 to Trump hopes to be re-elected in 2020. Various policies may be implemented for boosting Chinese economy, including further cuts rolled out by Beijing to reserve requirement ratio as economist Tao Wang expects. Policy tweaks like infrastructure spending and tax cuts may also be used to stabilize the country’s slowing economy.