China’s economic growth cooled to its weakest in nearly 30 years in 2019 amid a bruising trade war with the United States, and more stimulus is expected this year as Beijing tries to boost sluggish investment and demand, Reuters writes.
But data on Friday also showed the world’s second-largest economy ended the rough year on a somewhat firmer note as a trade truce revived business confidence and earlier growth-boosting measures finally appeared to be taking hold.
As expected, China’s growth slowed to 6.1% last year, from 6.6% in 2018, data from the National Bureau of Statistics showed. Though still strong by global standards, and within the government’s target range, it was the weakest expansion since 1990.
This year is crucial for the ruling Communist Party to fulfill its goal of doubling gross domestic product (GDP) and incomes in the decade to 2020, and turning China into a “moderately prosperous” nation.
Analysts reckon that long-term target would need growth this year to remain around 6%, though top officials have warned the economy may face even greater pressure than in 2019. More recent data, along with optimism over a Phase 1 U.S.-China trade deal signed on Wednesday, have raised hopes that the economy may be bottoming out, Reuters adds.
Fourth-quarter GDP rose 6.0% from a year earlier, steadying from the third quarter, though still the weakest in nearly three decades. And December industrial output, investment, and retail sales all rose more than expected after an improved showing in November.
Policy sources have told Reuters that Beijing plans to set a lower growth target of around 6% this year from last year’s 6-6.5%, relying on increased infrastructure spending to ward off a sharper slowdown. Key targets are due to be announced in March.
On a quarterly basis, the economy grew 1.5% in October-December, also the same pace as the previous three months.