China's Q4 GDP growth dented by services, agriculture

Muriel Colon
January 23, 2019

China´s economy grew at its slowest pace in nearly three decades in 2018, losing more steam in the last quarter as it battles to quell massive debt and a U.S. trade war, official data showed Monday.

Fourth-quarter gross domestic product (GDP) grew at the slowest pace since the global financial crisis, easing to 6.4 percent year-on-year, as expected, from 6.5 percent in the third quarter, the National Bureau of Statistics said January 21.

The number of babies born a year ago fell to 15.23 million, down by some two million from 2017, data from the National Bureau of Statistics showed on Monday (Jan 21).

Last year's growth rate was down from 6.8 per cent in 2017 and was the lowest growth rate of 3.9 per cent, recorded in 1990.

China added almost a third of the approximately $23 ten added to global GDP in the 10 years up to 2017.

The Chinese economy has recorded its lowest annual growth rate since 1990 amid indications that the trade war launched by the United States is starting to make an impact. "China trade war escalates, should the temporary truce expire without any trade deal being struck", Rajiv Biswas of IHS Markit said in an email.

But these measures have so far failed to reverse the slowdown which saw activity levels in manufacturing fall close to or just under contraction levels in December.

With stimulus measures expected to take some time to kick in, most analysts believe conditions in China are likely to get worse before they get better, and see a further slowdown to 6.3 percent this year.

Exports held up through most of 2018 despite President Donald Trump's tariff hikes on Chinese imports in a fight over Beijing's technology ambitions. It grew by 5.7 percent over a year earlier, up 0.3 percentage points from November.


On a quarterly basis, the economy grew 1.5 percent in the fourth quarter, a notch down from a rise of 1.6 percent posted in the third quarter.

"We have been expecting that this year will be year of Renminbi appreciation".

The crackdown on a solution in many northern industrial cities has also hit output and employment in steel and other metal processing sectors.

Chinese Communist Party leader Xi Jinping told the same story at a political function in Beijing on Monday, ostentatiously telling top officials to focus on "defusing major risks to ensure sustained and healthy economic development and social stability", as the state-run Xinhua news service put it.

The country's economy also faces other challenges, including a debt pile at more than 300 percent of GDP and decreased public investment.

Meantime, a downturn in iPhone sales in China has hurt Apple Inc.'s share price this month and raised question marks over whether the consumer can keep cushioning the economy's re-balancing.

The second world economy has slowed down for some time.

However, experts said China's main pressure comes from how to unleash the potential of its market via deepening economic reforms.

"China's labour participation rate is not considered low worldwide, more than 700 million of our 900 million people (of working age) are employed, and there is still room (for growth)", he said.

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