China's economic growth slowest since 1990 amid trade war with US

Roman Schwartz
January 22, 2019

Guangzhou, meanwhile, saw growth slump to 6.5 percent previous year as trade tension slam the city's manufacturing sector hard.

Premier Li Keqiang has also vowed to keep economic growth within a "reasonable range" by promoting more innovation.

China's population grew at a slower rate a year ago despite the abolition of the one-child policy, official data showed on Monday (Jan 21), raising fears an ageing society will pile further pressure on an already slowing economy. "The Chinese economy's resilience and ability to resist shocks and the long-term trend of stability has not and will not change", Ning Jizhe, commissioner of the National Bureau of Statistics, told reporters in Beijing. The downturn deepened in the final months of 2018, suggesting the Trump administration's imposition of tariffs on Chinese goods is having an effect. Fixed-asset investment growth was 5.9 per cent last year, 0.5 percentage point higher than the first three quarters of the year. Retail sales increased by nine percent in 2018 year-on-year, down from 10.2 per cent in 2017, the NBS said. But exports contracted more sharply than forecast in December as the penalties began to depress demand.

The two sides have imposed tariff hikes of up to 25 percent on tens of billions of dollars of each other's goods in the fight over US complaints that Beijing steals or pressures companies to hand over technology. But the slowdown has been sharper than expected, prompting Beijing to step up government spending and order banks to lend more to shore up growth and avoid politically risky job losses. Washington wants China to roll back plans for state-led industry development that its trading partners say violate its market-opening obligations.

Monday's new data confirming the slowdown of the economy came ahead of key talks between top trade officials from the United States and China in Washington on January 30 and 31.

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"The details show that the infrastructure investment is shaping up to be the engine for 2019".

Trump said Saturday that trade relations with China were "going very well" and "a deal could very well happen".

China consumes almost half the world's copper and the metal is considered a good barometer of economic conditions given its widespread use in power grids, communication networks, manufacturing and construction. That's the slowest growth rate in 28 years.

China's population growth rate continued to slow in 2018, spelling possible trouble ahead as a swelling number of retirees pushes up against a shrinking labor pool.

China has accounted for a third of global annual growth over the past decade too, and the world has relied on the country to pull the broader economy out of recession.

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