Published: Wed, January 23, 2019
Money | By Bruce West

Chinas economy grew at slowest pace in 28 years in 2018

Chinas economy grew at slowest pace in 28 years in 2018

Yet the pace at which population growth has slowed has become a concern in recent years as the country's seemingly inexhaustible supply of ready labor has declined.

China expanded at 6.6% in 2018, official figures out Monday showed.

Fixed-asset investment rose 5.9 percent in 2018, the slowest in at least 22 years, as a regulatory crackdown on riskier financing and debt weighed on local government spending early in the year.

The deteriorating situation in China, a market that businesses around the world rely upon for growth, is having a widespread impact.

Analysts have said that the Sino-U.S. trade war, now in a temporary truce, has affected and will continue to take a toll on China's domestic demand and job market, if not resolved.

There are also many doubts about the consistency and veracity of Chinese statistics, given that the governments of many provinces tend to inflate results.

Looking ahead, Ning Jizhe said China may face a more complicated and tough external environment for development in 2019, but the country has the foundation, condition, confidence and capability to keep economic growth within a reasonable range, ensuring sustained and healthy economic development. The speech by Xiang Songzuo, which AsiaNews will publish in the next few hours, has been censored on the internet. Steven Cochrane, chief Asia-Pacific economist at Moody's Analytics, told the South China Morning Post in October just how much the Chinese have to lose in an ongoing trade war.

That 6.9% figure was released almost a year ago and western analysts are suspicious that it was suddenly trimmed just before the release of what was expected to be a set of weak figures - which they were.

Communist leaders want to steer China toward slower, more self-sustaining growth driven by consumer spending instead of trade and investment.

AFPquoted analysts who believe "the worst is yet to come", as China's stock market gets more jittery, the currency grows weaker, infrastructure projects stall because government funds have been redirected to debt reduction, and consumers suffer from a combination of slow income growth and tight credit. The government estimates China's population will peak at 1.442 billion in 2029 before beginning to decline the year after. "Consumers are [already] feeling uncertain about next year, so they are going to pull back".

Forecasters expect Chinese growth to bottom out this year as Beijing's stimulus efforts gain traction.

For his global outlook, the Goldman economist said he sees little need for major changes to global forecasts even as the International Monetary Fund Monday cut its forecast for the world economy, predicting it will grow at the weakest pace in three years in 2019.

The number of babies born in 2018 fell by two million to 15.23 million, raising fears an ageing society will pile further pressure on an already slowing economy.

Due to the massive size of its market, China's slowdown is also bringing pain to companies and industries worldwide, including automakers such as Volkswagen AG and Toyota Motor Corp.

Total exports fell to Dollars 221.25 billion in December, down 1.4 per cent from November, and 4.4 per cent from the same month in 2017.

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