China’s economic growth weakens
BEIJING >> China’s economic growth sank to a new multi-decade low in 2019 as Beijing fought a tariff war with Washington, but forecasters said a U.S.-Chinese trade truce might help to revive consumer and business activity.
The world’s second-largest economy grew by 6.1%, down from 2018’s 6.6%, already the lowest since 1990, government data showed Friday. Growth in the three months ending in December held steady at the previous quarter’s level of 6% over a year earlier.
Business sentiment received a boost from Wednesday’s signing of an interim deal in the costly war over Beijing’s technology ambitions and trade surplus. The Trump administration agreed to cancel planned tariff hikes on additional Chinese imports and Beijing promised to buy more American farm goods, though punitive duties already imposed by both sides stayed in place.
The Chinese downturn might not have bottomed out yet, but improved activity in December suggested the cooling of tensions might be encouraging companies and consumers to spend and invest, private sector economists said.
The agreement “is a signal that the situation is unlikely to deteriorate,” said Chaoping Zhu of J.P. Morgan Asset Management in a report.
“Corporate confidence keeps improving,” said Zhu. That might help to “provide strong support” to economic growth.
Chinese exporters have been battered by President Donald Trump’s tariff hikes, but a bigger blow to the economy came from weakness in consumption.
Households, spooked by the trade war and job losses, put off big purchases.
Auto sales fell for second year in 2019, tumbling 9.6%. Growth in retail spending decelerated to 8% over a year earlier, down from 8.2% in the first nine months of the year.