World-wide fears as China set to post slowest growth in 28 years

CHINA is expected to report today that economic growth cooled to its slowest in 28 years in 2018, amid weakening domestic demand and bruising US tariffs, adding pressure on Beijing to roll out more support measures to avert a sharper slowdown.

Growing signs of weakness in China – which has generated nearly a third of global growth in the past decade – are stoking worries about risks to the world economy and are weighing on profits for firms ranging from Apple to big carmakers.

Chinese policymakers have pledged more support for the economy this year to reduce the risk of massive job losses, but they have ruled out a “flood” of stimulus like that which Beijing has unleashed in the past, which quickly juiced growth rates but left a mountain of debt.

Analysts polled expect the world’s second-largest economy to have grown 6.4 percent in the October-December quarter from a year earlier, slowing from the previous quarter’s 6.5 percent pace and matching levels last seen in early 2009 during the global financial crisis.

That could pull 2018 gross domestic product (GDP) growth down to 6.6 percent, the lowest since 1990 and down from a revised 6.8 percent in 2017. 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.

Some analysts believe real growth levels are already much weaker than official data suggest.

Even if China and the US agree on a trade deal in current talks, which is a tall order, analysts said it would be no panacea for the sputtering Chinese economy unless Beijing can galvanise weak investment and consumer demand.

Chen Xingdong, chief China economist at BNP Paribas, said investors should not expect the latest round of stimulus to produce similar results as during the 2008-09 global crisis, when Beijing’s huge spending package quickly boosted growth.

“What China can really do this year is to prevent deflation, prevent a recession and a hard landing in the economy,” Chen said. On a quarterly basis, growth likely eased to 1.5 percent in October-December from 1.6 percent in the preceding period.

China will release its fourth-quarter and 2018 GDP data today, along with December factory output, retail sales and fixed-asset investment.

Sources have confided that Beijing was planning to lower its growth target to between 6 and 6.5 percent this year from around 6.5 percent in 2018.