With a trade war with the U.S. weighing on the Chinese economy, economic expansion in China hit a pace not seen in close to three decades. reported The Wall Street Journal.
According to the report, China’s growth rate for last year was 6.6 percent, which is the slowest pace of growth since 1990 when China began recording that data. The economic downturn got worse in the fourth quarter of last year with growth of 6.4 percent compared to 2017. In addition to a steeper slowdown in the economy than expected, the trade war has added to the malaise. With uncertainty about exports, companies put off investing and hiring — and in some instances engaged in layoffs. As a result, the rate of those without jobs increased to 4.9 percent in December compared to 4.8 percent in November. The Wall Street Journal pointed to the tech and export manufacturing area of Shenzhen as one example. A lot of the private electronics, textile and auto companies have furloughed employees ahead of the Lunar New Year holiday, which kicks up in February. Meanwhile, Guangzhou, another nearby city, had economic growth of 6.5 percent in 2018, which was under its annual target of 7.5 percent growth. The paper said the trade war is hurting the manufacturing sector in the city particularly hard.
“The economy faces downward pressure,” said Ning Jizhe, head of the National Bureau of Statistics, at a news conference covered by the WSJ. He blamed the “complicated and severe external environment” and pointed to pressure caused by the trade fight with the U.S. He did note that “the economy overall is driven by domestic demand.” The WSJ noted that the data released Monday (January 21) showed that three-quarters of the consumption was by individuals, households, and government. Still, the paper noted that big-ticket investments on the part of government and businesses aren’t as high as in the past and property sales are slowing.