6.2 percent drop in China’s GDP in 2019
With continuous trade tensions and poor relationships with the US, China’s actual GDP growth is expected to dip to 6.2% in 2019 from 6.6 percent in 2018.
The ongoing US-China trade dispute is referred to as the prime cause of China’s shaken economy which is expected to remain the same in 2019. Chinese exports came down by 4.4 percent YoY in December 2018, which is worst since December 2016 as demands for goods dipped across the majority of its major trading partners. China is also now facing difficulty due to its state subsidies to state-owned enterprises (SOEs). Nevertheless, its politically susceptible trade surplus with US was recorded high of USD 323.3 b for 2018 which risks a further soreness of trade tensions.
The private consumption growth rate is envisaged to remain under heavy pressure due to ongoing imbalance in the economy. Retail sales growth slipped to 8.2 percent YoY in December 2018 compared to 9.4 percent YoY in 2017.
There is evident slowdown in retail sales growth in China and its export-oriented manufacturing sector too is facing shrinking orders. To recover its slowdown in economy, the Chinese government has announced that it will pursue further cuts to taxes and other business costs and release monetary policy to ensure adequate liquidity for private enterprises, especially the small and medium enterprises.China News Region