China’s 2019 economy records weaker growth

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China’s economic growth

BEIJING (Reuters) – China’s economic growth slowed to its weakest level in nearly 30 years in 2019 amid the trade war with the United States, and more stimulus is expected this year as Beijing tries to boost investment and demand.

But data released on Friday also showed that the world’s second largest economy ended the year a little firmer after the trade truce revived business confidence and growth measures finally seem to have started to take effect.

Crescimento econômico da China
Homens conversam em restaurante da área empresarial central de Pequim. REUTERS/Jason Lee

As expected, China’s growth slowed to 6.1% last year from 6.6% in 2018, data from the National Statistics Agency showed. Although still strong by global standards, and within the government’s target, it was the weakest expansion since 1990.

This year is crucial for the Communist Party to meet its goal of doubling gross domestic product (GDP) and revenue in the decade by 2020, turning China into a “moderately prosperous” nation.

Fourth-quarter GDP rose 6.0 percent from a year earlier, stabilizing from the third quarter, although still the weakest in nearly three decades. And industrial production, investment and retail sales rose more than expected in December.

In the quarterly comparison, growth between October and December was 1.5%, the same pace as the previous three months.

Sources told Reuters Beijing plans to set a lower growth target of about 6% this year from 6% to 6.5% last year, with higher infrastructure spending to contain a deeper slowdown. The goals should be announced in March.

Industrial production grew 6.9% in December over the previous year, the strongest pace in nine months, while retail sales advanced 8.0%. Investment in fixed assets rose 5.4% year-on-year.