China announced Monday that its official economic growth came in at 6.6 percent in 2018, the slowest pace since 1990.
Huileng Tan of CNBC.com had the news:
That announcement was highly anticipated by many around the world amid Beijing’s ongoing trade dispute with the U.S., its largest trading partner.
Economists polled by Reuters had predicted full-year GDP to come in at that pace, which was down from a revised 6.8 percent in 2017.
Fourth quarter GDP growth was 6.4 percent, matching expectations. That was a decline from the 6.5 percent year-over-year growth in the third quarter of 2018.
There were a few bright spots in Monday’s batch of official Chinese economic data.
Industrial output grew 5.7 percent in December from a year earlier — beating economists’ expectations of 5.3 percent growth — outpacing November’s 5.4 percent growth.
Lingling Wei of The Wall Street Journal reported that the jobless rate in China has risen:
Adding to the gloom was the trade conflict with Washington. The uncertain outlook for Chinese exporters caused companies to delay investing and hiring and in some cases even to resort to layoffs—a practice often discouraged by China’s stability-obsessed Communist Party rulers. The official jobless rate ticked up to 4.9% last month from 4.8% in November.
In the southern technology and export-manufacturing center of Shenzhen, for instance, many private makers of electronics, textiles and auto parts furloughed workers more than two months before the Lunar New Year holiday, which begins in February, according to business owners and local officials. The neighboring city of Guangzhou saw growth slump to 6.5% last year—well short of the 7.5% annual target set by the city government—as trade tensions hit the city’s manufacturing sector hard.
Some economists and investors have said China’s economy is far more anemic than the government’s 6.6% rate of expansion for 2018. They note the government’s move on Friday, just ahead of Monday’s data release, to cut the 2017 growth rate to 6.8% from 6.9%, which they said provides a slightly lower base, giving a slight boost to the fresh 2018 data.
Lin Jinbing of Caixin Global reported that consumption growth picked up:
Retail sales, which include spending by governments, businesses and households, grew 8.2% year-on-year in December, edging up from an 8.1% rise the month before, NBS data showed.
Year-on-year growth in value-added industrial output, which measures production in factories, mines and utilities, picked up to 5.7% in December from November’s 5.4%.
“Conditions improved somewhat in December, but we expect the uptick in industrial output and consumer spending to prove short-lived,” Julian Evans-Pritchard, an economist at research firm Capital Economics, said in a note.
China’s annual GDP growth for the past year falls within Beijing’s projection of “around 6.5%,” as the country has been making efforts to shift from high-speed economic growth to high-quality growth and to rely less on investment. This is reflected in NBS data, which show that the contribution of final consumption expenditure to GDP growth reached 76.2% last year, up 18.6 percentage points from 2017.
