China economy slows further, matching its lowest ever quarterly growth
- Given continued headwinds created by government campaign to reduce debt and risky lending, as well as US trade war, China reportedly will set a growth target range of between 6 and 6.5 per cent for this year
The Chinese economy slowed further in the fourth quarter, matching its lowest recorded reading, last reached during the global financial crisis in 2009.
The fourth quarter growth rate of 6.4 per cent, year on year, matched that of the first quarter of 2009, according to data released Monday by the National Bureau of Statistics.
That was the lowest growth rate since the Chinese government began publishing quarterly growth rates at the beginning of 1992. The 2009 reading occurred at the beginning of the global crash in markets, which sparked recessions throughout the West.
The fourth quarter rate was down from 6.5 per cent in the third quarter and matched the median forecast of 6.4 per cent from a Bloomberg survey of analysts.
For all of 2018, the Chinese economy grew 6.6 per cent, in line with the government’s target for growth of “about 6.5 per cent” for the year. Last year’s growth rate was down from 6.8 per cent in 2017 and was the lowest growth rate since 3.9 per cent, recorded in 1990.
Given the continued headwinds created by the government campaign to reduce debt and risky lending in the economy, as well as the trade war with the United States, the government reportedly will set a growth target range of between 6 and 6.5 per cent for this year. The growth target range will be released publicly at the National People’s Congress in early March.
Other data released Monday was downbeat.
Retail sales grew 8.2 per cent December compared to a year earlier, up from 8.1 per cent in November, which was the lowest growth rate in 15 years, since 4.3 per cent in May 2003. The retail sales growth rate was higher than expected, with analysts predicting a gain of 8.1 per cent, according to a Bloomberg survey.
Industrial product grew 5.7 per cent in December compared to a year earlier, up from 5.4 per cent in November, which was the lowest reading since November 2008.
The industrial production growth rate, which edged up 0.54 per cent month on month, was higher than expected, with analysts forecasting a gain of 5.3 per cent, according to a Bloomberg survey.
Fixed-asset investment rose 5.9 per cent in 2018 from a year earlier, down from 7.2 per cent in 2017 and lower than Bloomberg’s survey expectations of 6.0 per cent. Within fixed-asset investment, property investment grew 9.5 per cent over the course of 2018.
