China's economy expands 6.6 pct in 2018

China's economy expands 6.6 pct in 2018

China's economy expands 6.6 pct in 2018

China´s economy grew at its slowest pace in nearly three decades in 2018, losing more steam in the last quarter as it battles to quell massive debt and a USA trade war, official data showed Monday.

The number of babies born past year fell to 15.23 million, down by some two million from 2017, data from the National Bureau of Statistics showed on Monday (Jan 21).

But in a surprising remark, Fang Xinghai, vice-chairman of China's Securities Regulatory Commission, told a seminar in Davos that he expected economic growth to slow to 6 percent this year from 6.6 percent in 2018, stressing China's slowdown won't be a "disaster".

The sector - accounting for 8 per cent of the economy - grew 6.1 per cent in Q4, accelerating from the previous quarter's 2.5 per cent growth.

Last July, a top political advisory body warned that China's labor supply will fall by 100 million every 15 years after 2020, urging the government to enact more incentives for having children. But exports contracted more sharply than forecast in December as the penalties began to depress demand.

China's birth rate last year fell to its lowest in 60 years despite the abolition of the one-child policy, official data showed on Monday.

Trade negotiators are facing an early March deadline and Washington has threatened to sharply hike tariffs on Chinese goods if there are no substantial signs of compromise from Beijing.

CHINA'S ECONOMY: The 6.6 percent expansion of the world's second-largest economy was down from 2017's 6.9 percent and the weakest since 1990.

The economic report comes just hours after Beijing unveiled a potential trade deal with the United States; vowing to increase imports and eliminate the US-China trade deficit by 2024.

Experts say policies favoring state-owned enterprises over private companies have also prevented sustainable growth. Its GDP increased by Rmb7.3 trillion ($1.08 trillion) past year, capping at Rmb90 trillion ($13.26 trillion).

Warnings that China's slowing economy may soon have a serious effect further afield came from a poll of 38 economists carried out by Reuters. "We believe deregulating the property markets in big cities is the key to unlocking a growth recovery", said analysts from Nomura.

In a comment to the Financial Times earlier this month, Fred Hu, the former Greater China chairman for Goldman Sachs, said: "Domestic sentiment is definitely very bad, perhaps even worse than during the 2008 global financial crisis".

Berlin-based think tank Mercator Institute for China Studies, published a report January 10 projecting that if the trade dispute can't be settled, China's export sector could "take an immediate hit, leading to mass layoffs of workers". Government officials said all future manufacturing activity data would be issued by the National Bureau of Statistics.

"The slowdown in credit growth is causing economic momentum to falter", said Mark Williams, chief Asia economist at Capital Economics, in a note last week.

The world's second-largest economy is on a long-term slowing trajectory as it shifts from the investment-led model of the past while carrying a heavy debt load.

A cooling Chinese economy could hurt companies from iPhone maker Apple in the U.S. and carmakers in Europe to mineral exporters in Australia.

"Growth will remain under pressure in the coming months", Louis Kuijs of Oxford Economics said in a report.

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