China's growth slows to 28-year low as trade war weighs

China's growth slows to 28-year low as trade war weighs

Growth slowed to 6.6 percent from 2017's 6.9 percent as both the world's appetite for China's exports and domestic consumer spending weakened, official data showed Monday.

The fourth quarter growth rate was down from 6.5 per cent in the third quarter, according to data released Monday by the National Bureau of Statistics, and matched the median forecast of 6.4 per cent from a Bloomberg survey of analysts.

Capital Economics estimates slower China expansion will shave about 0.2 percentage point off global growth this year, compared to 2018, while Citigroup Inc. warned in a January 14 note that the China slowdown may "blow the global economy off course".

Standard Chartered bank's global chief economist David Mann suggested that the Chinese government will not resort to any aggressive stimulus measures and will continue minor policy support measures to meet growth targets in 2019, while acknowledging the slowdown of the economy in the country.

Growth in 2018 was the lowest since 1990's 3.9 per cent in the aftermath of the violent crackdown on pro-democracy protests centred on Beijing's Tiananmen Square the year before.

The U.S. trade deficit with China grew to a record $323.3 billion in 2018.

But these measures have so far failed to reverse the slowdown which saw activity levels in manufacturing fall close to or just under contraction levels in December.

This came in the meeting of U.S. President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 summit in the Argentinian capital. They predict a further slowing to 6.3 percent this year.

China added more than 17 million people to its population in 2016 and 2017 following the scrapping of the one-child policy, but the effect hasn't endured.

"There is some risk of a hard Brexit, but we would really only put that at 10 percent", he said.

China's government raised the limit to two children in 2016 to rejuvenate the world's most populous country, which has almost 1.4 billion people, and experts say it may remove the cap next year.

With support measures expected to take some time to kick in, most analysts believe conditions are likely to get worse before they get better.

"The economy is going through a soft phase, with continued headwinds from slowing growth in credit, industrial profit and housing sales".

The low fertility rate, partly a result of over three decades of ruthless birth control by Beijing, showed that the Chinese leadership was too optimistic about the incentive provided by its relaxed birth policy.

"When China sneezes, the world catches a cold", according to one version of the old saying-and the country's economy appears to have at least a mild case of the sniffles.

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

Meantime, a downturn in iPhone sales in China has hurt Apple Inc.'s share price this month and raised question marks over whether the consumer can keep cushioning the economy's re-balancing.

As for the new economic engines for Chinese economy, he sees potential in the Greater Bay Area.

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