Beijing, China’s economy grew by 6.1 per cent in 2019, the slowest rate in almost 30 years, against the backdrop of a trade war with the United States, according to official data.
According to DPA, the economy slowed from 6.6 per cent growth in 2018 but remained within the government’s target of 6 to 6.5 per cent growth, the National Bureau of Statistics said on Friday.
The gross domestic product (GDP) held steady at 6 per cent in the last quarter of the year but showed a decline from 6.4 per cent growth in the first three months of the year and 6.2 per cent growth in the second quarter.
Exports and investment showed an uptick in late 2019, as Washington and Beijing were putting the final touches on an agreement meant to halt their almost two-year-old trade war.
US President Donald Trump and Chinese Vice Premier Liu He signed the “phase one” of the trade deal in Washington on Wednesday.
The agreement staves off some tariffs and provides for China buying more US agricultural, energy and manufactured goods. But it also preserves the bulk of tariffs on about 370 billion dollars’ worth of Chinese goods.
“The signing of the ‘phase one’ agreement initially prevents the rapid deterioration of the relationship,” said Max Zenglein, a researcher at the Mercator Institute for China Studies in Berlin.
“But the increasing rivalry between the United States and China has not been resolved. It will continue to shape the relationship far beyond trade issues,” he said.
Trade between China and the US dipped by 14.6 per cent last year, while China’s overall foreign trade declined by 1 per cent.
China committed to purchasing a shopping list of US products worth about 200 billion dollars in the next two years, which might create issues with its other trading partners, experts say.
Moreover, the thorniest arguments between the two world powers, including China’s support of state-owned firms, have been postponed for a second phase of the agreement, which might conclude after the US presidential elections in November.
“There are certain things China will not respond to, such as structural adjustment,” said Huang Weiping, a professor of economics at Renmin University. “It is impossible to destroy state-owned enterprises in accordance with US requirements.”
Meanwhile, China’s economy also suffers from rising debt, which threatens the security of its financial system. The ruling Communist Party is under pressure to deliver good economic results ahead of the party’s centennial in 2021.
The party will want China’s strength to be celebrated at the centennial, Zenglein said.
“As a result, the government will pay even more attention to the slowing economy,” he said.
Source: Bahrain News Agency