Chinese economic growth falls to 6.2% as global slowdown bites

Daniel Fowler
July 15, 2019

China's economy slowed to the weakest pace since quarterly data began in 1992 amid the ongoing trade standoff with the USA, while monthly indicators provided signs that a stabilisation is emerging.

China's retail sales of consumer goods rose 8.4 percent year on year in the first half of 2019 to 19.52 trillion yuan (2.85 trillion USA dollars), the National Bureau of Statistics (NBS) said Monday. This article is strictly for informational purposes only.

"Economic conditions are still severe both at home and overseas, global economic growth is slowing down and the external instabilities and uncertainties are increasing", said NBS spokesman Mao Shengyong.

In some provincial cities, including Nanjing and Hangzhou, local regulators have guided banks to raise interest rates on home loans in June, Chinese media have reported.

Industrial output climbed 6.3% from a year earlier, data from the National Bureau of Statistics showed, picking up from May's 17-year low and surpassing a forecast for 5.2% growth.

"Businesses remain skeptical that the two countries will reach a broader trade agreement and recognise that trade tensions may escalate again", he added.

Leaders of the United States and China agreed in late June to try to get trade talks back on track after negotiations broke down in May, and Washington said it would hold off on additional tariffs.

With this year marking the 70th anniversary of the People's Republic of China founding, politics necessitates healthy growth, said Raymond Yeung of ANZ bank.

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The dollar index fell for three days in a row on prospects of an interest rate cut by the U.S. Federal Reserve later this month.

High-level trade talks to resolve the issues resumed this month, but the gulf between the two sides remains wide.

The contribution from net exports will decline as domestic demand gradually recovers, Zhu told the official Financial News ahead of the Q2 data, adding that he expects economic growth to slow to 5.8% next year. Sales of automobiles surged 17.2% in the month, accelerating from a 2.1% gain in May.

Alongside GDP, China will also publish activity data for June including retail sales, industrial production and urban investment, which could give more clues on whether earlier support measures are starting to kick in, or if more policy easing is needed.

Some analysts, however, questioned the apparent recovery in both output and sales.

Equity markets were choppy in the wake of the Chinese data as some expected Beijing might temper further stimulus.

Mounted-asset investments for the primary half of the 12 months rose 5.8% from a 12 months earlier, in line with information printed by the Nationwide Bureau of Statistics, in contrast with a 5.5% rise forecast by analysts. Property development investment slowed for a second month in June, dragging down the growth of newly started property construction and inventory.

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