India need not seek solace in China's growth slowdown

Daniel Fowler
January 17, 2020

China's economy weakened to its slowest pace in three decades in 2019 as weaker domestic demand amid a bruising trade war with the United States took their toll, official data showed on Friday (Jan 17).

China's birthrate dropped previous year to its lowest level since the formation of the People's Republic of China in 1949, adding to concerns of a long-term challenge for the government, as the ageing society and shrinking workforce pile pressure on a slowing economy. According to it, the combination of fiscal stimulus and financial sector reforms, boosting investment and consumption, is expected to support a recovery in the economic growth.

Ning noted that per capital GDP in China had surpassed $10,000 for the first time previous year.

He added that there were more sources of instability and risk, with the economy facing "mounting downward pressure".

China's economy stabilized last quarter after slowing to the weakest pace in nearly three decades, with the first acceleration in investment since June signaling that a firmer recovery could be underway.

Chinese stocks inched higher and the offshore yuan gained, trading at US$6.8715 at 10:48 Shanghai.

US-based academic Yi Fuxian, senior scientist at the University of Wisconsin-Madison, told the AFP news agency that even though China has abolished its One Child Policy, there has been a shift in the mindset of the population, with people now used to smaller families.

"The phase one deal is only an interim agreement between China and the US".

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"Consumer spending has yet to pick up the baton from investment as an engine of growth", said Diana Choyleva, chief economist at Enodo Economics.

"In the bilateral evaluation and dispute resolution chapter, the agreement also makes it clear that, if the concerns can not be resolved, the two parties hold the right to suspend an obligation, adopt a remedial measure, or in the worst case, withdraw from the agreement", he told the South China Morning Post.

The headline figure was in line with forecasts of the International Monetary Fund and the World Bank for China's economic growth this year, the Post report said.

China's per capita disposable income stood at 30,733 yuan (4,461.95 USA dollars) in 2019, up 5.8 per cent year on year in real terms, according to official data released by the NBS.

By 2020, China aims to double the per capita income of its urban and rural residents from 2010 levels.

The NBS said 896.4 million people were of working age between 16 and 59 in 2019, a drop from the 897.3 million in 2018.

Real estate investment rose 9.9% in 2019 from a year earlier, slowing slightly from a 10.2% gain in the first 11 months of the year.

Industrial output grew 6.9pc from a year earlier, the strongest pace in nine months, while retail sales rose 8.0pc.

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