Daily US Times, Beijing: China’s economic growth last year hits the lowest points in 30 years. Official data shows the country’s economy expanded by 6.1% in 2019 from the year before – the worst figure in 29 years.
The world’s second-biggest economy has faced weak domestic demand and the impact of the bitter trade war with the US.
The Chinese government has taken several steps in the last two years to boost its economy.
Earlier this week, Beijing signed a ”phase one” trade deal with Washington. But experts are still concern about how the deal could make China out of its destressed time.
China is taking more steps to overcome low growth. The government is allowing local governments to sell large amounts of bonds to fund their infrastructure programmes.
Banks of China are encouraged to lend more, especially to small firms. Last year, new loans in the local currency hit a record high of $2.44 trillion (£1.86tn).
The Chinese economy also facing a record low levels of investment. A country, which saw double-digit percentage growth in the first decade of the 21st Century is passing a remarkable low time now.
Though 6.1% expansion rate is the lowest for China in three decades, it is still much higher than other leading economies.
According to the prediction of the US central bank, the American economy will grow by around 2.2% this year.
The trade war was helpful?
In many developed economies, slowest GDP growth in thirty years could make the country panicked. But here, China is an exception.
Softening domestic demand and US tariffs have eaten into growth, that is true, but some analysts argue that the trade war may have actually helped the Chinese economy.
Chinese policy makers have been trying to gradually step down expectations for years.
They’re trying to break away from the years of unsustainable breakneck growth which has trashed the natural environment and led to an explosion in unserviceable debt.
But on bank loans, the crucial question will be – who gets access to the loans?
Will it be those building the “bridge to nowhere” vanity projects which have popped up in many regional cities?
What’s in the deal?
China has agreed to import at least $200bn from the US. The agreement shows China will boost purchases of agriculture by $32bn, manufacturing by $78bn, energy by $52bn and services by $38bn.
The country has agreed to take more action to prevent trade secret theft.
Under the agreement, the US will maintain up to 25% tariffs on an estimated $360bn worth of Chinese goods. In response to US tariffs, China also increased tariffs on $100bn worth of US products. The country is also expected to maintain the majority of them.