China’s economic growth has slowed down. The country has just experienced its slowest economic growth rate since 1990 causing a wave of fear that the decline will negatively impact the international economy.
Official figures on Monday showed the weakest quarterly growth rate since the global financial crisis in 2008. In the three months forgoing to December, China expanded at 6.6% in 2018. A quarter before, the economy grew 6.5%; and a year before, economy growth was by 6.4%
While such economic development was foreseeable, the slowdown underlines current concerns about dwindling growth in the world’s second-biggest economy.
China’s expansionist approach has raised worries about the potential effects on the global economy. The ongoing trade war with the United States, which has put tariffs on both countries’ goods, has added to the depressed outlook.
While observers advise caution with the official GDP numbers from Beijing, the data is seen as a helpful indicator of the stagnating Chinese economy.
For several years has Beijing been indicating that an economic slowdown is happening, and it has therefore shifted its focus from quantity to quality of growth.
Chinese policymakers have put effort into moving away from export-led growth to growth which depends more on national consumption. Furthermore, they have been attempting to speed-up construction projects, cutting taxes, and reducing the level of bank reserves.
Companies worldwide have rang alarm over the critical market.
The technology giant Apple warned that China’s decline would affect its sales. Also, carmakers and other firms have address the issue and hope for the halt of the US-China trade war.
China’s economy covers a third of the global economy – making the world economy depend on China’s goods, trade, and exports.
Slower growth in China also translates to the difficulty of addressing the country’s debt burden. According to Bloomberg, the public and private debt burden lays by $34 trillion.
Capital Economics China economist Julian Evans-Pritchard said that China’s economy remained weak at the end of 2018 “but held up better than many feared”.
“Still, with the headwinds from cooling global growth and the lagged impact of slower credit growth set to intensify… China’s economy is likely to weaken further before growth stabilises in the second half of the year.”