In a year marked by an ongoing trade war, domestic slowdown and mounting corporate debt issues, China’s GDP achieved a 6.1 percent increase for 2019, marking the lowest such growth in 29 years. The fourth-quarter GDP growth was 6.0 percent, matching the previous quarter which was the lowest on record.
Despite being the lowest figure since 1990, 2019’s GDP fit within the target range of 6.0-6.5 percent set by the central government at the beginning of last year.
China also saw 5.7 percent growth in industrial production, which measures output from manufacturing, mining and utilities, and a 6.9 percent increase in its service sector, according to the National Bureau of Statistics. The consumer sector saw retail sales grow by eight percent, less than the nine percent in 2018. Investment in fixed assets, which refer to real estate development and machinery and equipment, increased by 5.4 percent.
Exports increased by five percent while imports grew by 1.6 percent, considerably lower than in previous years. Consumer prices went up by 2.9 percent while core CPI (consumer price index) excluding food and energy prices increased by 1.6 percent.
The nationwide per capital disposable income of residents increased by 8.9 percent, which was 0.2 percent more than for 2018. Rural households saw nominal 9.6 percent growth while urban households saw an increase of 7.9 percent. Monthly surveyed unemployment rates in urban areas remained between 5.0 and 5.3 percent.
The statistics were announced on January 17, two days after the US and China signed a first-phase deal that provided some relief to their ongoing trade dispute, though tariffs were left in place.
“Although the US government maintained most of the tariffs on Chinese products, the signing of the phase-one trade deal is a signal that the situation is unlikely to deteriorate. Against this background, corporate confidence keeps improving in the recent months. With the help of a long destocking cycle and capex downturn, the resuming confidence might catalyze a rebound in investment by manufacturers and private companies. In 2020, a synergy between the two factors might provide strong support to GDP growth,” says J.P. Morgan Asset Management global market strategist Chaoping Zhu.
Zhu expressed optimism for the Chinese economy for the near future. “From the perspective of investment, the declining economic and political uncertainties, as well as the ongoing capital inflow, might provide sufficient support to risk asset return in 2020. More importantly, when GDP per capita breaks US$10,000, there will be affluent long-term investment opportunities as the Chinese economy experiences fundamental structural changes.”
However, concerns still remain over aspects of China’s economy and society. The country also saw its lowest number of births in 70 years in 2019, at 14.65 million.