China’s economy continues to soften as trade war takes its toll
The economy grew 6.4% and 6.2% in the first and second quarters of 2019, respectively, according to National Bureau of Statistics
CHINA released third-quarter GDP figures on October 18 showing the economy grew 6.0% from a year ago.
China’s statistics bureau says the economy grew 6.4% and 6.2% in the first and second quarters, respectively, from a year ago, indicating the country’s trade war with the US is taking its toll.
“As widely expected, China’s economy continues to soften – today’s report showed GDP growth edged down to 6.0% yoy in 3Q19, missing the market expectation and signalling the continuous pressure on Chinese economic growth,” says J.P. Morgan Asset Management Global Market Strategist Chaoping Zhu.
“Stocks today rose in reaction to the GDP numbers, suggesting the market is already pricing in the expectation of stronger stimulus policies to support the economy,” he adds.
The data released on Friday by the National Bureau of Statistics (NBS) showed that there were some bright spots, with retail sales, a key metric of consumption in the world’s most populous nation, up 7.8% from a year ago and industrial output rising 5.8% in the same period.
Fixed asset investment also rose by 5.4% from January to September. However, imports fell by 8.5%, which suggested that all is not well in China’s consumer and manufacturing markets.
“Fiscal stimulus and liquidity supports will be essential for economic stability in the coming months. The Fourth Plenum of the CCP 19th Central Committee, to be held before the end of October, might set the tone for economic policies, including short-term stimulus and long-term reform initiatives, and also reveal some clues for China’s stance in trade negotiation,” adds Zhu.
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18 Oct 2019