China Economic Outlook. First Quarter 2020

Chinese economic growth has slightly recovered in the last quarter of 2019, although it continued its medium-to-long-term slowdown trend amid unsettled trade war and domestic structural obstacles. The 2019 whole year GDP growth reached 6.1%, the lowest growth rate for the past three decades.

Key points

• Key points:
• The 2019 whole year GDP growth reached 6.1%, the lowest growth rate for the past three decades, but it is within the authorities’ growth target of “6-6.5%”.
• Chinese economic growth has slightly recovered in the last quarter of 2019, although it continued its medium-to-long term slowdown trend amid unsettled trade war and domestic structural obstacles.
• Chief among the positive factors for this round of economic recovery is the signing of China-US phase-one trade deal which achieved a temporary truce for the ever- escalating China-US trade war.
• However, more uncertainties might happen in the second half of this year as the US presidential campaign is bound to heat up toward the November election
• Moreover, China is still subject to a series of domestic structural problems such as serious overcapacity in certain industries, the indebtedness of the corporate sector and the shrinking room of monetary and fiscal policy. All of them will exert certain downward pressure on China’s growth going forward.

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