Official figures show that the world's second largest economy expanded by 6.1% in 2019 from the year before - the worst figure in 29 years.To
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The country has faced weak domestic demand and the impact of the bitter
trade war with the US.The government has been rolling out measures over
the past two years in an attempt to boost growth.
It comes after almost two years of trade tensions with the US - although
hopes of a better relationship with America have seen improvements in
manufacturing and business confidence data.The government has used a
combination of measures aimed at easing the slowdown, including tax cuts
and allowing local governments to sell large amounts of bonds to fund
their infrastructure programmes.The country's banks have also been
encouraged to lend more, especially to small firms. New loans in the
local currency hit a record high of $2.44 trillion (£1.86tn) last year.
So far the economy has been slow to pick up, with investment growth falling to record low levels.
Historically, China has seen much stronger economic expansion, with the
first decade of the 21st Century seeing double-digit percentage growth.
But - although that 6.1% growth rate is China's weakest expansion in
almost three decades - it is much higher than other leading economies.
The US central bank, for example, has forecast that the American economy
will grow by around 2.2% this year.For many countries, having the
slowest GDP growth in three decades might cause panic - but not in
China.
Softening domestic demand and US tariffs have eaten into growth - but
some analysts argue that the trade war may have actually helped the
Chinese economy.
This 6.1% GDP figure for 2019 is not only within the government's target
range, but Chinese policy makers have for years been trying to
gradually step down expectations.
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.
The government has instigated some stimulus measures to make sure the
steam doesn't come out of the economy too quickly. 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?
Or will it be the promising new start-up enterprises which are seen as the future of modern Chinese development?
