China’s economy slowed dramatically during 2018, dropping to its lowest point in nearly 30 years as the communist country continues battling a prolonged tariff fight against President Donald Trump.
The 6.6 percent growth rate reported Monday is the slowest annual pace China has recorded since 1990. The downturn deepened in the final months of 2018, suggesting the Trump administration’s imposition of tariffs on Chinese goods is having an effect. The president imposed the protectionist policies in November of last year.
Many private makers of electronics, textiles and auto parts in the tech center of Shenzhen furloughed workers more than two months before the Lunar New Year holiday, according to local officials. Guangzhou, meanwhile, saw growth slump to 6.5 percent last year as trade tension slam the city’s manufacturing sector hard.
“The economy faces downward pressure,” Ning Jizhe, head of the National Bureau of Statistics, said at a news conference Monday. He pointed to “complicated and severe external environment,” effectively acknowledging the effect of Washington’s trade conflict. Other Chinese analysts were more dower.
China’s President Xi Jinping applauds during a celebration meeting marking the 40th anniversary of China’s “reform and opening up” policy at the Great Hall of the People in Beijing on December 18, 2018. (WANG ZHAO/AFP/Getty Images)
Lu Bing, a manager at a clothing shop in Yancheng, said its sales dropped as much as 30 percent in 2018. “It was a terrible year, and it doesn’t look like things are getting any better this year,” Lu told reporters. China is doing everything it can to forestall the downturn, according to some media reports.
Chinese leaders are pledging more tax cuts while easing up on their battle against debt. Lawmakers are also allowing local governments to issue bonds to help boost employment and stimulus. (RELATED: China’s Manufacturing Takes A Dive As Trump’s Main Negotiator Pushes The POTUS To Stay The Course On Beijing)
Trump has hinted recently that the two sides are in the process of turning a corner. He reached a major agreement with Chinese President Xi Jinping during a Dec. 2 meeting ahead of a G-20 summit. The meeting temporarily staved off an escalating trade battle between the world’s two biggest economies.
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