China economy expanded at the slowest pace since the global financial crisis, as a domestic financial clean-up, weakening global demand and trade conflict with the U.S. all dampened momentum.
Gross domestic product rose 6.4 percent in the fourth quarter from a year earlier, matching economists’ estimates, and compared with 6.5 percent in the previous three-month period. In December, gauges of consumption and factory output accelerated, while investment held up.
The world’s second-largest economy is on a long-term slowing trajectory as it shifts from the investment-led model of the past while carrying a heavy debt load. The government’s control of that process is being tested by the standoff with U.S. President Donald Trump over trade at a time when the global expansion is already looking shakier.
Authorities have used an array of targeted and limited stimulus measures to try and revive optimism without resorting to massive stimulus, as they have in past downturns.
The trade conflict, debt curbs, slumping consumer confidence as well as a lack of “animal spirits” are all major headwinds the economy is facing this year, according to Stephen Chang, portfolio manager for Asia at Pacific Investment Management Co. in Hong Kong. "While the government is putting policy responses in place, we anticipate that these will need to be ramped up over the course of the year," Chang wrote in a note ahead of the data.
Source : Bloomberg