GDP in China
China - GDP
Economic growth slumps to near three-decade low in Q2 2019 as U.S. tariffs bite
In the second quarter of the year, the Chinese economy expanded at the weakest rate since at least 1992, when the National Bureau of Statistics (NBS) started to publish quarterly data. GDP expanded 6.2% in annual terms in Q2 2019, below both Q1’s 6.4% expansion and the 6.3% increase expected by market analysts. Nevertheless, growth is still within the government’s target of between 6.0% and 6.5% for 2019.
Although the NBS does not provide a breakdown of GDP by expenditure, additional data suggests that the trade war continued to weigh on exports and outweighed authorities’ efforts to stimulate the domestic economy. Moreover, growth in fixed-asset investment moderated in Q2, mostly reflecting weaker manufacturing investment. Conversely, growth in retail sales was robust in the quarter, suggesting that private consumption is likely supporting overall growth.
Seasonally-adjusted quarter-on-quarter GDP growth inched up from 1.4% in Q1 to 1.6% in Q2, while nominal GDP accelerated from a 7.8% year-on-year increase in Q1 to an 8.3% rise in Q2.
Although GDP growth slowed in Q2, economic indicators for the domestic economy firmed up in June. Against this backdrop, Ting Lu, Lisheng Wang and Jing Wang, economists at Nomura, comment that:
“Bulls might claim that this is a result of the resilience of the Chinese economy and the effectiveness of Beijing’s countercyclical easing measures. We recommend caution, as we see no strong signals that China’s economy bottomed out in June. And, like the blip of a recovery in March, the rebound of official activity data in June may not be sustainable. […] By taking lessons from their reactions to the March data, Beijing will likely interpret and respond to the June data with some extra caution. We believe activity data could drop again in the next few months and assign a high probability to an escalation of US/China trade tensions despite the recent agreement to renew trade negotiations. Thus, we find it quite likely that Beijing will step up policy easing/stimulus towards Q4 and end-2019.”
Looking forward, trade negotiations between China and the United States will continue to shape the economic outlook for the Asian giant. On this point, Yi David Wang, head of China economics at Credit Suisse, noted:
“We maintain our annual growth outlook at 6.2% for 2019. There might be upticks to IP momentum as authorities shift their reliance back to infrastructure and real estate. That said, unless a more permanent resolution to trade negotiation is achieved in a timely manner and authorities can improve credit allocation efficiency, the uncertainty impact will be an ongoing drag to China’s manufacturing sector.”
FocusEconomics Consensus Forecast panelists expect GDP to expand 6.3% in 2019, which is unchanged from last month’s estimate. In 2020, the panel foresees economic growth of 6.0%.
China - GDP Data
|Economic Growth (GDP, annual variation in %)||7.8||7.3||6.9||6.7||6.8|
5 years of economic forecasts for more than 30 economic indicators.
China GDP Chart
Source: National Bureau of Statistics of China and FocusEconomics calculations.
|Bond Yield||3.18||-0.40 %||Jul 31|
|Exchange Rate||6.88||-0.19 %||Jul 31|
|Stock Market||2,933||-0.34 %||Jul 31|
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August 20, 2019
While initially threatening to slap a 10% tariff on the remaining USD 300 billion of imports from China, U.S. President Donald Trump partially backed down in mid-August by postponing imposing tariffs on a list of consumer goods from 1 September to 15 December.
August 15, 2019
House prices in 70 large- and medium-sized cities rose 0.6% in July in month-on-month terms according to a weighted average index calculated by Thomson Reuters from data issued by the National Bureau of Statistics (NBS).
August 14, 2019
Industrial production increased 4.8% year-on-year in July, down from June’s 6.3% expansion.
August 14, 2019
Urban fixed asset investment expanded 5.7% year-to-date in July, slightly below the 5.8% increase in January–June and market expectations of a 5.8% increase. The result reflected a stronger contraction in the primary sector while growth in the tertiary sector slowed; however, investment growth in secondary sector accelerated.
August 14, 2019
In July, nominal retail sales grew 7.6% on an annual basis, down from the 9.6% increase in June and below market expectations of 8.6%.