As the Chinese economy sets itself up to tackle slump in domestic demand and US trade tariffs, the country has apparently lowered its economic growth target for 2019 of 6 to 6.5 percent against last year’s target of “around” 6.5 percent, according to a report published by news agency Reuters.
The report cited four sources with knowledge of the annual closed-door Central Economic Work Conference in mid-December where the top leaders of the country were present, saying that the decision to lower the target was taken at the meeting and is likely to be announced at the annual parliamentary session in March.
It is expected that a growth rate of 6.6 percent in 2018 for the Chinese economy would be showed by data to be released later this month. That rate of growth would be the lowest for the economy since 1990. According to analysts, there would be a further drop in growth in the current year before the effects of policy and support measures kick in on the economy.
“It’s very difficult for growth to exceed 6.5 percent (this year), and there could be trouble if growth dips below 6 percent,” said of the sources according to the Reuters report.
According to the sources, a close watch on the levels of employment in the country are being kept by the top leaders of the world’s second-largest economy because factories could be forced to cut down on workers because of a slump in domestic demand and to counter the impact of the trade war with the United States. Analysts said that despite the service sector doing well, the domestic economy has failed to pick up because of slow manufacturing growth.
The Communist Party of the country had set itself a long term target of the doubling gross domestic product and incomes of Chinese within the decade to 2020 as well as to transform China in to a “modestly prosperous” country and that achieving that target would require the economy to grow at about 6.2 percent in the next two years.
“Considering employment, income and stability, we need growth of at least 6 percent this year,” said one of the sources according to Reuters.
Even as uncertainties because of the tariff war between China and the United Sates cloud the Chinese economy, there would be some room for maneuvering for the policy makers in China through the adoption of a range as a target. Both China and the US has just concluded a three day trade negotiation round on trade which has been termed to be positive by both sides.
Even though there has been some downward pressure on prices, the Chinese government wants to maintain consumer inflation target for 2019 at 3 percent. That would give the policy makers some scope to initiate measures to stimulate weaker consumption. In December, the consumer inflation of the economy dropped to 1.9 percent compared to 2.2 per cent in November according to data released earlier this week and that rate is well below the full-year target of the Chinese government.
(Source:www.reuters.com)
The report cited four sources with knowledge of the annual closed-door Central Economic Work Conference in mid-December where the top leaders of the country were present, saying that the decision to lower the target was taken at the meeting and is likely to be announced at the annual parliamentary session in March.
It is expected that a growth rate of 6.6 percent in 2018 for the Chinese economy would be showed by data to be released later this month. That rate of growth would be the lowest for the economy since 1990. According to analysts, there would be a further drop in growth in the current year before the effects of policy and support measures kick in on the economy.
“It’s very difficult for growth to exceed 6.5 percent (this year), and there could be trouble if growth dips below 6 percent,” said of the sources according to the Reuters report.
According to the sources, a close watch on the levels of employment in the country are being kept by the top leaders of the world’s second-largest economy because factories could be forced to cut down on workers because of a slump in domestic demand and to counter the impact of the trade war with the United States. Analysts said that despite the service sector doing well, the domestic economy has failed to pick up because of slow manufacturing growth.
The Communist Party of the country had set itself a long term target of the doubling gross domestic product and incomes of Chinese within the decade to 2020 as well as to transform China in to a “modestly prosperous” country and that achieving that target would require the economy to grow at about 6.2 percent in the next two years.
“Considering employment, income and stability, we need growth of at least 6 percent this year,” said one of the sources according to Reuters.
Even as uncertainties because of the tariff war between China and the United Sates cloud the Chinese economy, there would be some room for maneuvering for the policy makers in China through the adoption of a range as a target. Both China and the US has just concluded a three day trade negotiation round on trade which has been termed to be positive by both sides.
Even though there has been some downward pressure on prices, the Chinese government wants to maintain consumer inflation target for 2019 at 3 percent. That would give the policy makers some scope to initiate measures to stimulate weaker consumption. In December, the consumer inflation of the economy dropped to 1.9 percent compared to 2.2 per cent in November according to data released earlier this week and that rate is well below the full-year target of the Chinese government.
(Source:www.reuters.com)
