Trade

China’s Economic Growth Slows to 30 Year Low

JM Ashby
Written by JM Ashby

A lot of people who will read this report weren't even born yet the last time China's economy was this weak.

According to China's National Bureau of Statistics, the Chinese economy grew by just 6.1 percent last year; the lowest amount since George H.W. Bush was president.

BEIJING (Reuters) - China’s economic growth cooled to its weakest in nearly 30 years in 2019 amid a bruising trade war with the United States, and more stimulus is expected this year as Beijing tries to boost sluggish investment and demand. [...]

As expected, China’s growth slowed to 6.1% last year, from 6.6% in 2018, data from the National Bureau of Statistics showed. Though still strong by global standards, and within the government’s target range, it was the weakest expansion since 1990.

Trump will probably look at this headline and see it as a great victory and many other Americans may mistakenly feel the same way, but it's not.

China is the world's second largest economy behind the United States, but it's the largest consumer market in the world with a middle class population that is larger than the entire population of the United States. A weak economy in China means lower demand for American and other foreign-made goods and lower demand means fewer sales and fewer jobs. Americans should want to see every foreign economy do well because it means more opportunities to export goods and services.

A slowing economy in China will also make it more difficult for the nation to meet the purchasing targets agreed to in "phase one" of Trump's "biggest and greatest deal ever." China has ostensibly agreed to buy an additional $200 billion in American goods and services on top of what they already purchased in 2017 before Trump's trade war began, but China has also stated that those purchases will depend on "consumer demand and market conditions."

Those "market conditions" could turn out to be the slowest economic growth since the 1980s if things don't turn around in 2020, and weak consumer demand for things like American pork and soybeans will follow.

China's decline is our decline as well even if it makes Trump's lizard brain tingle.

  • muselet

    Donald Trump will present slower economic growth in China as proof that his endless, mindless trade war is working and will predict that the Chinese government will come groveling back to the negotiating table and give him everything he demands. Whether he also slaps new tariffs on everything imported from China is harder to predict.

    If I had to guess, I’d say he will (it’s the stupidest possible thing he could do, therefore that’s what he’s likely to do). As ever, I hope I’m wrong.

    –alopecia