Where is the direction of the Chinese economy?


The economic slowdown in China will continue to mark a milestone in 2019, after its economy recorded a 6.6% growth last year, the slowest progress since 1990. Although the increase in GDP in 2018 is above the minimum floor of 6.5%, it was established by Beijing and continues expansion to a total of US $ 13.2 billion (million million), which is equivalent to 44 times the size of the Chilean economy, worried that the process would get out of control by hitting the good part of the world.

In this case, and given the GDP figures, on Monday Donald Trump said via twitter that "it makes sense for China to finally make a real deal and stop playing" with the US.

Even though in Asia the figure was received in line with market expectations (Shanghai rose 0.56%), economists consulted by PULSO anticipated that the slowdown in the Asian giant will continue this year, despite differing opinions regarding the magnitude and control that authorities will have from this process.

Tuuli McCully, economist for Asia Pacific at Scotiabank, estimates that China's growth will average 6.2% in 2019, while he expects "that the government will set a target (in March) at 6% – 6.5%." In this context, he anticipates that "new stimulus measures will be announced in the coming months, both fiscal and monetary," with the aim of "maintaining economic and social stability and meeting income goals for the end of the decade"

Considering that these measures were implemented, Rajiv Biswas, economist at IHS Markit, believes that economic growth will decline this year to 6.3%.

In his case, the tone of the 2018 analysis of results was positive, highlighting that the increase in GDP was 6.4% in the last quarter of last year. "Chinese growth has been resistant to increasing winds against commercial wars," which increased during the second half of last year, shows.

However, he stressed that the most relevant risk for the Asian giant came from this year. The country's prospects will be damaged "if a temporary ceasefire ends without a commercial agreement is reached," Biswas said.

Meanwhile, Shehzad Qazi, executive director of China Beige Book International, presented a more grim picture. Indicates that "all indicators are heading towards a more difficult 2019", the context in which the stimulus that markets bet will not be enough.

"Our independent data shows that there have been three consecutive quarters of clandestine easing by the Chinese central bank (PBOC) and growth has not been achieved," Qazi said.


Source link