China notched its slowest expansion since the 2009 financial crisis last quarter amid a debt cleanup and trade woes, while signs of stabilization in December suggest government efforts to cushion the deceleration are beginning to take hold. Gross domestic product rose 6.4 percent in the fourth quarter from a year earlier 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 response with targeted stimulus measures 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. “Growth will improve from the second quarter onwards,” said Morgan Stanley’s Chief China Economist Robin Xing in an interview with Bloomberg Television in Hong Kong. “The greater the downward pressure on growth, the stronger the policy response will be.”
The data contributed to a continued rally in Asian stocks. Shares in Tokyo, Hong Kong and Sydney climbed after the S&P 500 Index hit its highest since early December on Friday. For the full year, the economy expanded 6.6 percent, the slowest pace since 1990 and in line with estimates. Although it has moderated significantly from the years of double-digit growth, China is still one of the fastest growing large economies and its larger size now means it remains the world’s growth engine.
China’s Economy Slows to the Weakest Pace Since 2009, Bloomberg, Jan 21
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