China economy showing effects of trade war as growth slows again in November
- Retail sales growth slows to 8.1 per cent in November, lowest rate in 15 years
- Industrial production growth slows to 5.4 per cent in November, the lowest rate in 10 years
The Chinese economy weakened further in November, as the trade war with the United States continued to take a toll on growth, according to economic data released on Friday.
Retail sales growth decelerated sharply to 8.1 per cent from the 8.6 per cent rate in October, lower than the 8.8 per cent rate expected by analysts polled by Bloomberg. The November growth rate was the lowest since the 4.3 per cent gain posted in May 2003.
Industrial production grew 5.4 per cent in November compared to the previous year, well below the 5.9 per cent gain in October and expectation for a like-sized 5.9 per cent rise this month, according to the median forecast in a Bloomberg survey. The November growth rate was the lowest in 10 years, matching the 5.4 per cent gain in November 2008.
Fixed-asset investment was the lone bright spot in the data, growing 5.9 per cent in the January to November period, up from 5.7 per cent in the first 10 months of the year and slightly above expectations for a 5.8 per cent gain.
Property investment growth rate was stable at 9.7 per cent in November, indicating that government-mandated infrastructure investment has started to take effect.
Analysts predicted that growth will be hit hardest in the first half of next year when the full effect of US tariffs is felt.
The government will hold its Central Economic Work Conference starting next Tuesday to set the economic policy priorities for next year.
The meeting is expected to set a lower growth target for 2019 while approving greater fiscal spending, including a higher budget deficit than this year’s 2.6 per cent of GDP, as well as larger tax cuts than this year’s 1.2 trillion yuan (US$174 billion), are anticipated.
More monetary policy easing, including more cuts in bank’s required reserve ratio and possibly even a policy rate reduction, are also envisaged.