China economy reports lowest GDP growth on record for second quarter as US trade war bites

China’s economy grew by 6.2 per cent in the second quarter of 2019, the lowest figure since records began in March 1992, but other data for June better than expected

While this falls within Beijing’s GDP target for the year of between 6 to 6.5 per cent, it also shows the pressure the economy is under with the US trade war ongoing

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Investment in property development grew by 10.9 per cent in the first half of the year, down from 15.8 per cent in the year to May. Photo: Reuters

Published: 10:00am, 15 Jul 2019Updated: 11:07am, 16 Jul 2019

China’s economic growth slowed to a record low of 6.2 per cent in the second quarter of 2019 as the shock from the protracted trade war with the United States continued to resonate through the world’s second largest economy.

Gross domestic product (GDP) growth slid from 6.4 per cent in the first quarter, according to data published by the National Bureau of Statistics (NBS) on Monday. Even during the global financial crisis in 2009, China’s quarterly GDP growth did not dip below 6.4 per cent.

The figure, nonetheless, falls within the range of Beijing’s target growth rate for the year of between 6.0 to 6.5 per cent and was generally expected. The median forecast of a poll of analysts conducted by Bloomberg was 6.2 per cent, but some had predicted worse, with many having deep concerns about the effect of the trade war.

The data also showed that over the first half of the year, China’s economy grew by 6.3 per cent.

“The economic data is still facing downturn pressure [in the second half of the year]. While there are also many positive factors, the market vitality is gradually being stimulated,” said NBS spokesman Mao Shengyong.

Other data released on Monday, mostly for the month of June, was better than expected. Industrial production – a measure of the output of the industrial sectors in China’s economy, including manufacturing, mining and utilities – grew by 6.3 per cent from a year earlier.

This was up from 5.0 per cent growth in May, which was the lowest since February 2002, and well above the expectations of a poll of economists, which had predicted 5.2 per cent growth.

Within industrial production, manufacturing grew by 6.2 per cent year-on-year, up from 5.0 per cent in May. This beat expectations, and contrasts sharply with the weak sentiment among manufacturers surveyed in June’s purchasing managers’ index.