China’s growth expected to weaken further this year and in 2020, as trade deal with US leaves tariffs in place

Analysts are rapidly revising down expectations for China’s 2019 and 2020 growth as the trade war with the United States drags on

China’s third quarter gross domestic product growth figure due on Friday is anticipated to slow to 6.1 per cent from the 6.2 per cent in the second quarter

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China’s official third quarter growth figure due Friday is expected to show the rate slowing from the second quarter. Photo: Xinhua

Published: 8:45pm, 17 Oct 2019Updated: 8:45pm, 17 Oct 2019

China’s growth outlook for the remainder of the year and into 2020 is expected to weaken further because of obstacles including drag from the ongoing trade war with the United States, analysts said.

While a tentative trade truce deal announced by US President Donald Trump last Friday postponed a tariff increase on Chinese exports set to take effect this week – and may do away with a new levy expected on December 15 if a final agreement is reached before then – it leaves in place tariffs on US$360 billion of Chinese goods, which will continue to weigh on the economy going forward.

The next mile marker in China’s economic slowdown will come on Friday, when the country reports third quarter growth. Analysts expect it to slow to 6.1 per cent from the 6.2 per cent rate seen in the second quarter, which was the lowest growth rate since the government started publishing quarterly gross domestic product (GDP) statistics in the first quarter of 1992.

If third quarter growth matches expectations, then barring a collapse in the fourth quarter, growth this year will fall within the government’s 6 to 6.5 per cent range, given it was recorded at 6.3 per cent in the first half of the year.

But analysts are rapidly revising down their expectations for 2020 below the lower end of this year’s growth range. Most forecasts put next year’s growth between 5.5 per cent and 5.9 per cent, with the International Monetary Fund’s just-released projection at 5.8 per cent.