Economic growth fell to 6.4% in Q4, with the full-year figure down to 6.6% from 6.8% in 2017, according to data from China’s Bureau of Statistics (NBS). This was the lowest growth figure since 1990, when the country faced sanctions following the Tiananmen Square protests and their aftermath.
Per capita disposable income, meanwhile, was up 6.5% year-on-year to an average of 28,228 yuan ($4,165), the NBS said.
At the same time, consumer spending had risen in towns and cities last year by 6.8% year-on-year to 26,112 yuan ($3,784), a 0.9 percentage point higher rate than the previous year, China Daily reported.
But it was consumers in rural China whose spending showed a really big leap – the average spend for the year was 12,124 yuan per head ($1,757), up 10.7% from the previous year.
Overall retail sales grew by 6.9% year-on-year to 38.1 trillion ($3.5 trillion); online retail sales rose 24% to 9 trillion yuan ($1.3 trillion).
But observers say the US-China trade war is now hitting consumer sentiment, as well as capital spending. There have now been three consecutive quarters of slowing GDP growth in China, stoking fears of the impact on the global economy, and increasing pressure on Beijing to act to boost consumer and business sentiment and spending with measures including easing credit restrictions, cutting taxes and state spending.
Warnings that China’s slowing economy may soon have a serious effect further afield came from a poll of 38 economists carried out by Reuters. A clear majority said the chances of Japan going into recession this year had risen.
Japan is feeling the indirect effects of the US-China trade spat because it exports equipment and supplies used by Chinese makers of semiconductors, mobile phones and many other products.
“The US-China trade conflict discourages China’s capital spending, which is casting a shadow over Japan’s economy via a slowdown in exports of capital goods,” Shigeto Nagai, head of Japan economics at Oxford Economics, told Reuters.
There were also wider worries about the global economy slowing, including the uncertainty about Brexit, analysts said.
Sourced from China Daily, Reuters; additional content by WARC staff