Amid a trade war with the United States, Beijing has reported its slowest growth rate in nearly three decades. Experts say China will need to pass economic reforms to counter the problem.
The world’s second largest economy grew 6.6 percent in 2018, China’s statistics bureau said on Monday — the slowest rate since 1990.
Figures from the bureau also showed that the economy grew by 6.4 percent in the final quarter of 2018.
US trade war
One reason for China’s slow growth has been the country’s trade war with the United States. Both countries have slapped billions of dollars worth of tariffs on each other’s goods and are currently negotiating a deal to end the dispute.
Analysts fear that China’s growth could take another hit if a three-month ceasefire ends in March without any deal in place.
“The trade war is currently making itself felt above all in growing uncertainty,” said China expert Max Zenglein from the Mercator Institute. “Weak exports and investment restraint are already having an impact on growth,” he added.
The country’s economy also faces other challenges, including a debt pile at more than 300 percent of GDP and decreased public investment.
Experts say policies favoring state-owned enterprises over private companies have also prevented sustainable growth.
Premier Li Keqiang has also vowed to keep economic growth within a “reasonable range” by promoting more innovation.
Beijing has also said it will pass other measures to stimulate growth, including cutting taxes and making it easier for banks to lend.
“While the government is putting policy responses in place, we anticipate that these will need to be ramped up over the course of the year,” said Stephen Chang from Pacific Investment Management.
law/amp (AFP, dpa)