The Chinese economy is growing at a slower pace for nearly three decades. Against the backdrop of the US trade war and home problems, the second largest economy only recorded a 6.6% growth last year compared to the previous year. This was reported by the Beijing statistical office.
At the end of 2018, quarterly growth dropped to only 6.4% compared to the same period last year – a slow pace similar to last year after the global financial crisis. The outlook for the year started is therefore unfavorable. The World Bank and experts expect growth of less than 6.5%. The extent to which the brand is not at the height depends on whether the trade war with the United States escalates further or that an agreement can be reached.
"The trade war is currently making itself felt in increasing uncertainty," says Max Zenglein, director of the economics program at the China Institute Merics. Weak exports and reluctance to invest have had an impact on growth. "But it will not be very serious until there is no solution by March and additional customs duties will be raised".
The United States has set a March 1 deadline for China, threatening to intensify if it does not comply. US President Donald Trump calls for greater market opening and effective fight against theft of intellectual property and forced technology transfer.
"German companies will have to adapt to new realities"
According to new figures, China's growth is slower than it has been since 1990 – but in 2018 it was just above the official 6.5% target for the full year. In the new year, only 6.0 to 6.5 percent can be set as a growth target.
Not just the commercial war slows the economy. Experts also stress the fight against growing credit growth and other factors. "The mood in the country has changed dramatically," says Meris Zenglein economist. This is reflected both in a greater reluctance on the part of consumers and on the part of private companies that have invested less.
The economic slowdown in China is also affecting the German economy dependent on exports. "Although there is no sharp decline in demand for German goods, German companies will have to adapt to new realities," said Zenglein. German automakers, heavily dependent on China, have to adapt to the first collapse of the world's largest automotive market in two decades.
"Many dark clouds" cloud economic prospects
The president of the World Economic Forum (WEF) has declared that he faces serious threats to the global economy. "Global growth is slowing, there are many dark clouds out there," said Borge Brende of the Süddeutsche Zeitung. He spoke of "geopolitical upheavals that poison the world".
For example, there are big challenges in China, where the economy is cooling down. "There is little hope that we will have another two or three years of economic growth, as long as there are no major geopolitical incidents or a trade war," Brende said on the global economy.
Tuesday the WEF meeting of the international financial elite begins in the Swiss Davos. This year is not busy as high carat. Of the seven major industrial nations, only three heads of government are represented, including Chancellor Angela Merkel. Miss Trump and his French counterpart Emmanuel Macron.