China’s economic expansion last year slumped to its slowest pace in 28 years as the country came under pressure from the Trump administration’s tariffs.
China announced Monday that its economy grew 6.6 percent, the slowest pace since 1990. The year prior, China’s economy grew at a 6.8 percent rate, revised down from 6.9 percent earlier.
The slowdown was expected by economists. In fact, investors in Asian stocks appeared to be relieved it was not even worse than forecast, bidding up share prices after the announcement.
Industrial output grew 5.7 percent in December from a year earlier, a faster pace than the 5.4 percent recorded in November. That suggests that China is adjusting to tariffs better than expected. Economists had predicted output to fall to a 5.3 percent rate of growth.
It may be that President Donald Trump’s agreement with Chinese dictator Xi Jinping to hold off on further trade actions for 90 days gave China’s industrial production an end of the year lift.
Retail sales data were 8.2 percent higher in December, a notch up from November’s 8.1 percent gain. Combined with reports from Apple, American car-makers, and other U.S. companies that China sales are falling below expectations, this would seem to point to a decision by China’s consumers to avoid U.S. products.
Many outside experts are skeptical of China’s reports of its economic performance. They suspect that China’s economy may be growing even slower than the official statistics reveal.
China’s top trade negotiator, Vice Premier Liu He, is scheduled to visit meet with U.S. trade representative Robert Lighthizer in Washington, D.C. at the end of January. Tariffs are scheduled to rise to 25 percent on some $200 billion of Chinese-made goods if the U.S and China cannot reach an agreement to put aside the trade dispute by March 1.