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Beijing (AFP)
According to an AFP survey of badysts, the Chinese economy has cooled further in the first quarter, while Beijing resorted to proven measures to fight the timid global demand and to a trade war murderous between the United States.
The world's second-largest economy grew by 6.3% between January and March, according to a survey of 13 economists before the official release of gross domestic product data on Wednesday.
It would be the slowest quarterly growth rate in almost three decades.
The figure remains within the government target range of 6.0% to 6.5% for the full year, compared to 6.6% in 2018.
In order to combat the slowdown, Beijing has stepped up its support to the economy in recent months by announcing mbadive tax cuts and other tax cuts to help struggling businesses.
Last month, Prime Minister Li Keqiang acknowledged "downward pressure" but pledged not to let the economy slide out of reasonable reach.
Beijing is facing a delicate compromise trying to support private companies in need of credit, without inflating its debt balloon.
Politicians reestablished credit policy after several years of brutal deleveraging, credit data from China's central bank on Friday showed monetary easing.
The growth in bank lending has reached its fastest monthly pace since 2016, said Chang Liu of Capital Economics, noting that it usually takes six months for credit growth to translate into increased economic activity.
But another economist, Bjorn Giesbergen of RaboResearch, warned that the loans had not always reached the private sector and that "the level of debt in relation to China's GDP is already excessive".
The problems will only worsen exponentially if the new credit does not reach the private sector again, he told AFP.
Policies adopted this month, such as the reduction of the value-added tax, and a reduction in social insurance contributions coming next month will help China's troubled private sector more directly.
– Work insecurity –
Last year, China's infrastructure investment fell to 3.8% year-on-year growth, down from nearly 20% year-on-year growth.
In recent months, the big projects in motion that Beijing had put on hold have been restarted to drive the economy.
Nathan Hung Lai Chow, an economist at DBS, said growth was largely driven by infrastructure investment, with project approval and mbadive issuance of special bonds.
"Consumer confidence remains fragile due to precarious employment," said Chow.
China's normally stable unemployment rate reached 5.3% in February, after 4.9% in December, while retail sales growth remained close to its lowest level in 15 years.
The International Monetary Fund on Tuesday raised its growth forecast for the full year from 6.2% to 6.3%, due to China's growing economic recovery and reduced trade tensions with the United States. United.
– Commercial War –
All indications are that the United States and China are expected to conclude a trade agreement after nine rounds of high-level talks between the two giants of the economy.
Last year, Washington and Beijing imposed tariffs over $ 360 billion on bilateral trade, biting into their manufacturing sectors.
Chinese data showed Friday that the politically sensitive trade surplus with the United States widened to $ 20.5 billion last month from $ 14.7 billion in February.
The US authorities insisted that any final agreement should carry weight, but the negotiators apparently found a solution.
"We are pretty much in agreement on the enforcement mechanism," US Treasury Secretary Steven Mnuchin said on Wednesday.
But no date has been set to convene President Donald Trump and his counterpart Xi Jinping for the signing of an agreement.
"We believe growth will bottom out in the second quarter in response to easing macroeconomic policy and improving confidence after easing tensions with the United States" said Tommy Wu, of Oxford Economics, in a note.
? AFP 2019
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