Premier Li Keqiang said it is “very difficult” for China’s economy to grow at a rate of 6 percent or more because of the high base from which it was starting and the complicated international backdrop, Reuters reports.
The world’s No. 2 economy faced “certain downward pressure” due to slowing global growth as well as the rise of protectionism and unilateralism, Li said in an interview with Russian media which was published on the Chinese government’s website, gov.cn.
China’s gross domestic product (GDP) grew 6.3 percent in the first half of the year, and Li said the economy was “generally stable” in the first eight months of the year.
“For China to maintain growth of 6 percent or more is very difficult against the current backdrop of a complicated international situation and a relatively high base, and this rate is at the forefront of the world’s leading economies,” Li was quoted as saying.
Analysts say China’s economic growth has likely cooled further this quarter from a near 30-year low of 6.2 percent in April-June. Morgan Stanley says it is now tracking the lower end of the government’s full-year target range of around 6-6.5 percent.
In response, the authorities have increased support, announcing on Sept. 6 a cut in the reserve requirement ratio (RRR) for the third time this year, releasing 900 billion yuan (US$126.35 billion) in liquidity into the economy.
The slowdown in China’s factory and consumer sectors deepened in August, with industrial production growing at the weakest pace in 17-1/2 years, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand.
Production rose 4.4% in August year-on-year, slower than the 4.8% growth in July. Analysts polled by Reuters had forecast output would rise 5.2%.
August’s data is the slowest growth since February 2002.
The data also showed retail sales growth at 7.5%, below the 7.9% expected in a Reuters poll and the 7.6% increase in July.
Fixed-asset investment for the first eight months of the year rose 5.5%, according to data published by the National Bureau of Statistics, compared with a 5.6% rise forecast by analysts.
Data last week showed factory-gate prices fell at their fastest pace in three years and analysts predict that producer deflation will continue to worsen in the coming months.
It also follows a factory survey that showed activity shrank for the fourth straight month as the U.S. trade war dragged on. China’s imports of unwrought copper also fell 3.8% year-on-year in August, a metal with wide use in infrastructure, power and consumption.
Private-sector fixed-asset investment, which accounts for about 60 percent of the country’s total investment, grew 4.9 percent in January-August, compared with a 5.4 percent rise in the first seven months of 2019.
China is in the midst of a more-than-a-year-long trade war with the United States that has upended global supply chains. Trade negotiators are expected to meet later this month, with a top-level summit meeting to be held in Washington in October, though a resolution appears unlikely.
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(Updated: last posted at 10:05 a.m.)