Copper price falls after Chinese economic growth hits 28-year low

Adjust Comment Print

China's economic growth hit a three-decade low in 2018, adding to pressure on Beijing to beef up stimulus measures and settle a tariff war with Washington.

While the 6.6-percent growth rate was lower than the 6.8-percent growth registered in 2017, it is still a relatively fast pace that pointed to resilience in the economy, analysts said.

China's growth slowed to 6.4 per cent in the last quarter of 2018, the slowest since 1990.

China is responsible for around a third of the global economy, and slowing economic growth in China, in essence, means slowing economic growth around the world.

In the last quarter of 2018, China's economy expanded at 6.4% - its slowest expansion rate since the 2009 financial crisis.

"The development in hi-tech innovation that we see around there, are the places where we will see those eight million graduates that are produced every year in China being attracted to".

Last December China's exports fell to Dollars 221.5 billion registering biggest plunge in two years amid the trade war with US.

The economy in China cooled in the fourth quarter of 2018 after buckling from pressure from a bruising trade war with the United States and faltering domestic demand.

CNBCsaw a few bright spots in the Chinese economic report, such as better-than-expected industrial growth and retail sales data, but then noted some of this seemingly positive news is actually a short-lived artificial boost caused by "exporters rushing to ship their goods out of China before new USA tariffs hit".

Copper is technically in a bear market with the price plunging more than 20% since peaking in June 2018 over fears of the impact of the trade dispute between China and the US.

Factory output rose unexpectedly to 5.7 percent from 5.4 percent but it was one of the few bright spots, along with a stronger services sector. But the slowdown has been sharper than expected, prompting Beijing to step up government spending and order banks to lend more to shore up growth and avoid politically risky job losses.

"The financial pressure of life in the city makes the idea of having a child nearly impossible", Cai said.

The low fertility rate, partly a result of over three decades of ruthless birth control by Beijing, showed that the Chinese leadership was too optimistic about the incentive provided by its relaxed birth policy. China's growth data are generally taken with a fairly large grain of salt with many analysts, both within China and externally, regarding them as overstated.

"Things are going very well with China and with trade", he told reporters at the White House.

But the slowdown has been sharper than expected, prompting Beijing to boost spending on construction of roads and bridges and to order banks to lend more, especially to the entrepreneurs who generate most of China's new jobs and wealth.

Still, officials said there was room for policies to counter the slowdown.

Apple assembler Foxconn let go of about 50,000 contract workers since October past year at the company's iPhone assembling factory at Zhengzhou City, the capital of China's Henan Province, according to a January 18 report by Japanese media Nikkei.