China’s economic growth is expected to hit 6.6 per cent this year and slow to 6.3 per cent in 2019 as the country struggles with challenges relating to trade and structural reform, economists from Beijing’s Renmin University said in a report.
The predictions, published by the news service of the China Academy of Social Sciences late on Saturday, are in line with the median forecast in a poll of 73 economists by Reuters last month, with China under increasing pressure from a trade war with the United States.
But the economists with Renmin University’s School of Economics warned that China would still face difficulties even if trade tensions with the United States were resolved, with the country facing a deteriorating global trade environment, falling export growth, and currency depreciation.
China’s gross domestic product (GDP) grew 6.5 per cent year on year in the September quarter, its slowest quarter of growth since 2009, and Beijing has tried to encourage commercial banks to boost lending to private firms and take action to ease company financing problems.
The economists said it would be difficult to use short-term measures to alleviate downward economic pressures now building in China, and while recent policies should prevent a deeper decline in growth next year, a new round of structural supply-side reforms was needed.
They predicted that 2019 would be critical in the restructuring of China’s economy and its long-term transition to a slower and more high-quality growth model.
The report said next year should also see a rebalancing of China’s foreign trade, with imports likely to soar 16.1 per cent, compared with a 6.1 per cent rise in 2018.
Liu Yuanchun, dean of Renmin University’s School of Economics and one of the authors, said the steady decline in China’s savings rate and the stimulation of domestic consumption was now a more important factor in the country’s economic development than investment.
The report said Chinese consumer spending was expected to rise 9 per cent next year, outpacing overall growth.