Next year critical to transformation

Source: Xinhua | 2018-11-26

China’s economic growth is expected to hit 6.6 percent this year and slow to 6.3 percent in 2019 as the country seeks to tackle challenges relating to trade and structural reform, economists from Beijing’s Renmin University said in a report.

The predictions published by the China Academy of Social Sciences, are in line with the median forecast in a poll of 73 economists by Reuters last month.

But the economists with Renmin University’s School of Economics warned that China would still face difficulties even if trade tensions with the US were resolved, with the country facing a deteriorating global trade environment, falling export growth and currency depreciation.

China’s GDP grew 6.5 percent year on year in the September quarter. China 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. While recent policies should prevent a deeper decline in growth next year, a new round of 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 percent, compared with a 6.1 percent rise in 2018.

Liu Yuanchun, dean of Renmin University’s School of Economics, said the steady decline in China’s savings rate and the stimulation of domestic consumption were now more important factors in the country’s economic development than investment.

The report said Chinese consumer spending was expected to rise 9 percent next year, outpacing overall growth.