China’s economic growth sank to a three-decade low in 2016 as its struggling exporters brace for a possible trade battle with President-elect Donald Trump.
Growth in the quarter ending in December ticked up to 6.8 percent over 2015, supported by government spending and a real estate boom, a gain from the previous quarter’s 6.7 percent, government data showed Friday. Still, for the full year, growth came in at a lackluster 6.7 percent, down from 6.9 percent in 2015 and the weakest since 1990’s 3.9 percent.
That temporary upturn is unlikely to last, economists said.
« We expect clearer signs of a renewed slowdown to emerge during the next couple of quarters, » said Julian Evans-Pritchard of Capital Economics in a report.
Trump’s promise to raise tariffs on Chinese goods after he takes office Friday has fueled tension with Chinese leaders who are trying to keep growth on track while they overhaul a state-dominated economy.
Beijing wants to nurture more self-sustaining growth based on domestic consumption but trade still supports millions of jobs. Exports fell 7.7 percent last year and more losses could lead to a politically dangerous spike in layoffs.
In a rebuke to Trump, President Xi Jinping warned in a speech this week a « trade war » would harm everyone involved. The American Chamber of Commerce in China said Beijing is preparing to retaliate if Trump acts.
« I am hopeful that after his election, President Trump will consider the issue from the angle of mutual benefit and win-win and will develop the long-term, cooperative ‘big country’ relations that have been formed between China and the United States, » a member of the Cabinet’s planning commission, Ning Jizhe, told a news conference.
Asked about the potential impact of action by Trump, Ning said China should maintain « medium to high-speed growth.
