China’s GDP growth seen slowing to 6.2% in second quarter

The tariffs on shipments to the US are having an impact on China’s economy, an economist said. (AFP)
Updated 12 July 2019

China’s GDP growth seen slowing to 6.2% in second quarter

  • Beijing stepped up support for the economy but the moves have not been enough to offset a domestic slowdown and softening overseas demand
  • China’s 1.3 billion consumers remain a bright spot

BEIJING: China’s economy grew at its slowest rate in nearly three decades in the second quarter, according to an AFP survey of analysts, hit by the US-China trade war and weakening global demand.
The world’s second largest economy expanded 6.2 percent in April-June, the poll of 10 economists predicted ahead of the official release of gross domestic product figures Monday.
The reading would mark the worst quarterly growth in almost three decades but stay within the government’s target range of 6.0-6.5 percent for the whole year. The economy grew 6.6 percent in 2018.
Beijing has stepped up support for the economy this year but the moves have not been enough to offset a domestic slowdown and softening overseas demand for its toys, gadgets and electronics.
Policymakers are likely to take further action, analysts say, with Premier Li Keqiang presiding over a state council meeting Wednesday that pledged to lower tariffs and step up tax rebates for exporters.
“The existing tariffs on exports to the US are having an impact on China’s economy,” said Steven Cochrane, chief APAC economist with Moody’s Analytics.
“Industrial production and exports are also weak, with shipments to the US declining significantly,” he said.
Beijing pushed forward a raft of stimulus measures earlier this year to cushion the impact from its cooling economy, increasing spending on roads, railways and other big-ticket infrastructure projects, and tax cuts worth 2 trillion yuan ($297 billion) kicking in from April.
The policies buoyed the economy in March and brought in 6.4 percent growth for the first quarter, but it proved no more than a short-term panacea.
Industrial output surged 8.5 percent in March before tumbling in April and dropping to five percent growth in May, the slowest increase since 2002.
The build in infrastructure investment has also retreated from the first quarter, coming in at 4.0 percent in January-May, sharply down from years of near 20 percent expansion.
China’s 1.3 billion consumers have remained a bright spot.
“Consumption is holding up relatively well, possibly reflecting the effects of income and value-added tax cuts,” said Tommy Wu of Oxford Economics.
Sales of big-ticket items such as cars have not held up, though, with sales down 12.4 percent in the first half of the year, according to the China Association of Automobile Manufacturers.
Analysts widely expect Beijing will step up with further easing in coming months, with Cochrane tipping new measures heading into 2020.
“This will include lower real interest rates for small firms, further reserve requirement ratio reductions, and ongoing infrastructure spending,” he said.
The overall downward trend gives President Xi Jinping little room to fight back forcefully against the US, which is using tariffs as leverage to try to force China into opening up its economy.
Washington and Beijing have hit each other with punitive tariffs covering more than $360 billion in two-way trade and damaging manufacturers on both sides of the Pacific.
US President Donald Trump and Xi agreed to revive negotiations when they met on the sidelines of the G20 summit in Japan on June 29.
Top US and Chinese negotiators held phone talks on Tuesday but it remains unclear if the wide rupture that has formed since talks broke down in May can be patched over.
On Thursday Trump raised eyebrows with a tweet accusing China of not fulfilling a pledge to buy more agricultural goods, adding: “Hopefully they will start soon!”
Björn Giesbergen of RaboResearch said “we are currently in a stable, unstable equilibrium” with the US-China trade war.
“Ultimately we believe it will be impossible to reach a long-lasting deal. As such, the question is not if tensions will flare up again, but rather when,” he said.


Jubilant cheers as Dubai begins one-year countdown to Expo 2020

Updated 20 October 2019

Jubilant cheers as Dubai begins one-year countdown to Expo 2020

  • Dubai prepares for eye-catching countdown on Burj Khalifa
  • Live performances from singer Mariah Carey and acclaimed Emirati singer and Expo 2020 ambassador Hussain Al-Jassmi

DUBAI: Crowds gathered at different locations in the UAE on Sunday night to mark its one-year countdown to Expo 2020 in October next year, with host emirates Dubai staging a spectacular concert, topped by a light projection on the iconic Burj Khalifa.

American superstar Mariah Carey was the star of the night, which also saw performances from regional artists including Khalifa, Shamma Hamdan, Abri and Funk Radius, Showcase and Jaysus Zain. The audience also grooved to a few Arabic tunes from Emirati singer Hussain Al-Jassmi.

A make-shift stage was set up at the Burj Park in Dubai’s downtown area to host the performances, while people also enjoyed a good view of the tallest building in the world. The countdown was facilitated by Emirati social media sensation Khalid Al-Ameri and Bollywood actress Shraddah Kapoor. 

A 3-minute firework display lit up the skies of Dubai as the crowd eagerly waited for Carey to appear on stage.

The 49-year-old singer sang her all-time favorite songs, including “Emotion,” “We Belong Together,” and a revival of the Motown classic “I’ll Be There,” to an enthusiastic audience who didn’t mind the heat and humidity at the outdoor venue.

The other six emirates also marked the occasion with free-for-all activities in venues such as the Louvre Abu Dhabi, Al Majaz Waterfront in Sharjah, Ajman Museum, Umm Al Quwain Corniche, Al Qawasim Corniche in Ras Al Khaimah and Fujairah Fort.

The events, Minister of State for International Cooperation and Expo 2020 Director-General Reem Al-Hashimy said, will “offer a window into the once-in-a-lifetime celebration that awaits from October 20, 2020.”

“The next 12 months will see us put the finishing touches to ensure an exceptional World Expo,” she added, in a report by state-run WAM.

The Louvre Abu Dhabi featured YouTube sensation Sandra Sahi, as well as singers Stephon Lemar, Layla Kardan, the Emirati Trio.

Indian band ROOH, singer and pianist Clarita de Quiroz, Egyptian oud player Rami Zaki and other regional artists were celebrating the count down at Sharjah’s Al Marjaz waterfront.

While the Ajman Museum hosted Arabic fusion band, pop-rock musician Hydyy, Emirati soul singer Chakram, poet Storm Fernandes, artist Humaira Hussain and MC Mohammed Enaba.

The 6-month Expo 2020, to be held at a vast new site in the south of Dubai, will officially open on Oct. 20 next year, with organizers expecting an estimate of 25 million visitors.