President Xi Jinping said China’s economy is stabilizing and has improved noticeably, giving an upbeat assessment of the nation’s health despite the worsening trade war and recent weak data.
While the global economy and trade have slowed down, China’s economy has stayed in a reasonable range in 2019, with stable growth, increasing employment, rising incomes and stable prices, Xi said in an interview with Russian media including Tass. The interview was carried in the People’s Daily ahead of Xi’s visit to Russia, which started yesterday. China has “sufficient conditions, ability and confidence” to cope with various risks, Xi said.
The comments are the latest in a series of statements from the government that the economy is strong and can overcome any fallout from the prolonged trade tensions with the U.S. Xi’s government is grappling with slowing growth and fragile financial markets as well as the dispute with the U.S., which has damaged trade and confidence.
Some economists are not so sanguine about the long-term health of the economy, with Bank of America Merrill Lynch analysts cutting their forecast for 2020 growth yesterday due to the trade war.
“In view of higher risks of trade shocks, we lower our China GDP growth forecast for 2020 to 6.0%, from 6.2% previously,” said Helen Qiao and Zhi Xiaojia in a note. “We expect the PBOC to cut interest rates twice in 2019 and once in 2020,” following on from expected cuts by the Federal Reserve, they wrote.
The World Bank also cut its forecast for 2020, and now expects the economy to expand at 6.1%, down from the previous 6.2% estimate. Growth will be 6.2% this year, according to the bank’s estimates released last week, but the “outlook is subject to greater downside risks than previously.” Bloomberg
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