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China has the lowest growth in the last 30 years

2020-01-21 13:58:31

China's monetary policy has resulted in lower growth in the last 30 years

What could be the reason for the lowest growth in the last 30 years in China?

 It is important to have very clear that this country has had to face a domestic demand quite weak, because this is due in part to the trade war that has maintained for some years with the United States, this has been a great impact even if in the last two years the Asian giant has promoted some measures in favor of growth, because the official figures reveal not very encouraging numbers, because they only reached a growth of 6.1 percent in 2019, being the worst figure achieved being the lowest growth in the last 30 years

Could the recently signed trade agreement help slow China's slower growth in the last 30 years?

Due to the amount of tensions that China presents, especially with the United States, it is evident that it has sustained the lowest growth in the last 30 years. For this reason, the signing of the trade war agreement that it has made with the United States will generate some improvements for the economy, because in spite of being phase one, the spirits are quite positive, because in addition to this agreement, it is expected that China can apply other measures that will generate more stimulus to companies and therefore to economic growth.

With the objective of eliminating the lowest growth in the last 30 years, the banks have decided to lend more, as perhaps this could be due to the country's recent situations with North America and its trade agreement, involving more loans to small businesses in the country that are around $2.44 trillion, as this could be a form of recovery for an economy that has taken too long, to the point that investments have fallen considerably, where the financing of infrastructure can also be reflected in programs thanks to the opportunity for local governments, which can sell these bonds.

Historically, China has been one of the economies that has expanded the most during the 21st century, or at least this happened during the first decade, making it a commercial power, but from there this growth has been extremely weak to the point of reaching only 6,,1 percent showing the lowest growth in 30 years, being the commercial war a relevant factor. On the other hand, the United States has a much more encouraging prognosis, since experts consider that growth could be around 2.2 percent this year.

Other views on China and low economic growth

This is the BBC's China correspondent and he has a very particular analysis, as he indicates that the lower growth in the last 30 years in the Chinese economy is due to multiple factors, most notably, low domestic demand and the tariffs imposed by the U.S., this alerts Chinese policy makers who are aware and have worked to gradually make this disappear. On the other hand, the government has taken some stimulus measures, so that they can make the economy go up again, opting for bank loans, here is the question, who will really have access to such loans, because GDP growth has been slow, and not offering considerable support to producers of small and medium enterprises, it is complicated to comment on the picture, even if the expectations of the trade war agreement, is very positive.

In phase one of this trade war agreement, China has committed to increase imports to the US, to a considerable number around $200 billion, and above all an issue that had American businessmen worried about the protected intellectual property rights, which could imply a quite favorable economic future for China. In this sense, the United States has only decided to reduce tariffs by half, which in my opinion is a rather uneven measure, even if the pact is transformative as President Trump has said, this is still a little discriminatory, as it simply does not reflect a society of equals.

 Finally, the lowest growth in the last 30 years, have allowed that today China, has to reinvent itself, because it can not continue with such low numbers, when the world economy can present favorable values for them.

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