Experts believe China’s economy will face a slowdown in 2019. According to a report from Reuters, researchers from the Renmin University in Beijing expect the country’s economic growth to slow from its current rate of 6.6 percent to 6.3 next year. The Asian superpower’s ongoing trade war with the US coupled with the country’s constant economic reformations are mostly to blame for the downturn.
While China’s dispute with the United States is the most immediate issue the country is facing, other factors like a slowdown of exports and the world’s general economic climate are also pressing on China. While its exports are expected to fall, the number of imports is expected to rise, and some from Renmin predict the rate will exceed 16 percent — more than 10 percent higher than 2018’s.
The Chinese Yuan has also suffered from depreciation, and currency investors are favoring more “stable” investments like the US dollar (USD), the Japanese Yen, and the Euro. At the time of this writing, one Yuan is worth just 14 cents to the USD. The Chinese gross domestic product (GDP) is still growing; however, its current rate is the slowest in the last nine years.
Making matters worse in the short-term is an ongoing epidemic of swine fever, which has devastated China’s pork industry. One report from WTVM places the number of pigs killed during the outbreak at more than a million. The industry has already been walloped this year due to US sanctions, which have driven up the price of pig feed. With the loss of so many animals and the demand for pork shrinking, local farmers are struggling to make ends meet.
In the coming months, Beijing is expected to usher in new measures in an attempt to kickstart the economy. According to a report from Reuters, the Chinese government recently approved requests from two foreign finance companies wishing to set up shop in the country. Both the Allianz insurance firm from Germany and Chiyu Bank from Hong Kong will be opening up locations in Shenzhen. Beijing has stated recently that the country plans to bring in more foreign investors, and both Fubon Bank from Taiwan and the Korean Reinsurance Company from South Korea were also recently approved for Chinese operations.
It’s going to take more than foreign money to correct the Chinese economy. Renmin University’s School of Economics dean, Liu Yuanchun, told Reuters that the nation would need to focus on saving and cutting costs, and boosting the “domestic consumption” rate would be crucial in the coming year. According to Yuanchun, these steps are needed more than further foreign investments.