In the News: 2018 GDP Growth, US-China Trade Deficit, and Shenzhen Bankruptcy Court
January 22, 2019 | BY
Jacelyn JohnsonChinese economic growth hits 28-year low; report reveals China's plan to eliminate trade deficit in six years; and Shenzhen launched a new bankruptcy court.
China Reports Slowest GDP Growth in 28 Years at 6.6%
China's National Bureau of Statistics (NBS) released its preliminary estimation of 2018's gross domestic product at $13,245 billion, a year-on-year growth of 6.6%, just above the targeted growth of 6.5%, making it the slowest growth rate over the last 28 years.
The NBS reported a slow yet stable growth of 6.2% year-on-year of China's industrial output, down from 2017's 6.6%, showing a surge in the output of railway passenger cars with a year-on-year growth of 183%, while new energy vehicles recorded an increase of 40.1%. Other expanding industries include high-tech industries (11.7%), strategic emerging industries (8.9%) and the equipment manufacturing sector (8.1%). Industrial output is used to measure the activities of large enterprises with an annual turnover of at least $2.9 million.
The NBS data also showed a fast growth in total retail sales of consumer goods, up by 9% compared to 2017, with a significant increase of 23.9% in online retail sales compared to last year. The online sales of physical goods were up by 25.4% accounting for 18.4% of total retails sales of consumer goods, while online retail sales of non-physical goods were up by 18.7%.
More from CLP:
China to Eliminate US-China Trade Deficit by 2024, Report Says
In the latest U.S.- China negotiations news, China has offered to increase goods imported from the U.S. with a combined value of over $1 trillion over the next six years, in an effort to reduce its trade surplus which stood at $323 billion in 2018 to zero in 2024, reported Bloomberg.
This offer would involve China raising its annual import which currently stands at about $155 billion to around $200 billion in 2019, and the amount to increase to an annual total of about $600 billion by 2024.
The U.S. negotiators however demanded that the imbalance be cleared in the next two years. Economists are arguing that it would be hard to eliminate the gap due to the large demand for Chinese products in the U.S., while China may increase their spending spree by offering to purchase more technologies with national security applications, which may be unacceptable to the U.S.
China's economic growth is already seeing a slump, coming in at 6.6% in 2018, the slowest pace since 1990, following increased tensions from its trade dispute with the U.S. According to newly released National Economic Performance of 2018, China recorded a total export value of $2,415.11 billion, up by 7.1%; while the total value of imports was $2,072.32 billion, up by 12.9%. The trade balance was $342.8 billion in surplus, down by 18.3% year on year.
It remains to be seen how this plays out as no official statements have been released at this stage, but China's trade representative, Vice Premier Liu He, is expected to visit Washington, D.C., on Jan. 30 for further talks with the U.S..
More from CLP:
New Bankruptcy Court Launched in Shenzhen
The Shenzhen Bankruptcy Court was officially launched on January 14 in an effort to enhance judicial support in an internationalized business environment especially for its Greater Bay Area.
The new bankruptcy court aims to promote the separation of bankruptcy and administration matters, set up rules against the abuse of bankruptcy procedures, enhance personal bankruptcy protections as well as handle cross-border bankruptcy cases which seems rife. The court will have jurisdiction to trace assets of mainland businesses that have been transferred to Hong Kong.
The Shenzhen Intermediate People's Court first established a bankruptcy trial court in 1993, and have since continued to explore creative reform ideas, including conducting online auction of properties owned by bankrupt companies. The new Bankruptcy Court took only one month to gain approval, as it will play a significant role in meeting economic and social development demands.
More from CLP:
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now