situation report

China: Economic Growth Slows to 6 Percent

1 MIN READOct 18, 2019 | 15:39 GMT

What Happened: China's economy grew by 6 percent in the third quarter, its slowest under Beijing's targeted expansion rate of 6-6.5 percent for 2019, the South China Morning Post reported Oct. 18. Retail sales increased by 7.8 percent year-over-year, up from 7.5 percent growth in the second quarter, but still well below the year-to-date average of 8.2 percent.

Why It Matters: The data illustrate the significant headwinds for China's economy that are limiting economic growth, such as the ongoing trade war with the United States. With domestic consumption and investment remaining sluggish, a near-term uptick in economic growth remains unlikely.

Background: The Chinese government has already enacted tax cuts and several monetary policies to offset the slowdown in economic growth, but declining capital return limits Beijing's ability for infrastructure investments.

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