Workers are seen at the production line of lithium-ion batteries for electric vehicles (EV) at a factory in Huzhou, Zhejiang Province, China.
Reuters
BEIJING – China’s national bureau of statistics on Wednesday revised the national growth rate for 2019 lower with major cuts in the manufacturing sector.
The downward adjustment gives the country a lower base to report growth for 2020.
GDP rose just 6.0% last year to 98.65 billion yuan ($ 15.1 billion) from 6.1% as previously reported, the bureau said.
The main reason was by far the reduction in production of 503.8 billion yuan ($ 77.15 billion), or about 2% of the sector’s initial contribution to growth in 2019.
“This indicates that the impact of the US-China trade war on China’s manufacturing activity has been underestimated,” Yue Su, chief economist at the Economist Intelligence Unit, said in a statement.
Trade tensions between the two largest economies in the world began to increase in 2018, with friction increasing the following year as both countries placed tariffs on goods from the other and the US, placing the largest Chinese technology companies on blacklists. Both countries reached a temporary ceasefire with the signing of the Phase One trade agreement in January 2020.
The Bureau of Statistics has made the biggest upward changes to the tertiary industry, with the transfer of information, software and IT services by 70.2 billion yuan.
China regularly revises its GDP figures, often by the end of the year. Many doubt the accuracy of the statistics, as local governments usually experience political pressure to meet predetermined growth targets.
This year, in the wake of the coronavirus pandemic, the central Chinese government has made a rare decision not to announce a GDP growth target. Analysts generally expect growth of around 2% by 2020.
For Bruce Pang, head of macro and strategy research at China Renaissance, the large downward adjustment to the secondary or manufacturing industry is consistent with efforts to reduce the industry’s share of total GDP.
Such a reduction from last year’s figure also helps the ‘clarity and quality’ of economic growth figures for the next few years, Pang said, according to a CNBC translation of his Chinese comments.