China released second-quarter GDP growth data of 6.2% year-on-year on July 15, 2019, down from 6.4% for the first quarter of 2019, leading to conflicting views on the state of the economy going forward. Analysts note that the economy has not grown at such a slow rate since 1992. Various factors have contributed to the slight downturn. China has faced lower exports due to the US-China trade dispute and the worldwide slowdown. Some signs of investment levels also fell, such as housing construction. However, other signals point to the robustness of the domestic economy. Retail sales and industrial output both increased during the second quarter.
China has implemented various stimulus tools in the past two years to maintain GDP growth, and many predict that it will continue stimulus measures in the months ahead. Many of these measures act on the economy with a lag and may yet improve growth in the future. China has decreased banks’ reserve requirement ratios six times since early 2018, and analysts expect it to decrease the ratios further in the near future. China also implemented a significant stimulus earlier this year, which included tax cuts of roughly $291 billion. Such measures will act to support relatively steady growth going forward. Additionally, the current growth levels of around 6% may seem low at face value, but the economy has grown relatively consistently and quickly since 1992. In terms of the overall economy, a 6% growth rate today adds the equivalent of a much higher yearly growth rate in the past.
