Surprise, war and miscalculations, China’s turbulent economy in 2018 had it all and more
- The world’s second largest economy started the year with the strong intentions to improve the quality of growth but ended it hoping for a better 2019
- The trade war with the United States, the government’s deleveraging campaign to reduce debt and an unhappy private sector all played their part
If there is a single Chinese word to describe China’s economy in 2018, there may be no better one than gang, which translates to dispute and leverage.
Beijing started the year with the strong intentions to improve the quality of growth, vowing to reduce deeply troubling risks in the financial system and to control rampant pollution.
But in reality it was disputes – either between China and the United States, or with the Chinese private economy and state-owned enterprises – that dominated the headlines.
The world’s second-biggest economy is expected to achieve the government’s growth target of “around 6.5 per cent” this year, but the deviation from its original policy intentions, a mixed result of misjudgment, excess pride and uncontrollable external factors, have turned out to be very costly.
Unprecedented trade war
The Chinese government’s strategy of making major purchases of US products managed to prevent the US China-bashing from damaging bilateral ties in the first year of Donald Trump’s term as US president which began in January 2017, but that strategy was no longer effective in 2018.
