Workers on the production line of lithium-ion batteries for electric vehicles (EV) were seen at a plant in Huzhou, Zhejiang Province, China.
BEIJING (Reuters) – China’s National Bureau of Statistics on Wednesday revised the national growth rate for 2019, with deep cuts in the manufacturing sector.
The downward revision gives the country a lesser base from which to report growth for 2020.
The bureau said gross domestic product last year was now up only 6.0% to 98.65 trillion yuan ($ 15.1 trillion), versus 6.1% as previously reported.
The main reason so far has been manufacturing cuts of 503.8 billion yuan ($ 77.15 billion), or about 2% of the sector’s original contribution to growth in 2019.
“This indicates an effect The trade war between the United States and China Yu Su, chief economist at The Economist’s Economic Information Unit, said in a statement that China’s manufacturing activity has been underestimated.
Trade tensions between the two largest economies in the world began to escalate in 2018, with friction escalating the following year as both countries applied tariffs on goods from other countries, and the United States blacklisted major Chinese technology companies. The two countries reach a temporary armistice with the signing of the phase one trade agreement in January 2020.
The Census Bureau made the most progressive changes in industry or university services, with information transmission, software and information technology services increasing by 70.2 billion yuan.
China is declining GDP numbers regularly, often near the end of the year. Many doubt the accuracy of the statistics as local governments typically face political pressure to achieve pre-set growth targets.
This year, in the wake of the coronavirus pandemic, the central Chinese government has stepped in A rare decision not to announce a GDP growth target. Analysts generally expect growth of around 2% in 2020.
For Bruce Pang, head of college research and strategy at China Renaissance, the large downward adjustment of secondary or manufacturing industry is in line with efforts to reduce that industry’s share of GDP.
Such a cut to last year’s numbers also helps with the “luster and quality” of economic growth numbers for the next few years, according to CNBC’s translation of his Chinese comments, Pang said.