Published: Wed, January 23, 2019
Money | By Arnold Ball

China's birth rate falls to lowest in 70 years

China's birth rate falls to lowest in 70 years

Last year's growth rate was down from 6.8 per cent in 2017 and was the lowest growth rate of 3.9 per cent, recorded in 1990.

China's economy, which contributes about a third of global growth, is on a long-term slowing trajectory as it shifts from the investment-led model of the past while carrying a heavy debt load.

The sector - accounting for 8 percent of the economy - grew 6.1 percent in the fourth quarter, accelerating from the previous quarter's 2.5 percent growth.

"As the USA and China clash on many fronts, consumer sentiment appears to have been hurt".

New births in China fell to 15.23 million a year ago, the lowest since China relaxed its one-child policy in 2014, Trend reports referring to South China Morning Post.

China expanded at 6.6% in 2018, official figures out Monday showed.

The talks will be held between Chinese Vice Premier Liu He and United States trade representative Robert Lighthizer to work an agreement before the March 1 deadline failing which President Donald Trump has threatened to slap additional tariffs on all Chinese exports to the US.

Retail sales growth slowed to 9.0 per cent, down from a 10.2 per cent increase the previous year.

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The yuan CNY=CFXS has retreated to the weaker side of 6.8 per dollar this week, but is still up almost 3 percent since early December on hopes that Washington and Beijing may be inching toward a trade deal.

The falling population is removing one of China's biggest drivers of growth and experts have warned that the government must make it more affordable to have children, if it wants to redress this balance. Beijing has broadcast this for several years, that it's going to focus on the quality not quantity of growth.

China for decades sought to slow its population growth, seeing a massive population as a drag on development, and it now joins Japan, South Korea and other East Asian nations in seeing a radical drop in its birthrate.

As fears for a sharp slowdown mounted amid uncertainties over whether the trade war will be brought to an end any time soon, Beijing has been drumming the message that it has plenty of room to deploy measures to spur economic growth.

Berlin-based think tank Mercator Institute for China Studies, published a report January 10 projecting that if the trade dispute can't be settled, China's export sector could "take an immediate hit, leading to mass layoffs of workers". The People's Bank of China has been quietly guiding interbank borrowing costs down without actually cutting official interest rates, and the fiscal authorities have pressed on with tax cuts and expedited government bond sales, among other policies.

"Growth will remain under pressure in the coming months and policymakers will aim to halt the slowdown in growth, rather than try to engineer a significant pick-up in growth", said Louis Kuijs of Oxford Economics.

AFPquoted analysts who believe "the worst is yet to come", as China's stock market gets more jittery, the currency grows weaker, infrastructure projects stall because government funds have been redirected to debt reduction, and consumers suffer from a combination of slow income growth and tight credit.

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