Workers at a factory in Huzhou, Zhejiang Province, China, are manufacturing lithium-ion batteries for electric vehicles (EVs).
BEIJING – China’s National Bureau of Statistics on Wednesday revised its national growth rate for 2019 with major cuts in the manufacturing sector.
The downward adjustment gives the country less platform to report growth for 2020.
GDP grew by only 6.0% last year to 98.65 trillion yuan ($ 15.1 trillion), up from 6.1% previously reported, the bureau said.
The reduction in production so far to 503.8 billion yuan ($ 77.15 billion) or about 2% of the sector’s original contribution to growth in 2019.
“It simply came to our notice then US-China trade war China’s manufacturing activities have been underestimated, “said Yu Xu, chief economist at The Economist Intelligence Unit.
Trade tensions between the world’s two largest economies began to escalate in 2018, and friction increased the following year as both countries imposed tariffs on goods from other countries and the United States blacklisted major Chinese technology companies. The two countries reached a tentative agreement by signing the first phase of the trade agreement in January 2020.
As information exchange, software and information technology services rose to 70.2 billion yuan, the Bureau of Statistics’ tertiary or services made the biggest changes in the industry.
China regularly revises its GDP figures, mostly by the end of the year. Many are skeptical of the accuracy of the figures as local governments often face political pressure to meet pre-determined growth goals.
This year, in the wake of the corona virus outbreak, the Central Chinese government a Rare decision not to announce GDP growth target. Analysts generally expect growth of about 2% by 2020.
According to Bruce Bang, head of macro and strategic research in China’s Renaissance, a large downturn in the secondary or manufacturing sector is in line with efforts to reduce the proportion of that industry to GDP.
Such a reduction in last year’s figure would help the “brightness and quality” of economic growth figures for the next few years, Pang said, according to a CNBC translation of his Chinese comments.