China economy

China’s economy grows at slowest pace in 28 years

Workers check a shipping container on a truck at Qingdao Port on January 14, 2019 in Qingdao, Shandong Province of China
Workers check a shipping container on a truck at Qingdao Port in China. (Photo by VCG/VCG via Getty Images)

China’s full-year economic growth in 2018 came in at 6.6% — slower than the 6.8% rate in 2017 — marking the slowest pace since 1990, as forecast by economists. Growth in the final quarter of the year rose to 6.4%, compared to the 6.5% in the prior quarter.

Why it matters: Tariffs have taken a toll on the Chinese economy, but there were signs of a slowdown before the U.S.-China trade war began, as the government cracked down on high debt levels. The weak GDP number solidifies clues we’ve seen in recent months, including weak factory activity and trade data, plus a rare warning from Apple CEO Tim Cook. Still, per the retail sales report released on Sunday that topped expectations, the Chinese consumer is still holding up for now.

Expert Voices

Despite U.S. concerns, Djibouti may see gains from Chinese finance

Djibouti's President Ismail Omar Guelleh shakes hands with Chinese President Xi Jinping during the Forum on China-Africa Cooperation on September 3, 2018 in Beijing, China.
Djibouti's President Ismail Omar Guelleh with Chinese President Xi Jinping during the Forum on China-Africa Cooperation, in Beijing, on Sept. 3, 2018. Photo: Andy Wong / Pool via Getty Images

In unveiling the Trump administration’s new Africa strategy last month, national security adviser John Bolton cast Chinese financial and military activity in Djibouti as a threat to U.S. interests in the Horn of Africa. He cited concerns about Djibouti's mounting debt burden to China and China's potential to take over a strategically located port, along with its establishment of a military base near U.S. base Camp Lemonnier.

The big picture: Djibouti has enjoyed a four-decade relationship with China, and in the past few years, this relationship has become more instrumental in Djibouti's development. China holds 77% of Djibouti’s debt, largely because of Vision Djibouti 2035, the country's agenda to become a logistics and commercial hub for continental trade and spur medium-term growth of 10% per year.

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