Asian markets rallied on Friday morning as China revealed that its economy expanded by 6.1 percent in 2019 despite trade tensions with the United States throughout the year. The GDP growth data was in line with analyst expectations.
According to CNBC, mainland stocks saw gains during morning trading. The Shenzhen component added 0.48 percent, the Shenzhen composite gained 0.22, Hong Kong's Hang Seng index edged up, 0.54 percent, and the Shanghai composite rose 0.47 percent.
Japan's Topix jumped 0.29 percent and the Nikkei 225 also advanced by 0.38 percent. The Australian S&P/ASX 200 also edged up 0.55 and mining groups such as BHP Group, Rio Tinto, and Fortescue Metals also saw early gains.
The Chinese yuan also strengthened on Friday, with the offshore yuan trading at 6.8686. The currency has been depreciating over the past weeks as traders saw uncertainties in the trade war.
Analysts noted that the rallying of Asian stock markets on Friday came as China's GDP numbers reached the expectations of economists earlier this month, despite the Chinese economy only growing by 6.0 percent during the fourth quarter.
China's GDP growth meeting analyst expectations came unexpected for some due to the China-U.S. trade war that hit the two economies hard over the past months. Some economists predicted that a global recession might be around the bend due to the declines recorded in both nations.
It is worth noting, though, that China's economic growth in 2019 was the slowest in 29 years, CNN reported. On the other hand, it is expected that the signing of the phase one China-U.S. trade deal will improve the economies of both countries.
Phase one of the trade deal included pledges from Beijing that it will increase purchases of American goods while the U.S. pledged to reduce tariffs on several Chinese products that received tax duties over the past months.
The Chinese National Bureau of Statistics pointed out last week that while there are still some problems that need to be fixed with the economy, the country has "sustained general momentum," the Financial Times reported.
Economists reiterated that the banking sector is the industry that needs particular attention in terms of reforms that should help improve the economy. Financial risks are still building up across the Chinese market and global markets. Manufacturing also weakened during the last quarter of 2019.
Still, many analysts believe that the phase one signing is a good step in helping boost the economy for 2020. This prediction could be bolstered by better consumption through the Chinese holidays and good hopes for the China-U.S. relationship.
