In the face of Sino-US trade friction，slower growth momentum and rising debt levels，what can we expect for China’s economy in 2019? The main factors to watch are the performance of the global economy，the domestic economic cycle and the extent of progress in China’s economic upgrading. The outlook for the global economy in the remainder of 2019 is not optimistic.

The big challenge is the sharp upturn in Sino-US trade friction. While the situation has not spun out of control，it is difficult to predict with any certainty how the two sides can resolve their outstanding differences. Meanwhile，major central banks have turned to looser monetary policies. But if central bankers were asked what follows massive monetary stimulus，the simple answer might be more of the same. The options are somewhat limited.

The Chinese economy had been described as “stable but weak” but more recently it is showing more obvious signs of a downturn. In the process，macroeconomic policy has helped cushion the downturn，but more counter-cyclical intervention may be necessary. Yet there is good news in the area of economic upgrading and transformation. The economy has acquired more resilience thanks to increased industrial concentration，progress in promoting high-quality manufacturing，and a rise in the contribution of services to the gross domestic product (GDP). China also needs to bear in mind that temporary trade setbacks should not be used as an excuse for further delays in economic reform.