China's economy grows at slowest pace in decades amid US trade war
The Chinese economy grew 6.2 per cent in the second quarter of the year, slowing from 6.4 per cent in the first three months of the year, the National Bureau of Statistics said Monday.
The rate is still within the growth target set by the government for this year, of at least 6 per cent growth, but shows how the Chinese economy is being stymied by an escalating trade dispute with the United States.
The sluggish manufacturing sector was largely responsible for the economic slowdown, with housing and consumption remaining resilient.
China’s exports fell 1.3 per cent in the April-June period from a year earlier, while imports plunged almost 4 per cent due largely to US tariffs enacted as part of the trade war.
The tariffs not only dragged down exports but also disrupted supply chains and eroded investors' and consumers' confidence, said independent economist Wang Fuzhong.
Along with the cool-down of the property market, "it's like two engines for economic growth have been shut down," he said. "Therefore, it will continue to slow down."
Months-long negotiations between Washington and Beijing to end the trade war broke down in May, when US President Donald Trump raised tariffs on 200 billion dollars' worth of Chinese imports. China retaliated by hiking duties on 60 billion dollars' worth of US goods.
Trump and Chinese President Xi Jinping last month agreed on a truce in their trade war, with the US promising to hold back on imposing new tariffs and to lift some restrictions against Chinese telecommunications giant Huawei.
Prior to the truce, Trump had threatened to impose tariffs on an additional 325 billion dollars’ worth of Chinese imports – which would mean almost all Chinese goods imported into the US would carry punitive tariffs.
If Trump goes ahead with the additional tariffs, the impact would be "huge" on medium and small Chinese enterprises, said Huang Weiping, an economics professor at Renmin University.
"Then the economy would really be affected," he said.
