The growth of China reduced to its slowest pace in almost three decades in the second quarter, with the US-China trade war and weakening global demand considering the world’s number-two economy, revealed the official data on Monday.
China President Xi Jinping will find difficult to fight back forcefully against the US due to the slowing economy. The US is using tariffs as leverage to try to force Beijing into opening up its economy.
The National Bureau of Statistics has released a 6.2 percent figure which is in line with a survey of analysts by AFP and down from a 6.4 percent expansion in the first quarter. The GDP figures from the 6.6 percent growth which China put up in 2018, becomes within the government’s target range of 6.0-6.5 percent.
NBS spokesman Mao Shengyong says, “Economic conditions are still severe both at home and abroad, global economic growth is slowing down and the external instabilities and uncertainties are increasing.” He further stated that “The economy is under new downward pressure.”
This year Beijing has introduced measures to boost the economy, but they have not been enough to offset a domestic slowdown and decreasing overseas demand- made worse by a punishing trade war with its biggest trading partner country, the United States.
In the first six months, exports to the world rose only 0.1 percent on-year. It is being supposed by the analysts that Beijing will step up support for the economy in the upcoming months. In June, the industrial production increased 6.3 percent from 5.0 percent in May which was the slowest increase since 2002.
China’s economy has been affected by the trade war with the US, intensifying a global slowdown. “The China GDP data was very much in line with consensus confirming the markets view that the economy continues to slow, and while GDP touched 27 years low in Q2, the on consensus print does lessen the market fears that China’s economy is headed for a hard landing,” said Stephen Innes, managing partner at Vanguard Markets.
“As such risk assets will respond favorably but it’s hard to escape the economic realities that the US-China trade war is having on global economies,” he added. Overall, both the countries have attacked each other with punitive tariffs covering more than $ 360 billion in two-way trade, damaging manufacturers on both sides of the Pacific.