Amid Trade Tensions, China’s Economy Gets A Boost

China’s Economy Gets A Boost - Sakshi Post

BEIJING — China’s economic growth slowed in the quarter ending in June, adding to

The world’s second-largest economy expanded by 6.7 percent over a year earlier, down from the previous quarter’s 6.8 percent, the government reported Monday.

Key drivers of growth including spending on construction and other investments were weakening even before the dispute with Washington erupted. Forecasters have expected a slowdown since Beijing tightened lending controls last year to rein in surging debt.

Growth was “generally stable” but “the uncertainties of the external environment are mounting,” said Mao Shengyong, a spokesman for the National Bureau of Statistics.

Chinese leaders have expressed confidence their $12 trillion-a-year economy can survive the tariff war with U.S. President Donald Trump. Beijing is resisting American pressure to change industrial policies Washington says are based on stealing or pressuring foreign companies to hand over technology and might threaten U.S. industrial leadership.

But forecasters said the downturn is likely to deepen as Beijing tightens financial controls and trade tensions worsen.

“There are risks that Chinese growth will slow more abruptly,” Citigroup economists said in a report.

Washington imposed an additional 25 percent tariff on $34 billion of Chinese goods on July 6. Beijing retaliated with similar penalties on the same amount of U.S. imports. Washington fired back last week with a threat of 10 percent tariffs on an additional $200 billion list of goods.

Trade contributes less to China’s economic growth than it did a decade ago but still supports millions of jobs. Even though Trump’s first tariff hike didn’t take effect the current quarter, exporters say American orders started to fall off as early as April.

More broadly, anxiety about tariffs “is already dampening business confidence and delaying investment,” said Louis Kuijs of Oxford Economics in a report.

Unless the two sides restart negotiations, “the conflict will escalate further, with major economic implications for themselves and the global economy,” said Kuijs.

Of greater concern than trade is “slowing domestic demand within China’s economy,” said Tom Rafferty of the Economist Intelligence Unit in a report.

(AP)


Read More:

Advertisement
Back to Top