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China economic growth slows to 6.7 pc in second quarter

19 Juillet 2018

"It is the common duty of Europe and China, America and Russian Federation, not to destroy this order but to improve it, not to start trade wars which turn into hot conflict so often in our history", said Tusk, a former Polish prime minister.

Though Beijing has ordered state media to downplay the trade war and refrain from insulting U.S. President Donald Trump-as reported by Reuters and South China Morning Post-the official response has been aggressive in reprimanding the United States and denying that China has engaged in unfair trade practices.

"We are unable to fight equally", said Tu Xingquan, director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

The Trump administration has ordered the imposition of tariffs on $200 billion worth of Chinese imports.

However, Kuijs added that an important question is whether trade talks between China and the United States will restart.

The Shanghai Composite index lost 0.4 percent to 2,820.52 and Hong Kong's Hang Seng edged less than 0.1 percent lower to 28,486.70.

China faced an "extremely complex environment both at home and abroad", said Mao Shengyong, a spokesman for the national statistics bureau.

He added: "Generally speaking, trade frictions unilaterally started by the United States will have an impact on the economy of both countries".

For much of 2018, President Trump has talked tough on the USA trading relationship with some of it biggest partners, from China to Germany. Investors had also been awaiting the China data, and are still looking to June US retail sales figures, to gauge the state of global growth. Recently, the USA announced tariff change recommendations.

The trade war is not the only potential drag on the Chinese economy. The ruling Communist Party has made controlling financial risks a priority this year, suggesting it will resist easing lending controls.

In the event of greater escalation in tariffs and or higher costs faced by consumers, the analysts believe the off-price pricing umbrella could expand, inventory uncertainty could lead to buying opportunities, and stretched consumers may trade down. The first vehicle will be locally produced in about two years, and the factory will eventually have an annual capacity of 500,000 cars. The country also faces a slowing property market and slower-than-expected domestic consumption. It rose by 6 per cent in the first half, down 1.5 percentage points from the first quarter.

But the Chinese economy is thought to need around ten percent growth to prevent an economic slowdown.

Despite the slowdown, China's trade surplus with the U.S. hit a record high in June, widening to $29bn, from $24.6 in May.

The report further said that Chinese goods exports to the US now account for just 3.3% of China's GDP, the lowest in at least 20 years. China's commerce ministry said that it will complain to the World Trade Organization, though it did not clearly mention how it would retaliate.

As per the report, Li Chenggang, assistant minister at the commerce ministry, said that the US' proposals are interfering with globalization of the world economy, and that China's support towards a multilateral trade system will never waiver.

China economic growth slows to 6.7 pc in second quarter