The ongoing trade war with the United States took a toll over Chinese economy. Country’s GDP charts reflected that its growth rate dropped down to the lowest it has been in past 27 years. Beijing reported that its economy grew at the rate of 6.2%, in the second quarter (April-June), whereas it was 6.4% in the first quarter. National Bureau of Statistics released the figures on Monday, as per which it is the worst growth rate it has touched since 1992.
NBS claimed that the world’s second largest economy would continue to face “downward pressure” in third and fourth quarter as well. It said, “The Chinese economy is still in a complex and grave situation. Global growth has slowed and external uncertainties are on the rise.”
NBS’s spokesman, Mao Shengyong, blamed the weak economic conditions both within and outside the country for the slump. He added that the global economy weakened due to trade war between two of the world’s biggest economies.
Shengyong said, “Economic conditions are still severe both at home and abroad, global economic growth is slowing down and the external instabilities and uncertainties are increasing.
“The economy is under new downward pressure”.Tom Rafferty, principal economist for China at The Economist Intelligence Unit, also blamed the ongoing trade tiff between Beijing and Washington, for causing the slack in the economy. Rafferty said,“Uncertainty caused by the US-China trade war was an important factor and we think this will persist, despite the recent tariff truce.
“Businesses remain skeptical that the two countries will reach a broader trade agreement and recognize that trade tensions may escalate again.”
Some economist believe that China can endure the slump, given the fiscal stimulus which country’s central bank, People’s Bank of China, plans to introduce in near future for stabilising the economy.
Chinese economic slowdown would not only affect the country but the global economy, especially Asian markets, China being Asia’s biggest exporter in the region. Besides, it would also hit other business of the world like the automobile industry.
As per the sources, the leaders of both the nations, US Trade Representative Robert Lighthizer and China’s Treasury Secretary Steven Mnuchin would meet in Beijing in near future to resume the trade talk. Both the countries are currently negotiating for a temporary truce.
Analysts are very sceptical of the assumption that the two would reach a mutually beneficial deal, doing away with the tariff war which had been going on for over a year.