The incendiary trade war with the United States has resulted in China reporting its lowest economic growth in nearly three decades.
According to reports from the Chinese government on Monday, the gross domestic product of China increased 6.2% in the quarter ended June, the slowest quarterly growth rate since 1992. This is down from 6.4% in the previous quarter.
Exports from China fell 1.3% year-on-year to 212.84 billion in June, compared to market expectations of a 2% percent drop. This was the first full month of higher U.S. tariffs on $200 billion of Chinese goods.
China also reported a major decline of 8.1% in exports to the U.S. for the first half of 2019, while imports from the U.S. plunged 30%.
China’s current slump in growth can be attributed to the escalating trade dispute with United States, and has affected everything from auto brands to technology companies.
On Monday, the National Bureau of Statistics of China reported that “the economic conditions are still severe both at home and abroad, the global economic growth is slowing down,” the report said. “The external instabilities and uncertainties are increasing, the unbalanced and inadequate development at home is still acute, and the economy is under new downward pressure.”
This is coming amid a recent announcement that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will soon travel to Beijing to attempt to resume trade talks between the two countries.
While the ongoing trade dispute weighs on global growth, some analysts are doubtful that the two countries will soon reach a trade agreement, and predict that China will continue to suffer from U.S. tariffs and sanctions imposed by the Trump Administration.
Lighthizer last month told the U.S. House Ways and Means committee that, “if we can resolve these issues in a way that improves this relationship, (and) preserves the competitive advantage of the United States, we have an obligation to do that, and hopefully we will get to that point.”
The Trump Administration hit Chinese telecoms giant Huawei with severe sanctions, adding another volatile element to the already heated U.S.-China trade dispute.
In May, the U.S. Commerce Dept. added Huawei and 70 affiliates to its “Entity List” a move that bans the firm from buying vital components and technology from U.S. firms without government approval on national security grounds. Huawei denies its products pose a security threat.
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