Trade war could cause global recession, Beijing official warns, as US investment growth in China sinks
- US investment in China grew 7.5 per cent between January and May, year on year, a much slower pace than the 24.3 per cent recorded between January and April
- Ministry of Commerce spokesman Gao Deng says that the trade war ‘could cause a recession in the United States and global economies’
May’s escalation in trade tensions led to a sharp drop in the growth of American investment in China, according to data released on Thursday which highlighted the chilling effect the trade war is having on investor confidence.
The data release from the Chinese Ministry of Commerce showed that US investment in China grew 7.5 per cent between January and May, year on year, a much slower pace than the 24.3 per cent recorded between January and April.
The rate also was significantly lower than the 16.3 per cent growth posted for the first five months of 2018.
The US fell to sixth largest foreign investor in China in April from third largest in March, according to the data. No figure was available for US investment in China for May.
Chinese Ministry of Commerce spokesman Gao Feng told a Beijing press conference on Thursday that “there will be no winner in the trade war, which could cause a recession in the United States and global economies.”
This development led to the US’ more than doubling tariffs on US$200 billion of Chinese goods, from 10 per cent to 25 per cent.
Washington also set the ball rolling on a threat to roll out further 25 per cent tariffs on the remaining untaxed Chinese items, valued by the US government at US$300 billion.
China has retaliated by slapping higher tariffs on US$60 billion of US goods.