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’

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The US fell to the sixth largest foreign investor in China in April from the third largest in March, according to the data. Photo: Reuters

Published: 7:11pm, 13 Jun 2019Updated: 1:58pm, 14 Jun 2019

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.

The trade war has placed a huge strain on the commercial relationship between the world’s two largest economies. Photo: Reuters

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.”