China GDP growth slows to low end of Beijing’s ‘comfort zone’ and Trump may drag it down further
Economy grew 6.7 per cent in second quarter from a year earlier, easing slightly from first quarter, figures show
China’s economy has clung to the lower end of its growth range of the last three years, slowing to 6.7 per cent for the second quarter as exporters brace for bruises from US tariffs.
The rate was down from the 6.8 per cent in the first three months of the year and at the lower end of 6.7-6.9 per cent range posted every quarter since the end of June 2015, according to data released by the National Bureau of Statistics (NBS) on Monday.
But the rate is still within Beijing’s target of “around 6.5 per cent” for the year.
Growth could fall even further if a trade war with the United States escalates.
Various institutions, including Morgan Stanley, forecast that 25 per cent US tariffs on US$50 billion worth of Chinese goods could knock 0.1 percentage points off growth, slowing the economy to its lowest level since the first quarter of 2009 when the country’s exports were hit hard by the global financial crisis.
But if the US goes ahead with threatened 10 per cent duties on another US$200 billion worth of Chinese goods, China’s growth rate could fall by 0.3 percentage points or more, according to various estimates. That would put growth at its lowest level since the aftermath of the Tiananmen crackdown in 1989 when the world’s major economies sanctioned Beijing for its response to the pro-democracy movement.