On Monday Chinese government published second-quarter figures revealing its economy decelerated to 6.2%. It is the weakest growth rate in nearly the past three decades. The massive fall is a result of the ongoing trade war between China and the United States. Thus the world’s second-largest economy has experienced a massive fall in the economic growth. In the last three months, from April to June, China’s economy extended by 6.2% from a year ago. It is the slowest quarterly growth rate since 1992. Even more, the figure is less than the estimated year-over-year growth in the Q1 2019.
According to China’s National Bureau of Statistics, the economy will continue to experience massive fall during the second half of 2019. The statement notes China lies in a critical and challenging situation. Besides, international growth has reduced speed, as well as external insecurities, are on the lift. Still, the nation will try to ensure stable economic growth. Although the massive fiscal fall has imposed pressure on Chinese leaders. Tom Rafferty, principal economist for China at the Economist Intelligence Unit, said uncertainty lead by the US-China trade war plays a vital role in growth. As per economist, the condition will persist, despite the latest tariff truce.
Recently Beijing and Washington have agreed upon a temporary truce amid the prolonged trade war. Besides, both sides are planning to restart trade talks. Whereas Tom notes businesses remain doubtful that the two nations will come with a broader trade agreement. The analyst estimates trade tensions may increase again. While Peter Navarro, White House’s trade adviser said Robert Lighthizer, the US Trade Representative, will visit Beijing along with Steven Mnuchin, Treasury Secretary. Still, a question arises in analysts, whether both sides will reach a deal to eliminate charges placed since last year. All in all, China has reported a drastic and sharp fall in both imports and exports for the first six months of the current year. Notably, the country has recorded a sharper decline in exports to the U.S., which accounts for 8.1%. Whereas imports from the United States have dived 30% year-over-year.