Chinese economy grows at slowest pace for 10 years

22 Oct 18

The Chinese economy is growing at the slowest pace in a decade as the trade war with the US escalates.

The world’s second largest economy expanded 6.5% in the third quarter of 2018, the slowest growth since 2009, according to official data published on Friday last week by China’s National Bureau of Statistics.

The growth rate is down from 6.8% and 6.7% in the first and second quarters, respectively, but in line with the target of roughly 6.5% for the year set by the country’s economic policymakers.

Economists had forecast China’s growth to be at 6.6% for the quarter.

Chinese officials have turned to tax cuts, infrastructure, spending and a looser monetary policy as they seek to boost growth.

The economy lost momentum this year following the government’s efforts to tackle high levels of debt and was faced with US tariffs on more than $250bn of its exports.

A spokesperson from the NBS said: “Faced with an extremely complex environment abroad and the daunting task of reform and development at home, China’s economic growth remained generally steady.”

China is in the midst of an unfolding trade war with the US.

Most recently, China announced retaliatory tariffs on $60bn of US goods, after Donald Trump imposed tariffs on the major Asian economy and many other countries around the world.

Last week, the International Monetary Fund cut its global economic outlook for this year and the next by 0.2 percentage points because of the trade wars looming.

It added that a full-blown trade war between the US and China will make a dent in the world economy.

“Escalating trade tensions and the potential shift away from a multilateral, rules-based trading system are key threats to the global outlook,” the IMF warned.

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