China's growth slows to near three decade low

Credit: Reuters - Politics
Published on July 15, 2019 - Duration: 02:15s

China's growth slows to near three decade low

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting U.S. trade pressure.

Michelle Hennessy reports.

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China's growth slows to near three decade low

China says its economy's growing at the slowest pace since records began.

Beijing announced its growth fell to 6.2 percent between April and June.

For most of the world, that's a great number - for China it's another sign of a slowdown.

Trading partners and the markets have been closely watching the world's second largest economy.

And a trade war with the US has sparked concerns of a global recession.

But Monday (July 15)'s headline isn't necessarily the full story, says Reuters Breakingviews' Christopher Beddor.

(Soundbite) (English) REUTERS BREAKINGVIEWS, CHRISTOPHER BEDDOR: "Now the headline's going to be slowest growth in 27 years which is absolutely correct but at the same time if you peel back the data and look at some of the sub indicators it actually wasn't quite as bad as many people had feared.

A lot of the data came in better than expected, so we saw pretty good results on things like investment, industrial output, retail sales so I think even though the economy is clearly cooling I don't think it's fair to say it's cratering, it's a pretty gentile decline at this point." Beijing already taken some action this year.

It's had massive tax cuts and tried to boost infrastructure - but the economy has been slow to respond.

A Politburo meeting expected later this month could signal what Beijing plans to do next.

The drag of the trade war could factor in.

Even after the two countries' leaders met at the G20 - they're still at odds over significant issues needed for a deal.

And there's still the threat of more U.S. tariffs on another $300 billion worth of Chinese goods: (Soundbite) (English) REUTERS BREAKINGVIEWS, CHRISTOPHER BEDDOR: "To put that in perspective you add it all together, Chinese retaliation and so forth, it'll probably be worse than all the previous escalations in the trade conflict put together.

So I think that officials at some level will probably want to keep the powder dry because they'll have to respond to that with stimulus, as to whether this actually moves the dial on the trade conflict, it's difficult to tell because even though we could parse the data and say well it's not really that bad - just the headline of slowest growth in at least 27 years maybe at a certain level negotiators on both sides see that and that factors into their calculus of who has the upper hand in these negotiations."

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