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October 21, 2020

US-China Trade War: China’s GDP growth lowest in 27 years

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The impact of the ongoing trade war with America is visible on China’s GDP. In the third quarter of the current financial year, China’s GDP growth was low. For the first time in the last 27 years, China’s GDP growth rate (6.0 percent) was so low because of the trade war and sluggish demand at the domestic level.

According to the GDP data released on Friday, China’s GDP growth grew at a rate of 6% in the July to September quarter, compared to 6.2% in the second quarter. This is the worst GDP figure for a quarter for the first time since 1992. However, China is estimated at 6.0–6.5% for the entire financial year.

Mao Shengyeong, a spokesman for China’s National Bureau of Statistics, said, “The country was facing challenges both domestically and globally.” He added, “However, China’s economy has maintained stability and the living standard has improved.”

China’s economy has suffered the brunt of the US duty hike and technological plans have also suffered a setback. The growth rate was much slower than the Chinese government’s target of annual growth. In 2018, China’s growth rate in this quarter was 6.6 percent. It focuses the eyes of those who trade with China on the trade war. There is also a fear of recession because of this trade war.

Singapore economist Ho Wu Chen said, “There are still uncertainties about the trade advance of the US and China.” I think the tariffs that come into effect on 15 December will have a big impact on the 2020 economy. Domestic and international demand has declined in the last few months. US President Donald Trump said that he is close to an agreement with China, but officials say that much work is left to do.

China saw a decline in automobile sales for the 15th consecutive month. Apart from this, expenses on shipment, factory power generation, employment and entertainment also decreased. The IMF, while talking about the US-China trade war, had reduced the growth rate of 2019 which is like that of 2008-09 when the global recession hit. China is trying to deal with it and spending trillions of Yuan tax cuts.

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