China’s second-quarter GDP growth of 6.7% is in line with expectations, putting the country within its aim of achieving growth of around 6.5 percent for the full year.
On Monday, China reported that the economy grew 6.7 percent in the three months to June compared with a year ago. The record meets the government’s expectations but is somewhat lower than 6.8 percent in the first quarter of 2018.
The headline figure shows an impact from the current escalating trade tensions with the US as well as weakening investment in infrastructure by country’s usually exuberant consumers. Chinese stock markets have been struggling between the major trade dispute between the US and China.
“I think it’s a little bit tricky at this moment. On the one hand, China commits to financial deleveraging. On the other hand, China sees growth moderation and growth slowdown is a risk for the economy as well,” said Hao Zhou, senior emerging-market economist for Asia at Commerzbank.
A small but emerging number of Chinese companies have reneged from their score. In addition, the currency has vanished some of its value.
The U.S. hits another $200 billion in Chinese goods with tariffs while China still depends on making and exporting clothes, car parts, toys, and other goods to the U.S. and other countries. US President Donald Trump recently said that the tariffs could affect more than $500bn of Chinese goods.
“The EIU is more concerned about slowing domestic demand within China’s economy, with investment persistently weak and consumption also having slowed, and these are much more important drivers of growth than exports,” Tom Rafferty at the Economist Intelligence Unit said.