China's economic growth slows to 6.5% amid trade battle

Chinese stocks traded at a four-year low on Tuesday. File

Chinese stocks traded at a four-year low on Tuesday. File

China's economy grew at a slower quarterly pace than expected, expanding 6.5 per cent in the three months ended September, as the country's trade war with the United States exacted a toll on exporters and manufacturers.

The Chinese economy grew 6.5% in the third quarter from a year earlier, slower than the second quarter, the National Bureau of Statistics said today.

The median forecast of economists polled by both Bloomberg and Reuters called for a 0.1 per cent drop in the GDP growth rate to 6.6 per cent in the July to September period - the lowest reading since the last quarter of 2008 when China's growth tanked in the aftermath of a global financial crisis.

"Faced with an extremely complex environment overseas and the daunting task of reform and development at home", China's economic growth remained generally steady, said NBS spokesman Mao Shengyong.

Authorities are also likely to start once again pumping money into infrastructure projects, after slowing down the projects a year ago as a matter of financial prudence.

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The standoff comes as Beijing is also battling to tackle a mountain of debt, with credit tightening and falling infrastructure investment.

Growth in retail spending and investment slowed, though to still-robust rates.

The measures have also affected financial confidence, as Shanghai's stock market has fallen by about a quarter in 2018, and the yuan has declined by about 9 percent against the U.S. dollar. Beijing's new levies will be 5-10 percent.

Exports still drive a significant chunk of China's economy and Washington's tariffs targeting cars, machinery, electronics, consumer appliances and others have led many firms to shift production and hold off on further China investment. Exports have begun to weaken after President Donald Trump imposed tariff hikes of up to 25 percent on Chinese goods in a fight over Beijing's technology policy.

Shanghai's stock market has fallen by roughly a quarter this year, while the yuan has slipped about nine percent against the dollar.

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