China's growth slides to weakest pace in nearly three decades

Workers are seen at a production line manufacturing tires at a factory in Nantong Jiangsu province China

Workers are seen at a production line manufacturing tires at a factory in Nantong Jiangsu province China

U.S. Treasury Secretary Steven Mnuchin on Monday told reporters he expects to have another telephone call with Chinese officials this week as part of resumed discussions about a trade agreement. China is grappling with a slowdown that has seen output growth slide to the weakest pace in nearly three decades this year.

Adding to mounting pressure on China, Trump will sign an order on Monday seeking to increase the US domestic content threshold for iron and steel in federal procurements, White House trade adviser Peter Navarro said on Fox News.

Government-driven infrastructure investment rose 4.1% year-on-year in the first half of this year, up from 4% growth in the first five months, the data showed. He added that, despite some existing external uncertainties and a complex situation, China maintains steady economic growth.

And the Chinese economy will continue to face "downward pressure" in the second half of this year, the country's National Bureau of Statistics said in a statement. USA soybean exports to China were down $8.5 billion (77%) from August 2018 to May 2019, compared to a year earlier.

"The economic data is still facing downturn pressure [in the second half of the year]".

The administration has gradually increased the amount of Chinese goods subject to tariffs over the past year, from an initial US$34 billion to a total of US$250 billion, and ramped up the tariff rate on those goods.

China president Xi Jinping and United States president Donald Trump had agreed on resuming the trade talks at the G20 summit after a seven-week stalemate. The 6.2% annual rate of growth China reported for April-June was the lowest since China began reporting such data in 1993.

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The 6.2 percent figure released by the NBS was in line with a survey of analysts by AFP and down from a 6.4 percent expansion in the first quarter.

China announced its lowest GDP growth numbers since 1992 on Monday, as the ongoing trade war between the world's two largest economies continues to take its toll.

Weaker Chinese activity carries global repercussions. Auto sales fell 7.8% in June, extending a yearlong contraction in the industry's biggest market.

In May, Trump imposed a 25 per cent tariff on Chinese imports worth $200 billion in response to the lack of progress in reaching a trade deal with Beijing.

"A stronger end to the quarter didn't prevent growth from slowing in Q2 and we see more weakness on the horizon", economists with research firm Capital Economics said in a note. The fight between Beijing and Washington, the two biggest global traders, has disrupted sales of goods from soybeans to medical equipment, battering exporters in both countries and rattling global financial markets. That has shored up growth but set back efforts to reduce reliance on investment, which has pushed debt to levels that prompted credit rating agencies to cut China's credit rating for government borrowing.

"Certainly it is absolute folly to suggest that this is cost free for the USA", said Rufus Yerxa, the president of the National Foreign Trade Council, which represents major U.S. exporters.

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