“China’s 2nd Quarter growth is the slowest it has been in more than 27 years,” Trump tweeted Monday. “The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal with the U.S., and wishes it had not broken the original deal in the first place.”
Trump went on to repeat a discredited claim that the Chinese — rather than U.S. importers and, indirectly, American consumers — are paying the tariffs he has imposed. “In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!” Trump tweeted.
“The trade war is having a huge impact on the Chinese economy,” Edward Moya, a market analyst at currency trading firm Oanda, wrote in a research note. “As trade negotiations struggle for meaningful progress, we are probably not near the bottom for China’s economy.”
Official figures from the National Bureau of Statistics — which economists tend to take with a grain of salt, viewing them as likely too rosy — showed that the annual growth rate slowed to 6.2 percent in the three months to the end of June, down from 6.4 percent the previous quarter.
This is within the 6 to 6.5 percent band the government has set for this year and was in line with market expectations of a gradual slowdown. Still, it is China’s lowest growth rate since records began in March 1992.
Analysts said the slowdown would make it more difficult for the government to hit its target of doubling the size of the economy between 2010 and next year.
Mao Shengyong, a spokesman for the statistics bureau, characterized the economy as operating “in a reasonable range” and said it was continuing on a “stable, steady and progressive development trend.”
“However, we must also see that the current domestic and international economic situation is still complicated and severe, global economic growth has slowed down, external instability and uncertainties have increased,” Mao told reporters Monday. “The economy is facing new downward pressure.”
China’s export figures were particularly bad, contracting 1.3 percent in the three months to the end of June compared with a year earlier. Shipments of suitcases, plastics, furniture, footwear and textiles were the worst affected, economists at UBS wrote in a research note.
Exports to the United States fell by an additional 8.2 percent in the past three months, particularly after U.S. tariffs on $200 billion worth of Chinese exports rose from 10 percent to 25 percent in May. American data had previously shown the amount of Chinese products on all tariff lists being shipped to the United States had declined by a further 33 percent in May, the UBS economists noted.
But the trade war is also affecting the United States. Customs data from Beijing published Friday showed that Chinese imports of American goods fell 31.4 percent in May compared with a year earlier, widening China’s trade surplus with the United States.
Trump and Xi agreed at a meeting in Japan in June to reopen talks on a trade deal, with the American president holding off for now on imposing additional tariffs on Chinese goods.
But analysts say there is little sign of any progress on the key issues, including China’s support for state-owned enterprises and its practice of forcing foreign investors to hand over technology as the price for entering the huge Chinese market.
“Uncertainty caused by the U.S.-China trade war was an important factor, and we think this will persist, despite the recent tariff truce,” said Tom Rafferty, a China expert at the Economist Intelligence Unit. “Businesses remain skeptical that the two countries will reach a broader trade agreement and recognize that trade tensions may escalate again.”
William Branigin in Washington contributed to this report.