China’s growth dropped to its lowest level in nearly three decades as the world’s second largest economy continues to feel the pain from its trade conflict with the United States.
The country’s gross domestic product grew at 6% between July and September, my CNN Business colleague Laura He reports from Hong Kong. That’s the weakest quarterly growth rate since 1992, and down from 6.2% the previous quarter.
The worse-than-expected figure emerged just one week after the United States and China reached a tentative trade truce to avert more damage. That agreement could relieve some pressure on China’s economy. But it’s far from a cure-all.
“Ongoing negotiations may have some positive impact on business [sentiment], but despite the potential mini deal, most of the US tariffs on imports from China remain, hurting Chinese exports,” said Chaoping Zhu, global market strategist at JPMorgan Asset Management.
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The Shanghai Composite dropped 1.3% Friday, erasing gains the index had made since news of an agreement.
The Chinese data showed some pickup in September. Growth in industrial production jumped to 5.8% from 4.4% the previous month, and retail sales rose 7.8% in September compared to the same period one year ago.
But experts warn that any recovery may be short-lived.
“Cooling global demand will continue to weigh on exports, fiscal constraints mean that infrastructure spending will wane in the near-term, and the recent boom in property construction looks set to unwind,” Julian Evans-Pritchard, senior China economist for Capital Economics, said in a research note to clients.
Analysts at Nomura see China’s GDP growth dropping to 5.8% in the fourth quarter of 2019 as exports are hit again by the slowing global economy and the trade conflict.
China’s economy is slowing down – that could mean a trade deal with US
