China: Growth drops to its lowest level since 2009

Penetrated by the persistent trade dispute with the United States, the Chinese economy has experienced only as weak growth in the third quarter as during the global financial crisis. Experts expect the consequences of the trade war in the coming months to be fully effective.

The Chinese economy grew by only 6.5 percent in the third quarter compared to the same period last year, the statistics office said in Beijing on Friday. The decline surprised. Experts expected 6.6% growth. Growth in the last quarter was the weakest since the first quarter of 2009, when the global financial crisis weighed on the economy.

The United States and China have been covering for months with import duties. Real relaxation in the conflict is not yet in sight. However, since the beginning of the year, China 's economy has grown by 6.7%, said the statistics bureau.

"At the same time, we must also note that the external challenges have increased considerably," said spokesman Mao Shengyong. In the first quarter, 6.8% had been achieved, the second and then 6.7%. However, until now, growth remains above the government's conservative target of about 6.5% for the entire year.

The trade war will hit harder in the coming months

Foreign trade proved to be quite robust in the third quarter, in part because exporters wanted to anticipate special duties imposed by the United States. Experts therefore expect that the trade war will have a much greater impact in the coming months, with most US special duties on imports from China being force than last month.

In order to keep the level of growth relatively stable, the government has already relaxed monetary and fiscal policy, said Max Zenglein of the China Institute Merics in Berlin. "The Chinese government fears a major economic slowdown." It is trying to give a new impetus to growth through infrastructure projects, for example.

However, new threats threatened: efforts to tackle the risks of the financial system could be blocked. China is "facing a combination of external and internal risk factors resulting from the trade war and excessive debt," Zenglein said. Beijing is obliged to act. "This clearly shows that the resilience of the Chinese economy is down."

"The resilience of the Chinese economy is declining"

The fight against debt and financial risks increases the credit costs of companies. In addition, the confidence of market players is declining, said Liu Yuanchun, economics professor at Beijing People's University. "The economy is affected by a slowing trend of investment and consumption." The trade war will also have a more direct impact in the fourth quarter.

US President Donald Trump had imposed special duties on imports from China worth 250 billion US dollars – about half of Chinese exports to the United States. Trump threatens to continue to increase by raising rates. Trump calls for greater market openness, the end of government subsidies and an effective fight against technology theft.

In retaliation, China has imposed $ 110 billion special duties on imports from the United States. Much more is not possible because the United States exported to China last year for only about 130 billion dollars.

rei / dpa / Reuters