China's GDP growth slowed to 6.7% in the second quarter of the year. The pace is above the government's forecast, but at the same time it is the lowest since 2016. In each of the previous three quarters, the annual growth rate was 6.8%.
The slowdown was due to the measures taken by the government to reduce lending, according to the Financial Times. Interestingly, the weakest result comes before the economy is affected by the trade conflict with the United States. Earlier this month, Washington imposed tariffs on Chinese products worth $ 34 billion, to which Beijing reacted reciprocally in a few hours.
"The main reason for the slowdown is the decline in infrastructure investment in the first quarter due to the government's attempts to control debt," said Heibin Zhu, chief economist at JP Morgan's office in Hong Kong. According to Zhu, the government will react to tax cuts and prioritization of infrastructure projects. Last week, the government launched subway and railway line construction projects that were awaiting the final decision until now. In the last six months, investments in infrastructure have only increased by 3%, compared to 15% in 2017.
The lowest result corresponds to market expectations – the goal of Beijing is 6.5% GDP growth this year . Reports of delays were published months ago, for which the Chinese central bank has decided to reduce the amount of reserves that local banks must hold on a deposit, thus freeing up more than $ 100 billion for loonies. economy
. also notes that the measures imposed by the United States still have no effect on the Chinese economy, but this could change in the coming months, according to experts. According to the Wall Street Journal the trade war could take between 0.2 and 0.5 point of Chinese GDP growth next year.
Today, China's National Bureau of Statistics, Mao Shenyong, said the US trade conflict will be "relatively limited", but they will also affect third countries. Today, Chinese President Jin Jinpin meets with European Union (EU) leaders who are supposed to support international trade.
However, foreign badysts are not so relaxed. "We expect a decline in growth in the second half due to a slowdown in credit growth and cooling in the real estate sector, and the trade war with the United States will begin to be reflected," FT said. .
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