By Jon Dougherty
(NationalSentinel) As the U.S.-China trade war stretches on, Beijing’s economy is getting the worst of it as indicated by new economic figures that show a further slowdown in August.
Chinese industrial production growth slowed to its lowest level in 17 1/2 years last month amid weakening demand in the U.S., the country’s largest trading partner, and domestically.
Retail sales in China also slowed as did investment in new business according to government data released Monday — all of which reinforce views among many analysts that China will cut key interest rates this week for the first time in more than three years to stunt further economic decline,Â Reuters reported.
The Chinese government has implemented several growth-spurring initiatives since last year, but the globe’s second-biggest economy has yet to stabilize. Now, analysts believe that Beijing will have to introduce even more stimulus in order to boost growth.
Figures from August indicate that industrial output fell 4.4. percent from August 2018, which is the slowest pace since February 2002. August’s figure also was a decline from July’s 4.8 percent.
In particular, the value of delivered industrial exports fell 4.3 percent on-year, the first monthly decline since at least two years, Reuters records showed, reflecting the toll that the escalating Sino-U.S. trade war is taking on Chinese manufacturers.
The protracted trade war escalated dramatically last month, with President Donald Trump announcing new tariffs on Chinese goods from Sept. 1, and China letting its yuan currency sharply weaken days later.
After Beijing hit back with retaliatory tariffs, Trump said existing levies would also be raised in coming months, in October and December.
Both sides are set to meet again this month, though it’s unclear whether there will be any trade agreement breakthroughs.
During an appearance on “Fox News Sunday,” presidential counselor Kellyanne Conway said President Trump is in no hurry to make a deal with China. As opposed to previous presidents, she said he’s not interested in making a half-hearted agreement just for the sake of scoring political points ahead of his reelection bid next year. Rather, she added, he wants a substantial long-term deal so that China stops “screwing” Americans and American workers.
It stands to reason that China would suffer economically in any trade battle with the U.S., since America has been the primary destination for most of China’s exports, running about a $500 billion deficit annually.
Meanwhile, the U.S. economy continues to grow. Unemployment has fallen to 3.7 percent which is considered full employment by most economists, and factory orders have been climbing, along with industrial jobs.
U.S. GDP (gross domestic product) increased 2.0 percent in the third quarter after rising 3.1 percent in the second quarter.
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