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Home / Business / China's economic growth drops to a 26-year low

China's economic growth drops to a 26-year low



China's economy took another hit last quarter as the US customs war takes its toll.

China's economic growth slowed to a 26-year low in the last quarter, contributing to a deeper downturn that is weighing on global growth.

The world's second-largest economy expanded by 6 percent in the three months ended September, down from the previous quarter's 6.2 percent, data showed Friday.

An impressive number for most countries, but not for China.

It was the lowest rate since China began reporting data after quarters in 1

993.

US growth was 2.1 percent in the second quarter.

The decline increases the pressure on Chinese leaders to avert politically dangerous job losses as they fight a tariff war with President Trump over Beijing's trade surplus and technological ambitions.

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The decline in China, the world's largest trader, has global consequences. It depresses the demand for industrial components from Asian countries and prices of soybeans, iron ore and other goods, and hits Brazil, Australia and other suppliers.

The International Monetary Fund cited the US-Chinese Customs War as a factor in this week's decision to reduce the global growth forecast from 2019 to 3 percent from the previous 3.2 percent outlook.

Trump told last week to postpone a toll on Chinese goods, saying that Beijing promised to buy up to $ 50 billion US farm goods. Officials say the two sides are still working on details.

Beijing has not yet confirmed the scope of possible purchases of US goods. It is unclear whether Chinese leaders want more steps, including possibly raising penalty rates that are already in place before purchases go ahead.

An even greater impact on Chinese growth appears to come from cooling domestic activity including consumer spending and investment.

Retail sales growth dropped to 8.2 percent over a year earlier in the first three quarters of 2019, down from the first half of 8.4 percent, the National Bureau of Statistics reported.

China's exports to the United States, its largest foreign market, fell 21.9 percent in September from a year ago. This helped to reduce overall Chinese exports by 1.4 per cent. Imports of American goods fell 15.7 percent.

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The latest economic growth figure was the lowest since China began reporting data after the quarter in 1993. Annual growth fell to 3.9 percent in 1990, but fell to 9.3 per cent the following year.

The Associated Press contributed to this article.


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