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The ongoing trade war with America gives China a 'big jolt'

Sunday - October 20, 2019 2:38 pm , Category : WORLD
China's economy affected by the trade war
China's economy affected by the trade war

After all, China realizes the American supremacy in world trade!

OCT 20 (WTN) - The world's largest US economy with $ 20.49 trillion has been the king in the global economy for years. The American economy and its currency are so strong that most of the business in the entire world is done in US dollars. At the same time, China's economy is the second-largest economy in the world with $ 13.41 trillion. As you know that China is an ambitious country and China has been trying to compete with the US economy for a long time. That is to say in clear terms, these days there is a domination fight amidst global trade and mutual trade between America and China is going on, which is being called ‘trade war’.

But the major impact of the ongoing ‘trade war’ with America is now being seen on China's economy. For your information, let us know that China's GDP growth rate has come down to the lowest level of 30 years in the third quarter of the current financial year. The Chinese Government has released the third-quarter GDP figures, indicating that China's economy has suffered a major setback due to sluggish domestic demand and trade war.

According to China's National Bureau of Statistics, China's GDP rate in the July-September quarter was just 6 per cent. It was 6.2 per cent in the first second quarter. The main reason for this decrease of 0.2 per cent in China's GDP growth is attributed to the lack of demand in the domestic market and the ongoing trade war with America. It is a cause of concern for an ambitious country like China that it has the worst GDP growth rate of the Chinese economy in any quarter since 1992.

The reduction in GDP growth rate is a major setback for China. Last year China's growth rate was 6.6 per cent. According to that, it is a matter of concern for China to have only 6 per cent of GDP growth rate in the July-September quarter this year. However, the Chinese Government had set an economic growth target of between 6 and 6.5 per cent for 2019. But even a reduction of GDP growth rate to just 6 per cent in the third quarter is a major challenge for ambitious China. Another reason for China's concern is that the International Monetary Fund has lowered China's GDP growth estimate from 6.2 per cent to 6.1 per cent.

After the release of the third quarter data can be said to have seen the Chinese economy stagnate over the course of three quarters. The third-quarter GDP growth is a warning to China that it will have to be aware of serious economic conditions domestically and globally. According to experts in China's economy, there is tremendous pressure on the domestic market due to the continued softening of the global economic crisis and the increasing uncertainty in external trade.

As we told you earlier, China is an ambitious country. In such a situation, it can be said that China is not going to give up on the American Trade War. China has also taken several steps to boost its economy. To increase domestic demand, the Chinese Government is cutting taxes to provide relief to the common people. Also, many restrictions have been lifted to attract foreign investors to the stock market.

Not only this; the People's Bank of China, the Central Bank of China, has issued $ 28 billion or 200 billion Renminbi to the banks in the banking system through the medium-term lending facility, thereby liquidity can be increased in the market. However, this effort of the Central Bank of China is not seeing any special effects. At the same time, for your information, let us know that automobile sales have been declining for the 15th consecutive month in China. Apart from this, expenses on shipments, factories, power generation, employment, and entertainment have also come down.

Indeed, China's economy is unable to face the US fee hike. At the same time, China's technological plans have also been hit, which has affected China's GDP growth rate. There are still uncertainties about the trade agreement between America and China all over the world. According to experts, the charges, which come into effect on December 15, will have a major impact on the 2020 economy. Although, US President Donald Trump says that he is close to an agreement with China, but officials say that much is left to do.

That is it is clear that China is suffering a lot from the trade war going on with America. Now it has to be seen where the trade war between the two largest economies of the world comes to an end. It is not that trade war has affected only the Chinese economy, but the American economy has also been suffered from a trade war. But this trade war has dealt a major blow to China's economy and after 27 years the quarterly GDP growth rate has come down. Now it has to be seen whether the Beijing Government takes some measures so that they can face and respond to the economic challenge facing the Americans.