Reed Cavendish Wealth Management - China GDP Growth Slows in Q2

Reed Cavendish Wealth Management analysts say China's weaker GDP growth for the second quarter was expected given rising trade tensions with the US.

Reed Cavendish Wealth Management analysts say China’s economic expansion cooled as anticipated in the period from April to June this year as the Chinese government attempts to deal with debt risks hampered activity and growing trade tensions with the US posed a threat to the nation’s exports.

According to the National Bureau of Statistics, China’s economy expanded by 6.7 percent in the second quarter, slightly less than in the first quarter of this year.

Reed Cavendish Wealth Management analysts say June’s activity reading suggested that momentum was slowing, further indication that expansion may be losing steam. Reed Cavendish Wealth Management analysts believe the government may need to make use of stronger measures to boost the economy.

China’s government may need to ease financial deleveraging and concentrate on implementing measures that support growth.

The official data showed that first half fixed asset investment growth reached a record low and that last month’s manufacturing productivity was at its slowest rate of expansion in more than two years.

China’s economy has already felt the strain from a crackdown on debt risks that has pushed up lending costs causing the central bank to inject more capital by reducing reserve requirements for banks.

Reed Cavendish Wealth Management analysts say recent data showed China’s exports increased at a steady pace last month although the true effects of US tariffs may not be evident yet. China’s trade surplus with the United States reached an all-time high last month, fueling the trade conflict with the US that will likely continue for some time.

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Source: Reed Cavendish Wealth Management

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