China’s current GDP data shows that the Asian power is struggling to achieve its goal of high-quality economic development against an intensifying trade war with the United States of America.
As the trade dispute between the world’s two largest economies doesn’t seem like it’ll end soon, Chinese leadership will be forced to give up some reforms aimed at minimizing financial stability risks.
Analysts have cautioned that China may face stagflation. It is a portmanteau of stagnation and inflation; economic stagnation along with higher inflation. That could hurt the world economy, balanced only by robust growth of China’s domestic demand.
The world’s second-biggest economy expanded 6.5% from last year’s July-September period. The National Bureau of Statistics emphasized that it continued to stay stable with good and growing momentum despite the trade war.
But the slowest pace of economic growth was the January-March period in 2009. This was when the world economy endured from the wake of the 2008 global financial crisis initiated by the collapse of Lehman Brothers, a U.S. investment bank.
Since early 2018, U.S. president Donald Trump and Chinese President Xi Jinping have been engaged in a discussion of tariffs wars on hundreds of billions dollars of each other’s imports.
China and the United States haven’t resolved the trade battle through current diplomacy. Tensions between them are increasing, as Washington has been serious about containing Beijing’s economic and political influence in the global arena.
At a press conference in New York in late September, Trump said China wants him and his Republican Party to lose the next election. After all, he has been gradually applying pressure on China’s leadership to curb the huge U.S. trade deficit.
Beijing and Washington have also been divided over Taiwan, North Korea and the South China Sea; they’re home to the world's busiest sea lanes. China has claimed them all.
Reference: Trade war may hamper China’s goal of “high-quality” growth
