The economic outlook for China is facing headwinds and uncertainties.
Recently released data shows that the Chinese economic growth is decelerating, leading to concerns about the future of businesses affected by the ongoing trade disputes.
China’s economy expanded by 6.2% in the second quarter, marking a decline from 6.4% in the first quarter and a drop from 6.6% growth in 2018. While there are multiple contributing factors to this slowdown, the US-China trade tensions are significantly affecting China’s economic performance. The trade war coincided with China’s pre-existing economic deceleration, exacerbating the situation.
As a consequence of the trade war, neighboring emerging economies are expected to reap benefits from companies shifting production out of China to areas like Vietnam to circumvent tariffs. Doing business in China has become less appealing due to the ongoing uncertainties.
The most significant impact of this economic downturn in China has been on its export sector. It is projected that by the year-end, China’s GDP growth rate will stabilize at around 6.3% according to reports from Business Insider.
