This article was originally published on ETFTrends.com.
While the escalating trade war conflicts have affected China's markets and country-specific ETFs, the Chinese government is not going to take it sitting down and has taken steps to hit its growth targets.
Year-to-date, the iShares MSCI China ETF (MCHI) dropped 5.4%, SPDR S&P China ETF (GXC) decreased 5.0% and Xtrackers CSI 300 China A-Shares ETF (NYSEArca: ASHR ) declined 18.0%, with most of the loses coming in across recent months in response to the escalating trade tiff between Beijing and Washington D.C.
State-run Xinhua news agency recently stated that China will maintain its economic growth within a reasonable range and achieve his year's target despite the challenging trade environment, Reuters reported.
Beijing has already pledged to now allow the trade friction to cause large scale unemployment.
“We must do a good job in stabilizing employment, finance, foreign trade and investment, and expectations,” Xinhua said, citing a statement released after a meeting of ruling Communist Party’s Politburo.
China’s economy will face new problems and new challenges due to the “significant changes in the external environment”, according to the Politburo meeting - chaired by President Xi Jinping. “We must seize the main contradictions and take targeted measures to solve them."
China is adapt to any U.S. tariff measures, whether they are tariffs on $16 billion or $500 billion of goods, according to a Chinese government official.
China's Growth Targets
Despite the economy slowing slightly to 6.7% in the second quarter, China's growth targets were still above the official 2018 projection of about 6.5%.
Nevertheless, the economy will face increasing challenges due to moderating growth in the second half.
“But for now, today’s data are consistent with our view that China’s economy is on track to slow further this quarter and next, triggering additional policy easing,” Julian Evans-Pritchard, senior China economist at Capital Economics, told Reuters.
To shore up its economy, Beijing has increased infrastructure investment in targeted areas, supported innovations and lowered corporate costs, according to the Politburo. The Chinese government has already put more money into infrastructure projects and eased borrowing curbs on local governments to bolster growth.
“Fiscal policy should play a greater role in expanding domestic demand and promoting structural adjustments,” according to the Politburo.
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