Economic data from China's government showed the country's gross domestic product grew by 6.2% in the second quarter, which represents the slowest pace of growth in 27 years.
China's National Bureau of Statistics said in a statement that its economy will continue facing "downward pressure" in the back half of the year, CNN reported.
The country attributed its poor performance to rising "external uncertainties" at a time when the economy "is still in a complex and grave situation."
U.S. President Donald Trump wrote in a series of Tweets Monday morning that American tariffs on Chinese goods are "having a major effect" on China's economy.
"Thousands of companies" are abandoning their operations in China in favor of non-tariffed countries, Trump said.
....with the U.S., and wishes it had not broken the original deal in the first place. In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!
— Donald J. Trump (@realDonaldTrump) July 15, 2019
This statement by Trump has been widely debunked: the tariffs are paid by importers of Chinese goods, which are typically American companies or U.S.-registered units of foreign companies, according to Reuters.
"Importers often pass the costs of tariffs on to customers, for the most part manufacturers and consumers in the United States," according to Reuters.
HSBC Economist's Takeaways
China's GDP growth in the second quarter is still "pretty high" considering it is expanding off an $11-trillion baseline, Julia Wang, HSBC's Greater China economist, told CNBC in an interview Monday.
Yet a slowdown in manufacturing in China is a concern — and is only partly due to the trade war, she said.
Chinese manufacturing investment has been declining over the past few years due to a policy of deleveraging, Wang said.
Rachel Ziemba, founder of Ziemba Insights, separately told CNBC that China established a track record over the past decade of reporting data that has "gotten better, then worse, then better." The most recent GDP reading is not a "crisis," but more of a "structural slowdown," she said.
It is likely China would have reported disappointing metrics if there was no ongoing trade war, Ziemba said.
Companies have been leaving China for several years due to rising costs in the country, she said.
"I don't see this as a crisis moment, but I also don't see this as a story of global growth doing incredibly well."
Trump Tweets Up A Storm About China As Tariffs Jump To 25%
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