China’ GDP Forecast Grew Amid Trade War

Growth forecast of China increased this year, which is unexpected amid the escalating trade war with the United States, with a momentum of deleveraging and putting an end to the pollution which has a lesser impact.

The poll of Reuter's forecast growth shows a 6.6 percent growth this year compared to the 6.5 percent expansion growth and the most recent update to be 6.9 percent from 6.3 percent. This resulted in a slowdown of 6.9 percent last year but it is still in line with the 6.5 percent target of the government.

The quarterly growth of the second Asian nation revised at a better rate of 6.8 percent compared to the previous data as the property market of the data improved notwithstanding restrictions on home purchases in various cities and high consumer demand.

Economists anticipated big momentum to be at ease but a gradual pace for the rest of the year with the growth forecast of 6.7 percent, 6.6 percent and 6.5 percent for the second, third and fourth quarter respectively,

The GDP data for the second quarter and June activity data will be published on Monday at 0200 GMT.

There is an optimistic outlook for the whole year despite better trade with the United States. Forecasts were mostly taken prior to the United States raising their stakes through 10 percent tariffs on an extra $200 billion worth of Chinese imports, announced on Tuesday.

The worsening trade war has added uncertainty on the outlook that also affected the Chinese financial markets in the past few weeks.

With sluggish credit expansion and domestic demand ranging from government-funded infrastructure investment to consumer spending, China’s economy seems to be showing signs of struggle and weakening.

The huge export sector may add impact on tariffs with the U.S. giving 25 percent tariffs on $34 billion of Chinese imports on Friday, which then triggered Beijing for rapid retaliatory measures on the same amount of U.S. Chinese exports to China.

Moreover, the uncertainty caused by trade war pushed the corporate borrowing costs higher in reaction to soften the economic effect of a multi-year easing on riskier lending. More cash were accumulated through lesser reserve requirements for lenders three times this year.