China, EU close ranks to tackle USA protectionism, trade war

With the commencement of higher tariffs on trade with the United States on this month and the threat of more on another $200 billion in goods trade on the horizon, China is faced with a stiff challenge politically and economically.

Amid EU recriminations that European companies are discriminated against in China, Li assured that “China wants to seek a more balanced trade relation” and that “its determination for greater openness is firm”.

First half fixed asset investment growth was a record low, while industrial output for June matched the slowest growth rate in over two years at 6.0 per cent and missed forecasts centred on 6.5 per cent expansion.

China’s trade surplus with the U.S. widened to a record in June, risking further escalation of a a bitter trade dispute with Washington.

The administration has already imposed 25 percent tariffs on $50 billion in Chinese imports, prompting blow-for-blow retaliation from the Chinese government.

The World Trade Organisation should be reformed rather then destroyed, he said, adding, “There is still time to prevent conflict and chaos”. Putin, meanwhile, said “the time has come to have a thorough discussion on various worldwide problems and sensitive issues”.

Last week, the administration announced 10 percent tariffs on $200 billion worth of Chinese goods, which won’t take effect until at least September.

“If the United States and China do not resume talks in the next two months or so, the conflict will escalate further, with major economic implications for themselves and the global economy”, Louis Kuijs, head of Asia Economics at Oxford Economics in Hong Kong, wrote in a note after the data’s release.

Taken together, the data show an economy continuing to slow under the influence of a multi-year crackdown on excessive financial risk, even as trade war headwinds gather. The government seems to be easing policy gently. “Trade disputes with the USA have hurt market sentiment, and investment is also cooling”.

On a quarterly basis, growth picked up 1.8 percent from 1.4 percent in the first quarter, beating expectations of 1.6 percent growth.

The property market, one of the economy’s key drivers, also slowed as property investment posted its weakest growth in six months, with sales also cooling.

China and the European Union (EU) on Monday agreed to defend the multilateral trading system and rejected unilateral measures imposed by the US.

The yuan, meanwhile, has been sliding, though a weaker currency might help exporters facing the U.S. tariffs.

“Also, the contribution from the service sector to the overall economic growth has increased 1.4 percentage points to 60.5 percent from a year earlier, indicating that the services sector is playing an increasingly more important role in the steady economic growth”, Mao said. “This should make it easier for officials to justify shifting to a more supportive policy stance”.

“I hope that China and the European Union can make concrete progress in the area of economic cooperation, for example by pressing ahead with negotiations for a comprehensive investment agreement”, Chun said.

However that has swelled debt so high that global rating agencies have cut China’s government credit rating.