China's economic growth is expected to slow to a nearly 30-year low this year
- A new Reuters poll has revealed that China's economic growth is expected to slow to 6.2% in 2019.The figure would represent a near 30-year low.
- Rising trade tensions with the US have pushed the Chinese government to step in with economic stimulus efforts in an attempt to boost growth.
- US-based companies with supply chain and sales operations in China have also felt the impacts from the trade war.
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The trade war is putting the brakes on the world's second-largest economy.
According to a new survey from Reuters, China's economy is expected to grow by 6.2% this year, approaching a near 30-year low.
The country's economic growth has been hampered by the hundreds of billions of dollars in tariffs levied by the Trump administration over the last year. Most recently, President Trump raised tariffs on $200 billion of Chinese exports in May.
The Chinese government has resorted to a domestic stimulus package in order to cope with the impact of the trade war. Short-term interest rates have been brought down lower, and the People's Bank of China reduced the reserve requirement ratio for banks six times since last year.
The analysts polled by Reuters expect the People's Bank of China will continue to ease policy for the rest of the year.
China's slowdown is bad news for US companies with high exposure to the Chinese market. President Trump's trade war with China has already sent ripples throughout the US economy and weighed down corporate earnings.
US-based semiconductor firms like Broadcom, Intel, and AMD have all found themselves caught in the trade spat. In early June, Broadcom cut its yearly sales outlook due to the escalating trade tensions dragging down demand for its chip-making business.
Apple is also vulnerable to a slowdown in China as the smartphone maker continues to rely on the region to increase iPhone sales. The company generated a little more than $10 billion (R139 billion) in sales in Greater China region in the second quarter of 2019, down from $13 billion (R181 billion) during the same period last year.
China is expected to release its gross domestic product numbers for the second quarter on July 15.
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