China's economy showing warning signs as Trump trade war drags on

China’s economy is starting to show signs of distress as a trade war between the world’s two largest economies continues.

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On Monday, China announced that its economy grew at a rate of 6.6 percent in 2018 – the slowest pace since 1990.

China’s manufacturing sector has also showed signs of contraction.

Last month, China’s Purchasing Managers’ Index was 49.4 – the weakest level recorded since February 2016.

The major Chinese stock index suffered double-digit losses in 2018. The Shanghai Composite fell more than 24 percent for the year, its largest annual decline in a decade.

Another indicator that could spell longer-term trouble for Beijing is a slowing birth rate. Last year births dropped to their lowest level in nearly 60 years, according to a report from The Associated Press.

White House officials have acknowledged the trade spat could put pressure on domestic data as well.

During an interview with FOX Business on Friday, White House Economic Council Director Larry Kudlow admitted that trade talks with China would impact both the U.S. and world economies.

“Will the China trade talks affect the economy? Yes because the China trade talks will have an impact on future growth in the United States and prosperity and jobs and profits. And actually world growth.”

After a dizzying performance to end 2018, the U.S. stock market has started off the new year strong, boosted by the prospect of easing trade tensions with China.


On Monday, the International Monetary Fund warned the ongoing trade dispute between the U.S. and China could pose a meaningful risk to global growth moving forward. The global organization lowered its growth forecast for the world economy to 3.5 percent for 2019.

Trade officials are expected to meet next week to continue discussions.