The last few months were not suitable for work the world’s second-largest economy i.e., China, because the country’s economic growth has slowed down at a very high margin. Yesterday official reports came out, which shows the country recorded a GDP growth rate of just 6.1%, which is the worst figure in the last 29 years. China’s economic growth went down because of a trade war issue with the USA and low demand in the domestic market. Even though a 6.1 percent growth rate is far better than any other country, but if we look at China’s history, then its worst figure to date.
Economists already made their predictions about how China would be suffering if they continue this ongoing trade war with the USA. Many small scales and medium enterprises that were at one point seemed solid failed dramatically because of an increase in tariff rates by Trump administration. Significant sectors like manufacturing, retailers got hit the most because of the geopolitical situation created by the Chinese government.
Many businesses are on the verge of bankruptcy, and that’s why the government had to intervene and helped them by giving short term finances. However, since both countries have signed the first phase of the trade deal recently, things are going on China’s side slowly. Trump administration recently said they have agreed upon the first phase of a trade deal with China, which will be benefiting g for both countries. But, if present conditions considered, then China needed this trade deal in any situation, and eventually, they will have to sustain a healthy relationship with the Trump government. Chinese banks had to lend more than $2.44 trillion of loans to enterprises who are struggling financially. The US economy, on the other hand, has gotten a prediction of growing at a mere 2.2 percent this year, and it’s a good sign for Trump’s 2020 re-election.