Tariff Fight Adds to China’s Economic Challenges – Urban Christian News

China faces bigger economic challenges than its trade war with the U.S.

Even before tit-for-tat tariffs, growth in the world’s No. 2 economy was already forecast to cool from 6.8 percent last year to a still-robust 6.5 percent this year.

Communist leaders who are trying to engineer slower, more self-sustaining growth clamped down last year on a bank lending boom that encouraged businesses and families to borrow and

spend beyond their means. But it is a tricky balance to strike and communist leaders worry the economy is weakening too much.

Growth in retail sales, a bigger part of the Chinese economy than exports, was weaker than expect in July and close to a 14-year low. Factory output and other sectors also decelerated. Beijing responded by easing lending and boosting government spending.

“We expect the economy to get worse before it gets better,” said Nomura economists in a report.

Trump’s advisers say the slowdown gives Washington leverage in the trade battle.

“Their economy looks terrible,” said Trump’s top economic adviser, Larry Kudlow, at a Cabinet meeting this month.

But analysts closer to China say it is doing better than Americans might think.

“A lot of this economic slowdown is really the result of an intended policy,” said Tai Hui of J.P. Morgan Asset Management in Hong Kong. “The overall growth momentum is still relatively healthy and certainly broadly in line with the authorities’ plans.”

Here is a breakdown of China’s economic strengths and weaknesses:

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ECONOMIC SLOWDOWN

July’s downturn was more abrupt than policymakers wanted.

Growth in…