China’s economy is losing momentum against the backdrop of the trade protectionism of the US. The second largest global economy finds it more difficult to ensure robust economic growth amid the full-blown trade war. China’s GDP slowed down to the weakest pace since Q1 of 2009 when the world financial crisis was in full swing. The National Bureau of Statistics reported that GDP growth eased to 6.5% in annual terms in Q3 of 2018. Apart from domestic economic headwinds, the battle of import tariffs is mainly to blame for the economic decline. Besides, for several years in a row China’s financial watchdog has been taking measures to tackle debt risks. Experts say that such a policy also dents economic growth.
Notably, the actual GDP reading undershot expectations for a 6.6% increase, according to the median forecast by Reuters. Nevertheless, despite a slowdown, China remains the biggest holder of the US debt. This was confirmed by the US Treasury Department in a report for August. Interestingly, Russia is reducing its holdings in the US Treasury bonds. Recently, the Bank of Russia sold off US bonds worth $810 million. But it has not boosted economic growth in Russia. Its GDP is still unable to pick up steam.
