The Asia Development Bank has lowered its 2019 economic growth expectations for China to 6.3% from a previous forecast of 6.4%. The bank said an "unfavorable trade environment" had dampened its outlook for the world's second biggest economy. Earlier this week, China accused the US of trade bullying after a new round of US tariffs on Chinese goods kicked in - marking a further escalation of the ongoing trade war between the two giants. The ADB said its current growth outlook for 2018 remained unchanged at 6.6% though, "buoyed by strong economic performance in the first half of the year despite a slight moderation in the second quarter". A new round of US tariffs on Chinese goods has come into effect on Monday, September 24th, marking the largest round of tariffs yet in the trade war. The trade war is already weighing on growth, according to ADB figures, causing the contribution of net exports to China’s gross domestic product (GDP) to fall by 0.7% in the first half of the year.
The additional 200 billion dollars (RMB 1768 billion) worth of tariffs the U.S. placed on Chinese goods on Monday will likely reduce China’s GDP growth over the next few years by 0.48%. The electronics industry is likely to be hardest-hit. The US has said its tariffs on 200 billion dollars worth of Chinese products are in response to unfair trading practices by China. China is retaliating with tariffs on 60 billion dollars (RMB 410.4 billion) of US goods, with extra duties, in response - starting from the same time on Monday. Separately, in a further escalation of tensions between the two giants, Beijing over the weekend reportedly declined an invitation from Washington to re-commence trade talks. The International Monetary Fund and World Bank expect China’s economy to grow by 6.6% this year, slightly above Beijing’s own target of 6.5%.