China slowdown stokes fears for global economy

FEARS for the global economy heightened yesterday as growth in China sunk to a 27-year low.

A trade war with the US has helped put the brakes on the world’s second-largest economy.

Chinese officials said it expanded by 6pc in the three months ending in September, down from the previous quarter’s 6.2pc growth.

It was the weakest growth since China started reporting data by quarters in 1992, and has sent jitters around the world. The slowdown came as: Japan’s exports fall for a tenth month in a row as the trade war hit shipments;

French car giant Renault warned of subdued demand for its cars and trucks worldwide;

Savile Row tailors described being ‘ collateral damage’ as swingeing US tariffs on EU exports, from cashmere to whisky, came into force;

Scottish whisky makers warned sales could drop by a fifth in a year.

The slowdown in China has been fuelled by subdued consumer spending and investment as households have tightened their purse strings. It is also further evidence of the damage caused by a tariff war with President Trump over Beijing’s trade surplus and technology ambitions.

Asian stock markets declined on the figures. China’s benchmark Shanghai Composite Index lost 0.6pc and Hong Kong’s Hang Seng shed 0.2pc. The International Monetary Fund cited the US-Chinese trade war in this week’s decision to cut its 2019 global economic growth forecast to 3pc from 3.2pc.

There are hopes that relations between the world’s two biggest economies could thaw. Trump agreed last week to delay a tariff hike on Chinese goods and said Beijing promised to buy up to 50bn of US farm goods. But officials say the two sides are still working out the details. Car manufacturers are among those suffering from the fall in global demand, including in China. A profit warning from Renault sent shares tumbling 12pc to a six-year low yesterday. It warned sales were likely to fall amid a general decline in demand for cars and vans. Swedish car maker Volvo also reported a fall in orders for trucks.

Japan’s exports shrank for a tenth straight month in September in a sign that falling demand and the US-China trade war was continuing to weigh on its shipments. Closer to home, Trump’s trade war with the EU has begun to bite UK businesses, from whisky distilleries in Scotland to tailors in London’s Savile Row.

Some £6bn worth of tariffs – with 25pc levies slapped by the US on a wide away of EU goods – came into force yesterday.

The Scotch Whisky Association has calculated whisky products will be hit with more than 60pc of the UK’s total tariff bill. It warned exports could tank 20pc within a year. The US accounts for almost 11pc of global sales of single malts.

SWA chief executive Karen Betts said: ‘This is very bad news for our industry.’