Recent figures released by China indicate a increase in fiscal spending of 10.7% in the first six months from a year earlier, a release that clearly supports the view that the slowing economy, driven by the US-China trade war is being addressed. According to an piece on CNBC, China saw its fiscal revenue increase by 3.4% in the January-June period from a year earlier, an official with the ministry said. With the trade war weighing heavy, China reported GDP growth of 6.2% in the second quarter, its weakest pace in 27 years. The Finance Ministry reported that spending growth cooled from 15% pace in the first quarter.
Our Views: We are not going into the full details but the focus of the Chinese Communist Party has been keeping key sectors of the economy firm, giving them support as China and the US will not find a solution to this trade war anytime soon. China does want to ensure that Trump is not re-elected to office, as the Party feels that a Democrat President would be easier on trade in the future. More on this topic in the coming weeks and months. The trade war will not end soon.