Chinese economy slows as Trump tariffs bite; FTSE 100 on track to hit new record
Date: 2025-08-15T06:46:54.000Z
Title: Introduction: Chinese economy slows as Trump tariffs bite
Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
New data suggest the Chinese economy slowed in July, as Donald Trump's trade war began to bite at the second biggest economy in the world.
Figures coming out of Beijing last night showed that Chinese industrial production rose at the slowest rate since November and expanded by 5.7% compared with the same point last year, worse than an expected 6%.
Meanwhile Chinese retail sales grew by 3.7% year-on-year in July, its slowest pace so far this year and down from 4.8% the previous month.
Yuhan Zhang, principal economist at The Conference Board's China Center, said:
Firms may be running on existing capacity rather than building new plants…The July industrial value-add breakdown tells a more nuanced story than the weak fixed asset investment headline.
He pointed to China's automobile manufacturing, railway, shipbuilding, aerospace and other transport equipment industries as 'outliers (that) indicate policy-driven, high-tech and strategic sectors are still attracting substantial capital.'
The Chinese CSI 300 stock index rose 0.8% after the release of the economic data, as it fed speculation that Beijing could introduce fresh stimulus in the market.
Meanwhile in the UK, the FTSE 100 blue chip share index is set to end the week at a new record high. It is poised to rise by 0.5% when the market opens at 8:00AM, led by gains in the finance and defence sectors.
The defence sector has been one of the best performers in London's stock market, thanks to a wave of rearmament across much of Europe in the wake of the war in Ukraine.
All eyes will be on Alaska later today, when Vladimir Putin is set to meet Donald Trump. The US president has said he believes the Russian leader is ready to make a deal on the Ukraine war.
8.00pm BST: Donald Trump and Vladimir Putin meet in Alaska
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The US president, Donald Trump, has said that his Chinese counterpart, Xi Jinping, told him China would not invade Taiwan while Trump is in office. Trump made the comments in an interview with Fox News on Friday, ahead of talks with the Russian president, Vladimir Putin, over Moscow's invasion of Ukraine. 'I will tell you, you know, you have a very similar thing with President Xi of China and Taiwan, but I don't believe there's any way it's going to happen as long as I'm here. We'll see,' Trump said during an interview on Fox News' Special Report. 'He told me, 'I will never do it as long as you're president'. President Xi told me that and I said, 'Well, I appreciate that', but he also said, 'But I am very patient and China is very patient',' Trump said. The Chinese embassy in Washington did not immediately respond to a request for comment. Trump and Xi held their first confirmed call of Trump's second presidential term in June. Trump also said in April that Xi had called him but did not specify when that call took place. China views Taiwan as its own territory and has vowed to 'reunify' with the democratic and separately governed island, by force if necessary. Taiwan strongly objects to China's sovereignty claims. Although Washington is Taiwan's main arms supplier and international backer, the US – like most countries – has no formal diplomatic ties with the island.
