China is facing more and more headwinds in its economic development. China’s economic growth slowed to a record low of 6.2% in the second quarter of 2019 as the shock from the protracted trade war with the United States continued to resonate through the world’s second largest economy. Gross domestic product (GDP) growth slid from 6.4% in the first quarter, according to the National Bureau of Statistics (NBS). Even during the global financial crisis in 2009, China’s quarterly GDP growth did not dip below 6.4%. The figure, nonetheless, falls within the range of Beijing’s target growth rate for the year of between 6.0% and 6.5% and was generally expected. In the first half of the year, China’s economy grew by 6.3%.

China’s exports and imports both contracted in June, but in the first half, foreign trade increased by 3.9% year-on-year, totaling CNY14.67 trillion, with exports growing by 6.1% year-on-year. Imports rose 1.4%, and the country’s trade surplus widened by 41.6% year-on-year to hit CNY1.23 trillion during the same period. Last year, foreign trade in the first half grew by 7.9% year-on-year, with exports rising 4.9% and imports up 11.5%. This shows that the impact of Sino-U.S. trade frictions is “largely controllable”, according to the Chinese authorities.

Other economic data turned out better than expected. Industrial production grew by 6.3% from a year earlier, up from 5.0% growth in May, which was the lowest since February 2002. Within industrial production, manufacturing grew by 6.2% year-on-year, up from 5.0% in May. China’s private sector provided the main driver of industrial growth in June, expanding by 8.3% in June and 8.7% in the first half of the year, compared with 6.2% and 5.0% for state-owned enterprises (SOEs) over the same periods, respectively.

Fixed asset investment (FAI) grew by 5.8% in the January to June period compared to a year earlier, higher than the 5.6% growth reported in May. Investment in property development grew by 10.9% in the first half of the year, down from 15.8% in the year to May. Retail sales grew by 9.8%, up from May’s reading of 8.6% and April’s 7.2% growth. Last month, sales of passenger and commercial vehicles were down 9.6% annually, according to the China Association of Automobile Manufactures (CAAM).

Chinese foreign direct investment amounted to USD3.3 billion in North America and USD9 billion in Europe in the first half, down by a fifth from a year ago. Chinese companies invested just USD12.3 billion in the advanced economies of Europe and North America in the first half of the year, the lowest amount since 2014 and almost a fifth less than last year, according to the law firm Baker McKenzie. The decline has been almost entirely attributed to state-owned firms turning their backs on both regions. Private companies accounted for 94% of the total spent in the first six months. China’s overseas spending, once rampant, has been curbed drastically by the introduction of strict capital controls intended to stop money leaving the country. At the same time Chinese companies have faced increasingly tough scrutiny abroad, particularly under U.S. President Donald Trump’s administration, with many major deals being rejected on national security grounds. China’s global outbound investment continued to fall in the first half of the year, with newly announced merger and acquisition transactions down 60% to USD20 billion.

According to Chinese Vice Premier Liu He, China’s economic performance in the first half of 2019 is in line with expectations. “Macro-economic indicators of growth, employment and consumer prices are all in normal ranges,” said Liu, adding that: “The downward pressure on the economy is the result of cyclical, institutional and structural factors. It’s a normal phenomena in the development of the economy. The key to countering a variety of risks and challenges is to do our own things well.”

The top 500 Chinese companies posted a record high total revenue of CNY45.5 trillion, up 14.8% from a year earlier, Fortune magazine’s Chinese edition reported. Their net profits added up to CNY3.625 trillion, a year-on-year increase of 4.21%, which was slower than the 24.24% surge last year. The annual revenue threshold for companies on China’s Fortune 500 list this year rose 17% to CNY16.238 billion. Sinopec, Petrochina and China State Construction Engineering Corp remained unchanged at the top. Ping An Group held the top spot for non-state-owned enterprises this year.