Homegrown structural challenges and Donald Trump’s trade wars are increasingly weighing on China’s economy and showing up in its economic data.

Data released by China’s National Bureau of Statistics this week showed retail sales and industrial output are growing at their weakest rate this year, while the four-year decline in its property market is continuing.

China is dealing with external and internal threats to its economy.Credit: AP

The effects of the relatively modest stimulus measures Beijing rolled out in the final quarter of last year appear to be waning and the government’s efforts to combat “involution” – over-capacity and fierce price competition that is generating deflation – appear to be contributing to the slowdown in growth.

China’s trade data this month showed that the impact of Trump’s tariffs is starting to bite, with exports to the US crashing by 33.1 per cent and total exports growing at only 4.4 per cent in August, against the 7.2 per cent growth in July.

With the US exhorting Europe to punish China for buying oil from Russia by imposing 50 to 100 per cent tariffs, Mexico planning a 50 per cent tariff on imports of Chinese vehicles and other developing economies looking at similar measures to protect their industrial bases from a flood of Chinese exports diverted from the US, China’s export-driven economic strategy is under increasing pressure.

Without another, larger, bout of stimulus – which Xi Jinping has steadfastly refused to contemplate – China’s ability to achieve its growth target for this year of “around 5 per cent” is under threat, particularly as the base for the December quarter was inflated by last year’s interest rate cuts and subsidies for trade-ins of household goods and vehicles, the impact of which has waned over the........

© The Sydney Morning Herald