White House economic adviser Larry Kudlow says the Chinese economy "looks terrible."
Asked by President Donald Trump to assess China's prospects this week at a cabinet meeting, Kudlow asserted that "their economy is just heading south," citing "the latest batch of numbers" from China's markets.
"I'm not a China expert, although I'm boning up as fast as I can, I would just say right now their economy looks terrible," the National Economic Council Director said.
Kudlow also said the latest data showed that "retail sales, business investment is collapsing."
China's economy decelerated from April through June as Beijing tightened credit policy to combat a big rise in debt. The International Monetary Fund expects Chinese growth to slow to 6.6 percent this year from 6.9 percent in 2017, the Associated Press reported.
"Right now, their economy looks terrible," said Kudlow, who served as the Trump campaign's senior economic adviser.
The Chinese currency has fallen more than 9 percent since mid-April.
"There may be some manipulation" in the currency and "investors are moving out of China because they don't like the economy," he added.
China has announced it has prepared a list of $60 billion worth of U.S. goods to hit with duties should the U.S. follow through on a plan to impose tariffs on an additional $200 billion of Chinese goods, as early as next month, according to Bloomberg.
"People are selling their currency... investors are moving out of China because they don't like the economy, and they're coming to the USA because they like our economy," said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
President Donald Trump prodded China to offer more at the bargaining table as the two countries prepared for their first major negotiation in more than two months in an effort to head off an all-out trade war.
“We’re talking to China, they very much want to talk,” Trump said Thursday at the cabinet meeting at the White House. “They just are not able to give us an agreement that is acceptable, so we’re not going to do any deal until we get one that’s fair to our country."
Earlier, China said it will send Vice Commerce Minister Wang Shouwen to the U.S. for talks in late August with David Malpass, undersecretary for international affairs at the Treasury Department, Bloomberg reported.
“It’s a good thing that they’re sending a delegation here -- we haven’t had that in quite some time,” Kudlow told CNBC earlier Thursday. “The Chinese government in its totality must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and non-tariff barriers and quotas to stop the theft of intellectual property and to stop the forced transfer of technology.”
China’s equity market has suffered declines and the yuan has been on a losing streak for more than a month. Chinese authorities, bracing for economic fallout, have introduced measures to support growth ranging from shifting toward a more accommodative monetary policy to boosting fiscal spending.
The Trump administration imposed duties on $34 billion of Chinese goods last month, a move that also prompted immediate retaliation from Beijing. Another $16 billion in levies will be effective Aug. 23. Earlier this month, China announced a list of $60 billion worth of U.S. imports it plans to apply tariffs on, after Trump ordered officials to consider imposing a 25 percent tax on $200 billion worth of Chinese goods, up from an initial 10 percent rate.
(Newsmax wire services Bloomberg and the Associated Press contributed to this report).
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