DECOUPLING: China economic slowdown sparks debate over what caused the slump, and how Beijing should intervene.

Industrial production growth – an important gauge of manufacturing output – slowed to 4.4 per cent in August, a new 17-year low, while retail sales growth slowed to 7.5 per cent. Fixed asset investment slowed to 5.5 per cent in the first eight months of year, down from 5.7 per cent in the first seven months, despite government efforts to boost local government infrastructure investment.

While the trade war has been commonly blamed for a slowdown which also saw China’s economy grow at its lowest rate on record in the second quarter of this year, others have pointed to challenges to growth that predate last July, when the first tariffs were enacted, such as the deleveraging campaign that started two years ago to reduce debt and risky lending.

“The economic figures would not be that good even without the trade war. The slowdown was already projected,” Hao said. “Instead, policymakers are using the occasion to accelerate long-awaited but delayed reforms, such as interest rate liberalisation.”

China has structural defects. Trump is pushing on them.