section_path: Effects/China
section_name: China
paragraph_text: China
  
  In April 2018, China announced that it would eliminate laws that required global automakers and shipbuilders to work through state-owned partners. President of China and CCP general secretary Xi Jinping reiterated those pledges, affirming a desire to increase imports, lower foreign-ownership limits on manufacturing and expand protection to intellectual property, all central issues in Trump's complaints about their trade imbalance. Trump thanked Xi for his "kind words on tariffs and automobile barriers" and "his enlightenment" on intellectual property and technology transfers. "We will make great progress together!" the president added.
  
  As a response to the trade war, China increased the personal income tax threshold from CN¥3,500 to CN¥5,000 (US$705) in January 2019, and reduced the top tier of value added tax from 16% to 13% in April 2019. Income tax deductions were also allowed for family care, medical and educational expenses, as well as for mortgage interest. The tax cuts were worth around CN¥2.3 trillion (US$324 billion).
  
  In May 2019, China's industrial output growth fell to 5.0%, which was the lowest rate in 17 years. Exports fell by 1.3% in June compared to the previous year; imports declined 8.5% in May and 7.3% in June. According to an analysis by Peterson Institute for International Economics published in June 2019, China had lowered tariffs on imports from countries other than the U.S. from an average of 8.0% to 6.7%, while average tariffs on U.S. imports rose from 8.0% to 20.7%.
  
  In December 2019, the South China Morning Post reported that, due to the trade war and the Chinese government's crackdown on shadow banking, Chinese manufacturing investments were expanding at the lowest rate since records began. Economic growth rate for 2019 was 6.1%, the slowest since 1990.
  
  The trade war resulted in a significant growth of economic ties between China and the European Union, primarily as a result of the redistribution of commodity flows.
  
  The trade war contributed to a rise in Chinese nationalism; the South China Morning Post reported that the conflict helped the Chinese Communist Party "shore up much-needed domestic support". The external pressure of the trade war allowed Chinese leader Xi Jinping to point to the United States' actions as a reason for China's economic slowdown.