MercoPress. South Atlantic News Agency

China beginning to feel the pinch of the trade war with US

China's August trade surplus dropped sharply to US$34.83 billion, from US$44.58 billion the previous month, while imports continued a four-month decline at 5.6%

China's exports fell by 1.0 per cent on-year in August, official data showed Sunday amid a bruising trade war with the US that has roiled markets in the world's top two economies. The drop comes after a surprise 3.3% rebound in July despite the yearlong battle with Washington and weakening global demand.

China's trade surplus also dropped sharply in August to US$34.83 billion, from US$44.58 billion the previous month, while imports continued a four-month decline at 5.6% on-year, matching the July figure.

Washington imposed new tariffs on Sep 1 as it stepped up its high-pressure campaign to coerce Beijing into a new trade deal.The additional levies come on top of the 25% tariffs on US$250 billion in imports already in place.

China said Thursday that new talks with the US would be held in Washington in early October.

In a sign of continued pressure on the Chinese economy, Beijing's central bank announced Friday it would cut deposit reserve requirements for banks.

The measure would allow an estimated US$126 billion in additional loans to businesses facing an economic slowdown.

China's GDP growth was 6.2% on-year in the second quarter, the lowest rate in nearly three decades.