The International Monetary Fund on Wednesday said it was lowering China's economic growth forecast for 2019 and 2020, citing "uncertainty" over the trade war between Beijing and Washington.

The world's second-largest economy is expected to grow by 6.2 percent this year and 6.0 percent in the next, the IMF said, down from previous forecasts of 6.3 percent and 6.1 percent, respectively.

"Everybody loses in a proactive trade war. If trade is threatened, if trade is damaged, growth will suffer," Kenneth Kang, deputy director of the IMF's Asia and Pacific department, said at a press conference in Beijing to present the findings of a visit to China.

Talks to resolve the trade war between the world's two biggest economies have stalled, leaving in place bruising tariffs on $360 billion worth of two-way commerce.

"Uncertainty around trade tensions remains high and risks are tilted to the downside," the IMF said in a statement.

The downgrade comes as China's government launches a series of measures to reverse the downward trend, with policymakers turning the credit taps back on and rolling out massive tax cuts.

The policy stimulus is sufficient to stabilise growth in 2019 and 2020 despite the recent US tariff hike, the IMF said.

The IMF's forecast remains within the government's official target of growth ranging between 6.0 and 6.5 percent this year, down from 6.6 percent in 2018.

Recent economic data show China's economy stumbling.

China's manufacturing activity contracted more than expected in May, official data showed last week, slumping to a three-month low.

Industrial production also slowed sharply in April.

The trade war shows no signs of abating anytime soon with China taking aim at American firms in recent days and announcing plans to soon release its own blacklist of "unreliable" firms -- a move analysts say is likely to target US companies.

China on Wednesday imposed a $23.6 million fine on US auto giant Ford's local joint venture for "price fixing".

Over the weekend, Chinese authorities also targeted US courier and logistics firm FedEx, with state media announcing an investigation into the company over misdelivered packages.

China on Tuesday issued a pair of travel alerts to its citizens going to the United States, warning them of police harassment and crime.

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China factory activity contracts in May
Beijing (AFP) May 31, 2019
China's manufacturing activity contracted more than expected in May, official data showed Friday, amid a bruising trade war with the United States and slowing domestic demand. The Purchasing Managers' Index (PMI), a gauge of factory conditions, came in at 49.4 for the month, down from 50.1 in April, according to the National Bureau of Statistics (NBS). Marking a three-month low, the figure fell below the 50.0 mark separating expansion from contraction. Economists surveyed by Bloomberg had predic ... read more