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Beijing – China’s economic growth slowed further in the latest quarter, adding to challenges for Communist leaders as they fight a tariff battle with Washington.

The world’s second-largest economy expanded by 6.5 percent over a year earlier in the three months ending in September, government data showed Friday. That was down from 6.7 percent for the quarter ending in July and 6.8 percent for the year’s first three months.

Forecasters expected China’s economy to cool after Beijing tightened credit controls last year to rein in a debt boom. But the slowdown has been sharper than expected, prompting Chinese leaders to reverse course and encourage banks to lend.

Communist leaders express confidence their $12 trillion-a-year economy can survive the conflict with President Donald Trump. But export industries have begun to suffer from American tariff hikes of up to 25 percent on Chinese goods.

Growth in retail spending and investment, which are much bigger parts of the economy than trade, slowed in the latest quarter, though to still-robust rates.

Retail sales rose 9.1 percent over a year earlier in the first nine months of the year, down 0.1 percent from the first half, according to the National Bureau of Statistics. Investment in factories and other fixed assets rose 5.4 percent in the first three quarters, down 0.6 percent from the first half.

Beijing has rejected U.S. pressure to scale back industrial development plans Washington says are based on stealing or pressuring foreign companies to hand over technology. American officials worry they might threaten U.S. industrial leadership.

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