File photos of US President Donald Trump (L) and Chinese President Xi Jinping (R). Photograph:( Reuters )
The IMF added that China was navigating a "difficult trade-off between growth and stability".
As the Trump administration turns the heat on China in the trade war, the International Monetary Fund(IMF) cut China's growth citing "negative effect of recent tariff actions".
The IMF said China will grow at 6.2 per cent next year, down from an early forecast of 6.4 per cent. It is the slowest growth rate forecast for the Chinese republic since 1990.
"The forecast does not incorporate the impact of further tariffs on Chinese and other imports threatened by the United States, but not yet implemented, due to uncertainty about their exact magnitude, timing, and potential retaliatory response," the IMF said.
The IMF added that China was navigating a "difficult trade-off between growth and stability". The IMF had earlier forecast 6.6 per cent growth for the Communist regime this year. China's economy grew 6.9 per cent last year.
President Trump has threatened to impose tariffs on all Chinese goods entering the US, a scenario which the IMF said would have a severe impact on the Chinese economy.
The Monetary Fund further cautioned that China's growth could fall by as much as a full percentage point or more by 2019 if the "worst-case" scenario materialises, involving more tariffs by the US, a Chinese counter-response and collapse in business confidence.
Growth is expected to "remain strong elsewhere in emerging and developing Asia", the IMF said, forecasting India's growth to increase to 7.3 per cent this year and 7.4 per cent nex year. However, it said that trade uncertainty would impact the ASEAN-5 - Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.
The International fund set a 5.3 per cent growth forecast for the Southeast countries this year, but lowered it to 5.2 per cent next year.