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China’s growth could drop below six percent in the current quarter as the local economy dealt with its “biggest difficulties and challenges ever”, a senior government adviser said Wednesday.

China posted its worst economic performance for 27 years in the last quarter on the back of a bruising trade war with Washington, and negotiators have yet to reach a deal to end the tussle between the world’s top two economies that has rattled global markets.

“This year, China’s economy has faced the biggest difficulties and challenges ever,” said Yao Jingyuan, special research fellow for the State Council — China’s cabinet.

“We shouldn’t exclude the possibility of being below six percent growth in the fourth quarter of this year and even next year,” he told reporters.

The government had fixed a growth target of between 6 and 6.5 percent for 2019.

Hopes for an end to the trade war rose after US President Donald Trump said Tuesday that negotiators were “in the final throes of a very important deal”.

Yao said the government had been able to stabilise employment, the financial sector, trade and foreign investment despite the spat with Washington.