General Motors’ July to September vehicle sales in China fell 17.5%, as the US automaker was hurt by a slowing economy amid the Sino-US trade war and by heightened competition in its key mid-priced SUV segment.

General Motors (GM) delivered 689,531 vehicles in China in the third quarter this year, according to a company statement. The drop for the quarter ended September 30 marks the fifth straight quarterly sales decline for GM in China, the world’s biggest auto market.

It delivered 2.26 million vehicles in the first nine months this year, according to Reuters calculation.

As GM and Ford Motor’s China sales extend declines, US car companies’ share of total China passenger vehicles sales fell to 9.5% in the first eight months of this year from 10.7% in the year-ago period, according to the China Association of Automobile Manufacturers (CAAM).

Over the same period, German car makers’ share has risen to 23.8% from 21.6% and Japanese auto makers’ to 21.7% from 18.3%.

In China, GM has a joint venture with SAIC Motor Corp , in which the Buick, Chevrolet and Cadillac are made. It also has another venture, with SAIC and Guangxi Automobile Group, in which they make no-frills minivans and have started to make higher-end cars. GM, the second biggest international automaker in China by sales, sold 3.64 million units in China last year, down from 4.04 units in 2017.

Sales of GM’s affordable brand Baojun dropped 34.9% for the latest quarter, while sales of the mass-market Buick fell 20.6%. But luxury brand Cadillac’s sales jumped 10.9%.

Annual industry car sales in China fell last year for the first time since the 1990s, and they are expected to fall this year too. Sales dropped 6.9% in August from the same month a year prior, CAAM said.

An official at the association said last month that in the next three years the industry could see “low or small negative growth”.

CAAM is set to announce September sales next week.

Meanwhile, China’s stocks climbed to a two-week high on Thursday as investors hoped for a partial trade deal between Washington and Beijing, but a report stating Chinese officials are looking to cut short their visit to the US capped gains. The Shanghai Composite index closed up 0.8% at 2,947.71 points, its highest level since September 26.

The blue-chip CSI300 index also gained 0.8% on Thursday. Among sectors, CSI300’s financial sector sub-index rose 0.2%, the consumer staples sector gained 1%, while the real estate index fell 0.1%.

The smaller Shenzhen index rose 1.4% and the start-up board ChiNext Composite index was higher by 2.7%.

The White House is weighing a currency pact with China as part of a partial deal that could see a planned tariff hike next week being suspended and part of what it regards as a first-phase agreement with Beijing, Bloomberg cited people familiar with the talks as saying on Wednesday.

US President Donald Trump said on Wednesday there was a very good chance that the United States and China will reach a trade agreement, but added that “in my opinion China wants to make a deal more than I do”. The United States will soon issue licences for some of its firms to supply non-sensitive goods to banned Chinese telecoms firm Huawei Technologies, the New York Times said on Wednesday, citing people familiar with the matter.

The United States and China made no progress in deputy-level trade talks held on Monday and Tuesday in Washington, the South China Morning Post (SCMP) said, citing unnamed sources with knowledge of the meetings. The report also stated that the Chinese delegation, headed by Vice Premier Liu He, is planning to leave Washington on Thursday after just one day of minister-level meetings.

Chinese organisers on Wednesday cancelled a fan event on the eve of a National Basketball Association (NBA) exhibition game in Shanghai, the latest fallout in a growing dispute over a tweet by a team official supporting protests in Hong Kong.

But analysts at Founders Securities said the A-share market has already absorbed the downside effect of the trade talks, writing in a note on Thursday “the worst result is the expected result, even if the negotiation’s results are a little above expectation, global capital markets will react positively.”

About 13.42 billion shares were traded on the Shanghai exchange, close to the previous trading session’s 13.04 billion. The Shanghai stock index is above its 50-day moving average and above its 200-day moving average.

Reuters