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The tariff battle with the U.S. will probably cost China 700,000 jobs, or more in the event of further escalation.

The job losses would come if the U.S. imposes 25 per cent tariffs on US$200 billion in Chinese exports and China retaliates by devaluing its currency by 5 per cent and adding to levies on U.S. goods, according to economists led by Haibin Zhu at JPMorgan Chase & Co. If China doesn’t retaliate at all, 3 million people could lose their jobs, they wrote in a research note Tuesday.

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The study highlights the more profound impacts of the tariff battle on the world’s second largest economy, which is grappling with a slowing pace of growth and a massive debt pile. Things may get even worse: if the U.S. imposes 25 per cent tariffs on all Chinese imports and China retaliates with the levies already announced, the measures will mean 5.5 million lost jobs and 1.3 percentage points cut off gross domestic product growth.