IT HOLDS devastating implications for the global economy — but it seems China wants to keep Donald Trump’s trade war as quiet as it can.

The Chinese Government is restricting its coverage of the trade war with the US, so as not to spark fears among its 1.37 billion citizens.

Chinese reporters have reportedly been given specific instructions on how to cover the events, with warnings to tread especially carefully around the term “trade war”.

CHINA RESTRICTS TRADE TALK

Journalists working for the Chinese media have been instructed not to “over-report” on the imposed tariffs, and to take extra care not to link it to drops in the stock market and the depreciation of the yuan, China’s currency.

According to the South China Morning Post, one source from an official Chinese media outlet said: “When you report a fall in the stock market index or a weakening in the yuan’s exchange rate, you can’t use ‘trade war’ in your headline.”

Another said local media outlets have been advised to republish what state-controlled media writes about it and not “overplay” the issue.

In its latest editorial on the trade war, published yesterday, state media mouthpiece the Global Times called for a compromise between Beijing and Washington.

“The trade war hurts both China and the US,” it said. “China must make resolute strategy from the very beginning to maximise its impact on the US and resilience here at home. It needs to overwhelm the US with capability and willpower to make Washington compromise.”

It’s a marked change from Beijing’s usually aggressive approach to countries it deems hostile.

Even Australia has come under the firing line, with repeated threats from China’s state media outlets over foreign influence laws, our position on the South China Sea and our alliance with the US.

In the lead-up to the trade war, the Chinese Government ordered state media not to report on comments from Mr Trump or US officials over the trade conflict.

A propaganda notice leaked online earlier this month instructed the media not to “attack” Mr Trump’s “vulgarity” or be insulting.

“Don’t relay comments from Trump, from US government spokespersons, or from US officials,” the notice said, according to censorship-monitoring site China Digital Times. “Don’t relay US news reports or commentary on the trade conflict without waiting for response from the Ministry of Commerce. Don’t attack Trump’s vulgarity; don’t make this a war of insults.”

It went on: “All media should prepare well for protracted conflict. Don’t follow the American sides’ fluctuating declarations.”

It also reinforced that media must not mention “Made in China 2025”, a long-range development plan for creating powerful Chinese entities in such areas as information technology, robotics, aerospace equipment, electric vehicles and biopharmaceuticals.

The warnings come as the Chinese Government worries over its slowing economy — a move that could affect Australia.

WHY THE CHINESE GOVERNMENT IS WORRIED

The trade war is just part of a wider problem for the Chinese Government — the country’s slowing economy.

The country’s economy has slowed down faster than expected, while China continues attempting to tackle a sea of ingrained debt — just as trade tensions with the United States are heating up.

China’s economy grew by 6.7 per cent in the second quarter of the year, marking its slowest rate of quarterly growth in nearly two years.

This slowdown is modest, but the US-led trade war has only just begun, and it’s set to accelerate.

Earlier this month, Washington and Beijing imposed tariffs of 25 per cent on $US34 billion ($A45 billion) of each other’s exports. US tariffs on an additional $16 billion ($A21 billion) of Chinese goods are on the way, with additional tariffs of $200 billion ($A269 billion) being readied.

In other words, this is just the beginning of China’s pain, and it’s expected to be felt more as the year goes on.

China generates as much as a third of global growth, which could make this a concerning sign for the world economy.

If the trade war escalates further, China won’t be the only affected country.

European businesses fear it could spell the biggest single threat to the economic upswing that helped the region get past its financial crisis.

The Chinese Government previously warned the US tariffs will not only hurt China and the US, but the rest of the world, because $20 billion ($A27 billion) of the affected $34 billion ($A45 billion) goods are produced by foreign companies.

Economists have also warned that a fully fledged trade war will slow the US economy, and many individual businesses could soon endure hardship as a result.

China is Australia’s largest and most important trading partner, and there are fears China’s stalling growth could affect our economy.

Treasurer Scott Morrison recently told a Perth business forum that the US-China tit-for-tat is “quite serious”.

“We must bear in mind that with the global economy having turned the corner in the last 18 months, we cannot allow it to now inflict some sort of economic self-harm by allowing these sorts of exchanges to run away,” Mr Morrison said.

However, the treasurer added: “There is no reason to think this cannot be kept under reasonable management.”

He said countries like Australia, China, Canada, the UK and the US were now “completely immersed in global trade”, having been much less so two decades ago. The issue needed to be managed with a clear focus on stronger growth, more jobs and taking more people out of poverty, he said.

“If these issues aren’t managed with cool heads … then the world is at great risk of scoring a massive own goal,” Mr Morrison said.

— With wires