China's economy is collapsing and is not as strong as it was 20 years ago, White House economic adviser Larry Kudlow said on Tuesday. At a time when President Donald Trump saw the economy of his country in a strong position.

In statements to CNBC, Kudlow said he believed the United States had the upper hand in trade negotiations with China, thanks to the relative strength of the US economy.

"I think China is doing a lot more harm than we are," he said, adding that Donald Trump wants to reach a trade deal with China provided it is "appropriate" for the United States.

"The president is protecting the US economy" from "a lot of unfair trade practices," he said.

US President Donald Trump said on Tuesday that his country's economy was in a very strong position, following his escalation of management of tensions by classifying Beijing as a currency manipulator.

Trump sought to allay US farmers' concerns after China closed its doors to US agricultural imports and raised the prospect of additional tariffs on US agricultural products.

He said he would continue to support US farmers who had already received an offer of $ 16 billion from his administration to deal with losses suffered by the trade war.

"Huge amounts of money from China and other parts of the world are pouring into the United States thanks to safety, investment and interest rates. We are in a very strong position. Companies are also coming to the US in large numbers;

US economic growth slowed to 2.1 percent in the second quarter of 2019, from 3.1 percent in the previous quarter, according to official data.

China's economic growth slowed in the second quarter of 2019, reaching a 27-year low, driven by trade tensions with the United States and fears of a global economic slowdown.

Trump: huge amounts of money from China and other parts of the world flowing to the United States (Reuters)

Exodus of billions
The International Finance Institute (IIF) estimated that the escalating trade war between the US and China led to the displacement of about $ 3 billion in emerging market equities and bonds this week.

The institute, which monitors financial market flows, said rising tensions had prompted institutional investors to withdraw a total of $ 6.8 billion from developing markets since last Thursday, including more than $ 2 billion in Chinese shares.

The trade war between the United States and China escalated after President Trump announced last week plans to impose 10 percent additional tariffs on Chinese imports worth 300 billion dollars.

Trump's plan has provoked a backlash from Beijing, which has demanded state companies stop buying US farm produce.

The US government decided on Monday to regard China as a currency manipulator. The central bank said on Tuesday that the rating was a "protectionist unilateralism", followed by another Chinese warning that Washington was destroying the world order.