Trump’s Tariffs weakening China’s Economy
The U.S. should “take note of the calling from businesses and consumers in both countries, the fact that both countries are linked closely in the supply chain and the fundamental interest of the two peoples to make the right decision,” stated Go Feng from the Ministry of Commerce.
Gao went on to state that t U.S. “bullying” won’t work, and that the nation is confident of stable and sound trade this year. Sounds like he is panicking to us.
Why repeat the obvious if you are confident. An empty can makes a lot of noise. 0.3 percentage point could be shaved of China’s growth next year.
“All this puts China in a very difficult position. Not only because much of the tariff and non-tariff measures are directed towards it, but the timing couldn’t have been worse,” the note said.
“After years of hand-wringing and navel-gazing, China finally began to focus in earnest on curbing credit growth — its Achilles’s heel — from around mid-2017.”
China’s banks extended a record 12.65 trillion yuan ($1.88 trillion) in loans in 2016 as the government encouraged credit-fueled stimulus to meet its economic growth target. The credit explosion stoked worries about financial risks from a rapid build-up in debt, which authorities in 2017 pledged to contain. Full Story
A trade war with the U.S. can hurt growth in China
Ballpark estimates from economists show that every $100 billion of imports affected by tariffs chip away around 0.5 per cent of global trade, wiping off 0.1 percentage points of GDP growth. The direct impact on China’s economic growth in 2018 is estimated at 0.1-0.3 percentage points while the drag on its export growth is expected to be 1 percentage point. The effect on the United States will be less. Full Story
China’s Economy Is Slowing Due To US Tariffs
Data released since Friday has affirmed what’s been expected for some time: That an ongoing campaign to curtail credit is putting the brakes on the world’s second-largest economy. Given that China generates as much as a third of global growth, that’s adding to signs that the best world expansion in years is plateauing.
The International Monetary Fund, which has repeatedly warned that the trade spat between the U.S. and China will reverberate globally, is scheduled to release fresh growth forecasts later Monday. The Chinese economy grew at an expected 6.7% in the second quarter, its slowest pace since 2016, while key readings on investment growth and industrial output slowed in June. Retail sales held up. Full Story
“If the US and China do not resume talks in the next two months or so, the conflict will escalate further, with major economic implications for themselves and the global economy,” Stated Louis Kuijs, head of Asia Economics at Oxford Economics in Hong Kong
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