Trade war with US takes its toll on Chinese economy
Growth expected to hit 30-year low as imports and exports both fall
China is increasingly feeling the effects of its trade war with the US as imports and exports fall and growth forecasts are cut back, world media reported.
Reuters reported that China’s trade balance in September stood at $39.65bn (£31.32bn, €35.96bn). Exports fell 3.2 per cent in September from a year ago, the biggest drop since February, according to The South China Morning Post. Imports dropped by 8.5 per cent over the same period, the fifth consecutive monthly fall.
A Reuters poll, reported in Euronews, indicates Chinese economic growth is expected to slow to a near 30-year low of 6.2 per cent this year, dropping to 5.9 per cent next year. This slowdown is largely blamed on the trade war, CNBC reports.
According to analysts at Capital Economics, reported by Reuters: “The headline figures suggest that global demand softened last month, adding to the pressure from the US tariffs that went into effect in September.”
The Chinese government has relied fiscal stimulus and monetary easing to counter the downward spiral, reports the India Times and there is little sign it will change tack soon. “Chinese central bank governor Yi Gang said late in September there was no urgent need to implement large interest rate cuts following Beijing’s reiteration that it would not use “flood-like” stimulus measures,” it said.
Consumer prices rose 0.2 percentage points to a 3 per cent year-on-year rise in September, the highest for nearly six years, Caixin Global reported.
The economic outlook is not helped by rising pig prices, sparked when an outbreak of swine fever hit stock levels, says CNBC. Output has been increased, but prices continue to soar, up nearly 70 per cent after a 46.7 per cent increase in August.The Chinese are the world’s largest producers and consumers of pork.