The toll of tariffs on the world's second-biggest economy is growing more visible
and which its currency, most would have answered this way: growth will remain strong at around 7% annually, and the currency will strengthen until it takes just five yuan and change to buy a dollar. One measure of the impact of Donald Trump’s trade war on China is the inversion of these digits. As American tariffs bite, economic forecasters think that Chinese growth next year will slow to five-point-something percent. The yuan, for its part, has slumped to more than seven per dollar.
Mr Trump has crowed about the success of his tactics. “China has taken a very hard hit,” he said on August 26th at a news conference after thesummit in France. “They want to make a deal very badly.” But a more accurate reading of China’s policy stance is one of surprising calm in the face of the economic slowdown and, by extension, of stiffer resolve in the trade dispute.The toll of tariffs on China’s economy is becoming more visible.
In the past, whenever growth looked set to slow sharply, Chinese companies could count on a stimulus package to revive it. But this time officials have been much more restrained in their response, partly because of concern about adding to China’s hefty debt burden. On August 26th the central bank had a chance to lower funding costs for banks, but it refrained, bucking the global trend towards lower rates.
The Chinese government’s lack of panic about the economic outlook should give Mr Trump pause. “Its leadership now looks committed to a strategy of toughing out trade tensions,” says Andrew Batson of Gavekal, a research firm. It helps that China has procured insurance in letting its exchange rate decline to 7.1 yuan per dollar, the weakest since 2008, offsetting some of the drag from tariffs.
But some think the calm is verging on complacency. Not only has China’s government refrained from stimulus, but it has become more hawkish about the property sector, the engine of its economy. In line with President Xi Jinping’s oft-repeated warning that investors should not speculate on housing, regulators have curtailed lending to developers and sworn off cutting mortgage rates.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
Trade war dims outlook for U.S. business operations in China: surveyU.S. companies doing business in China are still making profits there, but 81% s...
Lire la suite »
China hopes US will create conditions necessary for September trade talksChina’s Commerce Ministry expects a favourable outcome from the next round of face-to-face trade talks with the US scheduled in September, as tensions between the world's two largest economies grow.
Lire la suite »
The US-China Trade Cold War could soon affect the global tech supply chainThe tech industries in China and the US have been inextricably linked. Almost all iPhones are made in China.
Lire la suite »
Wall Street rises after China trade comments, tech boostA rise in technology stocks lifted Wall Street on Thursday, as China sounded hop...
Lire la suite »
Trump says US and China resume trade talks Thursday 'at a different level'President Donald Trump said the U.S. and China are set to have trade talks on Thursday 'at a different level.'
Lire la suite »
Exclusive: India to woo foreign firms like Apple to capitalize on U.S.-China trade warIndia is targeting companies including Apple, Foxconn and Wistron Corp with a ch...
Lire la suite »