The Chinese economy is falling in the middle of the trade war

Thursday August 15th, 2019
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Beijing: the Middle East

China's economic performance slowed considerably in July, as industrial production slowed to its lowest level in more than 17 years as the growing trade war between Beijing and Washington weighed on business and consumers.
Activity continued to slow in China, despite a series of growth measures taken over the past year, raising questions about the need for more rapid and aggressive stimulation, even if Beijing risks going into debt more.
After a volatile improvement in June, badysts said the latest data showed aggregate demand had cooled last month, including industrial production, investment and retail sales.
This development came after bank lending surveys and surveys of dark factories less than expected, with the return of producer price deflation, raising expectations for increased political support soon.
Data from the National Bureau of Statistics (SNB) showed that growth in industrial output slowed considerably to 4.8% in July, less than the most pessimistic Reuters poll, the slowest growth since February 2002.
Analysts had anticipated a 5.8% slowdown in industrial production growth compared to June, when the growth rate was 6.3%. Washington strongly increased some rates in May.
The Ministry of Industry said last month that China would need "difficult efforts" to achieve its industrial growth target for 2019 of 5.5 to 6%.
China's economic growth slowed to a 30-year low of 6.2% in the second quarter. Business confidence remained fragile, which weighed on investment.
Capital investment increased 5.7% between January and July on an annual basis, which is below expectations of an increase of 5.8% and a decrease from the previous reading.
However, readings in various sectors revealed a sharper loss of speed in critical areas at the beginning of the third quarter.
Retail sales rose 7.6% in July, well below the median forecast of 8.6% and below the worst-case forecast. Sales jumped 9.8% in June, which many badysts thought was temporary.
The past few months have been marked by the resurgence of a one – year trade war between Washington and Beijing, which has heightened the risks for both economies and fueled fears of a global recession.
China, however, took a breather on Tuesday after US President Donald Trump announced that he would delay tariffs on some Chinese imports, including cell phones and other consumer goods, with the obvious purpose of reducing the tariffs. avoid the impact of customs duties on sales before the holidays. Birth in the United States.
But the new tariffs will apply next month to about half of a $ 300 billion list of Chinese products. Analysts say the odds of a permanent trade deal after recent escalations have narrowed sharply.
The Chinese yuan dropped some of its previous gains on Wednesday as weaker-than-expected economic data undermined optimism stemming from the US's decision to defer tariffs on imports from China.
The enthusiasm has also declined on a larger scale. The yen refuge has increased again, a sign that the risk appetite remains fragile. The yen weakened on Tuesday after the US announcement.
The decline of the yuan and the rise of the yen reflect the opinion of badysts that the postponement of the imposition of duties, even if it is encouraging, is in no way a solution to the trade war between China and the United States.
The yuan hit a one-week high against the dollar on Tuesday after US President Donald Trump postponed the deadline of 1 September to impose 10% tariffs on the remaining imports from from China, by deferring the prices of mobile phones and laptops. And other consumer goods. The announcement took place after the resumption of trade negotiations between China and the United States.
But the yuan fell 0.4% against the dollar to 7.0360, a level equivalent to more than seven yuan to the dollar, which had reached last week's announcement of the imposition 10%. The yen rose 0.4% against the dollar, to 106.33 yen, after hitting a lows week on Tuesday. The other major currencies have changed little.
The dollar index, which has fallen about 1% since the beginning of August, was about 97.8. The euro remained stable at 1.1180 USD, despite weak German GDP data in the second quarter.

China

The Chinese economy