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China's export orders declined in September as a result of escalating a tariff battle against Washington over technology, which heightened pressure on the company. Economy No. 2 in the world, revealed Sunday two surveys.
The reports add to the signs that Chinese trade, which had resisted despite tariff increases by US President Donald Trump, could weaken. This adds to the pressure on an already cool economy due to slowing global consumer demand and credit controls imposed to curb the debt boom.
The official monthly measurement of new export orders by the China Federation of Logistics and Purchasing in China increased from 49.4 in August to 48 on a 100-point scale, on which figures below 50 indicate a contraction of activity.
A separate magazine, published by a business magazine, Caixin, has shown that new export orders have fallen at the fastest pace in more than two years. The magazine said the companies accused "trade frictions" and tariffs.
Overall, the Federation's Monthly Purchasing Managers' Index showed that manufacturing activity decelerated from 51.3 in August to 50.8. Caixin said its index fell from 50.6 to 50.
"The downward pressure on the Chinese economy was important," economist Zhengsheng Zhong said in the Caixin report.
The resilience of the Chinese economy, which amounts to 12 trillion dollars per year up to now, has allowed the government of President Xi Jinping to reject any pressure for initiatives such as "Made in China 2025", calling for the creation by the state of champions of robotics and other technologies.
Washington, Europe and other trading partners claim that these violate Beijing's obligations in terms of market opening.
The International Monetary Fund and other forecasters expect economic growth this year to fall to about 6.5 percent from 6.8 percent in 2017. But this slowdown is mainly due to long-term by the ruling Communist Party to bring China to self-sustaining growth based on consumer spending rather than trade and investment.
Last week, Trump stepped up its pressure by increasing tariffs on $ 200 billion worth of Chinese goods. Beijing has fought back with fines of 60 billion US dollars. Both parties had already increased tariffs by $ 50 billion on their respective goods.
Both parties have not announced any plans for negotiations. China has accused Trump in a report last week to intimidate other countries. A deputy trade minister said the negotiations were impossible, while Washington "holds a knife" of tariff increases at the Beijing Gorge.
In the absence of a regulation in sight, forecasters estimate that the conflict could dampen global economic growth by 0.5% by 2020.
Sunday's reports gave no details on September orders from the United States, China's largest domestic export market.
Sales in the United States have held up to now, registering an increase of more than 13% in August. But analysts said the strength may be due in part to the fact that Chinese suppliers have been quick to beat the increase in import taxes.
US authorities complain about the Beijing flights or the pressure on companies to hand over the technology. They fear that Chinese technology initiatives will erode US industrial leadership.
Communist leaders have tried to stick to long-term reform plans that, according to the ruling party, will make the state-dominated economy more competitive and productive.
Beijing has cut import tariffs and announced plans to open the auto manufacturing and other industries to foreign competitors. But none of their changes deal with complaints about American technology.
Last week, Beijing announced tariff cuts, starting November 1, on 1,585 types of goods, including construction equipment.
Chinese leaders must act quickly to "develop domestic demand and resolve downward pressure in the short term," said economist Zhang Liqun in the report of the Federation of Logistics.
The importance of trade for China has declined, but it still supports millions of well paying jobs. The United States is the destination of China's most profitable exports, including smartphones, industrial machinery and medical technology.
The employment index of the logistics federation dropped 1.1 points to 48.3, indicating a contraction in the workforce.
"The employment situation is even worse," said Zhong in the Caixin report.
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