By: Azhar Azam
*This is one of my opinion pieces (unedited) that first appeared at "China Global Television Network (CGTN)":
https://news.cgtn.com/news/2019-10-15/Is-Chinese-international-trade-plummeting--KOJIFzAL0k/index.html
Going through “psychoanalysis” of the foreign economists about the Chinese economy, it appears as if China’s exports and imports were horribly cowed amidst the growing China-US trade tensions albeit the latest lull between the two sides after US President Donald Trump outlined the first phase of the trade deal and suspended the looming tariff hike on Chinese goods.
No doubt, China’s exports and imports have witnessed a decline in US dollar terms by 3.2% and 8.5% respectively for September from a year earlier; however the fall especially of exports in yuan terms were far lower at 0.7%. Noticeably for the nine-month period of 2019, export figures in US dollar were roughly flat at -0.1% while they actually picked up the pace in yuan terms by 5.2%.
In addition beating all the analysts’ forecasts, China trade surplus was inflated by 1.8% or $4.82 billion to $39.65 billion in September as compared to August, taking the year’s trade glut to $298.43 billion. It was 34.8% or $77.05 billion more than January-September 2018 trade surplus. Chinese economy, therefore, still was resilient enough to absorb the trade war shocks.
While the assessment by the USB economists expected “potentially significant job losses” in China’ market from December this year until March 2020, the impact is unlikely to hit the Chinese manufacturers as total trade and export of the second-largest economy in yuan terms rose considerably for January to September period.
In a news conference on Monday, Chinese customs spokesperson Li Kuiwen confirmed that China’s stable domestic economy had provided a strong cushion against external challenges however warned that the trade development in future is still “complicated and severe.”
Moreover, though China’s exports to the United States plunged by double digits (10.7%) in US dollars for January-September but its imports from its largest exports destination also fell by more than a quarter (26.4%). So the retaliatory tariffs on billions of dollars of each other’s goods, if harmed, should have battered both Chinese and American manufacturers and farmers and disrupted the global supply chains simultaneously.
China is a great contributor to the US economy. For the January-August period of 2016, China became the largest goods trading partner of the US surpassing Canada. But for the same period of 2019 when China was pushed down to become third-largest US trading partner, American economy failed to report a trade growth.
Instead the US economy suffered a significant blow as its eight-month total trade and exports withered for the first time since 2016. Thus, the strong China-US trade ties are a guarantee to more burgeoning American economy.
US trade data authenticates that China was not the only country that endured a decline in the US dollar-angled trade. Likewise, the impact was not circumscribed to Beijing and Washington alone as in its updated projection on October 1, the World Trade Organization (WTO) slashed its global merchandize trade growth forecast by more than a half, to just 1.2% from its prior April’s prediction of 2.6% over escalating trade war and weakening global growth. The updated trade forecast was based on consensus estimates of world GDP growth of 2.3% for both 2019 and 2020, down from 2.6% previously.
Since Bloomberg’s global GDP tracker anticipated that the pace of expansion has relaxed to 2.2% in the third quarter of 2019, down from 4.7% at the start of 2018 and IMF is also likely to cut its global growth forecast on Tuesday from 3.2%, seeing a “serious risk” and “synchronized slowdown” – attributing the downfall to the Chinese economy and trade only vitally lacks the wisdom and weight. If occurred, the worldwide economic go-slow will affect all the countries of the world without fail.
As Financial Times and Brookings Institution’s co-produced Tracking Indexes for the Global Economic Recovery (TIGER) underscores that Chinese economy hasn’t suffered as much as the trade war was likely to, China has shown greater pliability to withstand the shudders by posting impressive growth in yuan-based trade.
Report added that the global economy is giving way to a “synchronized stagnation” and could slide into first recession since 2009, which again would not limited to China. It further said that the U.S. economy is presenting a “dichotomous picture.”
TIGER underscored that the activities of manufacturing and services sectors in the US were visibly going down over US trade tensions with China and the European Union (EU) and uncertainties about trade deal with Canada and Mexico. The US tussles worldwide altogether had “sapped business confidence, hurt corporate profits, and led to a contraction of business investment” on its land itself.
Accordingly, the diverse forecasts about the global trade and economy are not a threat to China only but to the entire world including the US and EU. These are the consequences of the needless trade frictions, China has been warning since long to avoid a potential global economic meltdown.
If the trade war continues, neither China nor the US will be the beneficiary of the arising outcomes. As the economies of the two countries are largely interdependent, any upswing in the trade relations will challenge the economic interests of both Beijing and Washington and the global growth, which is threatening to accelerate the slowdown and sliding into yet another recession.
*This is one of my opinion pieces (unedited) that first appeared at "China Global Television Network (CGTN)":
https://news.cgtn.com/news/2019-10-15/Is-Chinese-international-trade-plummeting--KOJIFzAL0k/index.html
Going through “psychoanalysis” of the foreign economists about the Chinese economy, it appears as if China’s exports and imports were horribly cowed amidst the growing China-US trade tensions albeit the latest lull between the two sides after US President Donald Trump outlined the first phase of the trade deal and suspended the looming tariff hike on Chinese goods.
No doubt, China’s exports and imports have witnessed a decline in US dollar terms by 3.2% and 8.5% respectively for September from a year earlier; however the fall especially of exports in yuan terms were far lower at 0.7%. Noticeably for the nine-month period of 2019, export figures in US dollar were roughly flat at -0.1% while they actually picked up the pace in yuan terms by 5.2%.
In addition beating all the analysts’ forecasts, China trade surplus was inflated by 1.8% or $4.82 billion to $39.65 billion in September as compared to August, taking the year’s trade glut to $298.43 billion. It was 34.8% or $77.05 billion more than January-September 2018 trade surplus. Chinese economy, therefore, still was resilient enough to absorb the trade war shocks.
While the assessment by the USB economists expected “potentially significant job losses” in China’ market from December this year until March 2020, the impact is unlikely to hit the Chinese manufacturers as total trade and export of the second-largest economy in yuan terms rose considerably for January to September period.
In a news conference on Monday, Chinese customs spokesperson Li Kuiwen confirmed that China’s stable domestic economy had provided a strong cushion against external challenges however warned that the trade development in future is still “complicated and severe.”
Moreover, though China’s exports to the United States plunged by double digits (10.7%) in US dollars for January-September but its imports from its largest exports destination also fell by more than a quarter (26.4%). So the retaliatory tariffs on billions of dollars of each other’s goods, if harmed, should have battered both Chinese and American manufacturers and farmers and disrupted the global supply chains simultaneously.
China is a great contributor to the US economy. For the January-August period of 2016, China became the largest goods trading partner of the US surpassing Canada. But for the same period of 2019 when China was pushed down to become third-largest US trading partner, American economy failed to report a trade growth.
Instead the US economy suffered a significant blow as its eight-month total trade and exports withered for the first time since 2016. Thus, the strong China-US trade ties are a guarantee to more burgeoning American economy.
US trade data authenticates that China was not the only country that endured a decline in the US dollar-angled trade. Likewise, the impact was not circumscribed to Beijing and Washington alone as in its updated projection on October 1, the World Trade Organization (WTO) slashed its global merchandize trade growth forecast by more than a half, to just 1.2% from its prior April’s prediction of 2.6% over escalating trade war and weakening global growth. The updated trade forecast was based on consensus estimates of world GDP growth of 2.3% for both 2019 and 2020, down from 2.6% previously.
Since Bloomberg’s global GDP tracker anticipated that the pace of expansion has relaxed to 2.2% in the third quarter of 2019, down from 4.7% at the start of 2018 and IMF is also likely to cut its global growth forecast on Tuesday from 3.2%, seeing a “serious risk” and “synchronized slowdown” – attributing the downfall to the Chinese economy and trade only vitally lacks the wisdom and weight. If occurred, the worldwide economic go-slow will affect all the countries of the world without fail.
As Financial Times and Brookings Institution’s co-produced Tracking Indexes for the Global Economic Recovery (TIGER) underscores that Chinese economy hasn’t suffered as much as the trade war was likely to, China has shown greater pliability to withstand the shudders by posting impressive growth in yuan-based trade.
Report added that the global economy is giving way to a “synchronized stagnation” and could slide into first recession since 2009, which again would not limited to China. It further said that the U.S. economy is presenting a “dichotomous picture.”
TIGER underscored that the activities of manufacturing and services sectors in the US were visibly going down over US trade tensions with China and the European Union (EU) and uncertainties about trade deal with Canada and Mexico. The US tussles worldwide altogether had “sapped business confidence, hurt corporate profits, and led to a contraction of business investment” on its land itself.
Accordingly, the diverse forecasts about the global trade and economy are not a threat to China only but to the entire world including the US and EU. These are the consequences of the needless trade frictions, China has been warning since long to avoid a potential global economic meltdown.
If the trade war continues, neither China nor the US will be the beneficiary of the arising outcomes. As the economies of the two countries are largely interdependent, any upswing in the trade relations will challenge the economic interests of both Beijing and Washington and the global growth, which is threatening to accelerate the slowdown and sliding into yet another recession.