Darker horizon
China’s growth is the slowest in nearly three decades: get used to it
The trade war with America hurts, but the government is wary of stimulus
CHINA’S ECONOMY is slowing, again. After a good start to the year annual growth slipped to 6.2% in the second quarter, the country’s weakest expansion in nearly three decades. But that is hardly cause for panic. For an economy now worth nearly $14trn, such a growth rate is impressive. As the trade war with America hurts exporters, it also underlines the extent to which China’s economy is now fuelled by domestic demand. The question for the coming months is whether that domestic strength will remain sufficient to offset the trade turmoil.
The export picture has clearly taken a turn for the worse. Last year, when America’s president, Donald Trump, first levied tariffs on China, the country still managed to increase its exports by 10%. This year Chinese exports have all but stopped growing.
Moreover, the fight with America is getting more serious. In May Mr Trump ratcheted up tariffs on Chinese goods, and he has threatened to hit it with yet more duties if trade negotiators fail to resolve an impasse in the talks. The uncertainty is already taking a toll: foreign companies have started to shift more operations away from China.
So far China has looked rather well insulated from all these troubles. Activity actually accelerated towards the end of the second quarter. Investment in factories, roads and other fixed assets increased 6.3% in June compared with a year earlier, up from 4.3% in May. Retail sales also were robust, rising 9.8% in June compared with a year earlier, up from a year-on-year increase of 8.6% in May.
Yet there are doubts about how long this resilience will last. Some of the apparent strength is transient. Car sales, which have been in the doldrums for a couple of years, surged in June to double-digit growth, pushing up retail sales more broadly. But that was largely because dealers had slashed prices to run down inventories before tough new emission standards were imposed in July. The property sector, a bellwether for the economy, also seems set to soften.
The government, anticipating a slower patch, has started to spend more on infrastructure, a tried-and-tested method in China for revving up growth. Having tightened its purse strings for a couple of years, in recent months it has made it easier for municipal officials to raise funds for building railways and highways.
But there are limits as to how far it will go. China’s president, Xi Jinping, has declared that containing financial risks is a matter of national security. The odds of another giant stimulus, routine in the past whenever growth slowed, are much lower this time around. And in any case the government has less money to work with, having already racked up so much debt over the past decade.
It also wants to conserve its limited fiscal firepower in case the trade war turns uglier. In the meantime, get used to headlines about Chinese growth dipping to its lowest in nearly three decades: they are likely to appear again in three months and, again, three months after that.
martes, julio 16, 2019
DARKER HORIZON -- CHINA´S GROWTH IS THE SLOWEST IN NEARLY THREE DECADES: GET USED TO IT / THE ECONOMIST
|
Etiquetas:
China,
Economics,
Trade Wars
Suscribirse a:
Enviar comentarios (Atom)
Bienvenida
Estimados amigos,
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Las convicciones son mas peligrosos enemigos de la verdad que las mentiras.
Friedrich Nietzsche
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
Lao Tse
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
Warren Buffett
No soy alguien que sabe, sino alguien que busca.
FOZ
Only Gold is money. Everything else is debt.
J.P. Morgan
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Proverbio Chino
Quien no lo ha dado todo no ha dado nada.
Helenio Herrera
History repeats itself, first as tragedy, second as farce.
Karl Marx
If you know the other and know yourself, you need not fear the result of a hundred battles.
Sun Tzu
Friedrich Nietzsche
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
Lao Tse
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
Warren Buffett
No soy alguien que sabe, sino alguien que busca.
FOZ
Only Gold is money. Everything else is debt.
J.P. Morgan
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Proverbio Chino
Quien no lo ha dado todo no ha dado nada.
Helenio Herrera
History repeats itself, first as tragedy, second as farce.
Karl Marx
If you know the other and know yourself, you need not fear the result of a hundred battles.
Sun Tzu
We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.
Paulo Coelho
Paulo Coelho

Archivo del blog
-
►
2020
(2008)
- ► septiembre (145)
-
▼
2019
(2103)
- ► septiembre (187)
-
▼
julio
(176)
-
▼
jul 16
(7)
- RAY DALIO - JOHN MAULDIN CONVERSATION, PART 6 / JO...
- PSYCHOLOGY OF WEALTH: DO RICH PEOPLE DESERVE TO BE...
- THE U.S. ECONOMY´S STRANGE DECADE / PROJECT SYNDICATE
- HONG KONG, TAIWAN AND THE HOPE FOR A BETTER CHINA ...
- DARKER HORIZON -- CHINA´S GROWTH IS THE SLOWEST IN...
- AFTER THE FED EUPHORIA, WEAK EARNINGS COULD BRING ...
- GLOBAL ECONOMY GROWTH IS ALREADY SLOWING. THE U.S....
-
▼
jul 16
(7)
-
►
2018
(1928)
- ► septiembre (173)
-
►
2017
(1947)
- ► septiembre (160)
-
►
2016
(2576)
- ► septiembre (182)
0 comentarios:
Publicar un comentario