China’s economy in 2018 was harsh. Next year will be worse

Hong Kong (CNN Business) 1. Chinese rocky year: Chinese economy enters an unknown area, and this can cause problems for the rest of the world. After decades of sharp expansion, the Chinese economy is slowing. Growth in 2018 is expected to be the weakest since 1990. The year 2019 looks even worse. The world’s second-largest economy is feeling the effects of dark trade prospects and government attempts to curb risky lending after a rapid rise in debt levels. “The driving factors behind China’s slowdown have not had a full impact on the economy yet,” Moody’s analysts wrote in a research note this month. “The combination of the two is unprecedented.” “This creates a high degree of uncertainty and risk.” What is happening in China is important for companies and markets around the world. They are the world’s largest source of goods, where materials are sucked from other countries in order to charge iPhones, laptops, bulldozers and tons of other products. The country’s fast-growing middle class has turned into the world’s largest market for consumer goods such as cars, smart phones and beer, generating billions in profits for companies such as General Motors (GM) and Apple (AAPL). “China has become the biggest growth engine in the world,” said Rajiv Biswas, chief economist for Asia and the Pacific at research firm IHS Markit. Concerns about China’s economic health have already eased through financial markets. The nation’s benchmark stock index fell to a falling market in June and fell 25% since the beginning of the year. Tensions also affected markets in Europe and the United States. What is still uncertain is the severity of the slowdown and the extent to which the Chinese government is going to try to mitigate its impact. The big wild card is how the US-China trade war, which began this year, will begin in 2019. China temporarily cuts tariffs on US car imports after imposing new high tariffs on hundreds of billions of dollars of goods, both sides are now trying Negotiate an agreement by the end of February. If failed, customs duties are set to rise further. Meanwhile, the economic crisis resulting from the trade war is expected to become more pronounced in China in the coming months, which will hurt exports and corporate profits. “Export growth will be under pressure even if further tariff escalation is avoided,” Julian Evans Pritchard, China’s chief economist at research firm Capital Economics, wrote in a note to customers this month. Opinion is divided as to whether the two governments will reach a permanent agreement in the next two months. Their expanding conflict is much more than just trade. It extends China’s position on technology, intellectual property, investment, industrial policy and access to its markets. China will not back down on its technology control plan In addition to imposing tariffs, the US government this year banned two major Chinese technology companies from buying important US parts, stepped up foreign investment controls and sought to hand over a senior executive. At Huawei, the Chinese company is expected to lead the launch of the 5G technology around the world. “The road to an eventual truce between the two superpowers is likely to be long and arduous,” analysts at Vanguard Investment said in a report this month. Along the way, can do a lot of economic damage to each other. “Trade war has the potential to achieve significant growth,” said Gerard Borg, China’s economist at the National Bank of Australia. “But it all depends on how much the two sides want to pay.” China’s exports are expected to suffer in the coming months. The renewed negotiations show China’s need to “reach some kind of agreement with the United States to buy the much-needed breathing space in a tough economic climate,” Diana Choyleva, chief economist at research firm Endo Economics, said in a note to clients this month. . The crucial question for China is how consumers respond to this ambiguity. The country’s extraordinary economic transformation in recent decades has driven hundreds of millions of people out of poverty to an increase in spending spikes. China buys fewer cars. GM and Volkswagen feel pain “It was domestic consumption that drove China’s structural growth story,” said Edmund Goh, portfolio manager at Aberdeen Standard Investments in Shanghai. “I have defied a lot of slowdown” but the cracks began to appear. Car sales have fallen in recent months, to strike a blow to global automakers such as Volkswagen (VLKAF) and Ford (F). Spending on retail has slowed down overall, according to official data. Goh said debt levels among Chinese consumers were rising rapidly, which could increase their spending reluctance. Consumer spending has become an increasingly important part of China’s economy. China is likely to face the difficulties facing the economy through its brand approach: juice activity through government incentives. Has already resorted to tax cuts, investm


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