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With the phase one trade deal, China’s economic fortunes look more rosy for 2020. The same can’t be said about Japan’s
- China’s economy is showing signs of recovery. But Japan faces serious problems, even with an Olympic boost to the economy. For one thing, the trade deal may well hurt Japan’s manufacturers
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Ahead of Japanese Prime Minister Shinzo Abe’s visit to China last week, Beijing lifted an 18-year ban on Japanese beef. From Abe’s perspective, that was a welcome gesture. But Beijing’s decision is hardly going to move the dial on a Japanese economy that is again in a rough patch.
In contrast, China’s economic performance shows signs of picking up. Data released on Friday by China’s National Bureau of Statistics revealed a significant improvement in profitability at industrial enterprises in November, with combined profits increasing 5.4 per cent, year on year.
That was quite a turnaround from the annualised fall of 9.9 per cent in October; more remarkably, the November improvement predated the December news of the phase one trade deal with the United States.
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That rebound in profitability came hot on the heels of better Chinese industrial production and retail sales data in November, supporting the notion of a broader-based economic recovery.
Meanwhile, given that the trade war has had a negative impact on Chinese economic activity, the signing of the phase one deal should provide a tailwind for China’s economy in 2020. Chinese manufacturers might well be feeling more optimistic.
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