China’s economy worse than it seems - even before trade war bites
Analysis of provincial figures indicates growth in many parts of the country may be less robust than the headline figures suggest
A close look at China’s regional economic performance suggests that the economy is in worse shape than its headline figures imply even before the full impact of the trade war with the US has been felt.
Central government figures gave a national inflation-adjusted growth rate of 6.8 per cent for the first half of the year, compared with 6.9 per cent in the same period last year.
However, a review of local economic data by the South China Morning Post has found signs of a broad slowdown in the world’s second biggest economy, with some parts of the country stagnating or even contracting.
It is a challenging situation for Beijing to manage and makes China vulnerable in the face of escalating trade hostilities from US President Donald Trump. China’s official manufacturing purchasing managers’ index fell to a five-month low of 51.2 in July, the National Bureau of Statistics said on Tuesday.
The Chinese government has already unveiled a series of measures designed to stimulate growth and the issue is likely to be high on the agenda at the Politburo’s summer policymaking meeting, although details of the gathering are not released in advance.
“The impact of the trade war [on China’s economy] is definitely negative, and the Chinese leadership at the Politburo meeting may discuss more fiscal spending and introduce more stimulus measures,” Iris Pang, Greater China economist for ING Wholesale Banking, said.