Trade wars will not shake the influence of the Chinese economy on the planet
The influence of the Chinese economy on the world trade over the past 5 years has become colossal. China is the main producer and exporter of goods worldwide, and ranks second in terms of imports, second only to the European Union. 2018 was very difficult for the Middle Kingdom. GDP growth slowed to 6.6%, the worst in the last 29 years. Let us talk more about how the Chinese crisis has affected the economy of the planet.
The negative influence of the Chinese economy has not shaken the markets
There was no serious reaction from the market to the negative news from the Middle Kingdom. Indices show different directions, but there is no tangible speakers. The main reason for stability is that the data published by the Chinese authorities are expected for investors. They were approximately consistent with the forecasts, so the market was ready.
In addition to the bad news were positive. In particular, information on industrial production from China exceeded expectations, due to which RMB quotes have slightly grown. In addition, there was information about improving the standard of living in the Middle Kingdom. In particular, the country’s retail showed an increase of 9%, while the number of online purchases increased by 24%. In addition, residents’ incomes increased by 9%, and the growth of China’s population was 5.3 million people.
Investment in the state’s economy increased by 6%. The slowdown in economic growth is caused primarily by the “trade wars” with the United States. Now, the governments of China and the States have made some progress, but there is still no final solution to the issue. Due to disagreements, the economy of the Middle Kingdom in the fourth quarter showed an increase of only 6.4%, while the number of trading operations in December decreased by 4.4%. Experts expected drop in imports by 5%, but in fact, it was 7.6%. The domestic demand was weakened, investors’ activity deteriorated somewhat. Moreover, the overall instability on the planet will lead to another slowdown in growth. Professionals from the Academy of Social Sciences of China predict a decline in GDP from 6.6% in 2018 to 6.3% in 2019.
It is worth noting that the Chinese economy is gradually slowing down in growth for several years in a row. The authorities of the Middle Kingdom announced a course to improve the quality of the goods produced, slowing down extensive development. Economists expect that such actions will lead to negative dynamics in world markets. Now the government of the state has approved a plan for GDP growth of 6-6.5% annually.
Despite the negative trends in the economy of China, experts do not expect a hard landing. According to professionals, the decrease in GDP growth is currently insufficient to affect significantly the global economic situation. However, a key factor for the well-being of the planet is progress in negotiations between the authorities of China and the United States.
In 2018, the Middle Kingdom planned to accelerate GDP growth at the expense of its own consumer. However, the implementation of this program was due to political and economic instability in 2018, which is why it was not implemented fully. However, China will continue this course; there is no doubt. To date, the situation is not as bad as it may seem. However, a further slowdown in economic growth in the Middle Kingdom may be a global problem.
