Warrington Shaw - China Trade Could Face Recession in 2019

Warrington Shaw - Weak December import and export data points to possible trade recession for world's second-largest economy.

In spite of intensifying state measures to boost the economy, China reported weaker than anticipated export growth towards the end of last year and the data has prompted concern for the global economy’s outlook, say analysts at Warrington Shaw.

Chinese exports declined by the most in more than two years in December while imports also fell, indicating further deterioration in the country’s economy as global demand cools.

In addition, recent official data revealed that China posted an all-time high trade surplus with the United States last year. The trade surplus increased by 17.2 percent in spite of U.S. President Donald Trump’s efforts to reduce the gap by imposing harsh trade tariffs on goods exported from China during the course of last year. Analysts at Warrington Shaw believe the higher trade deficit between the world’s two largest economies could cause U.S. President Donald Trump to up the ante in the U.S. Sino trade dispute.

Although China’s export data had only been minimally affected by the tariffs for the majority of 2018, with exports to the United States still increasing by 11.3 percent and imports rising by 0.7 percent, December’s disappointing export and import data show that the tariffs are beginning to have a detrimental effect and analysts fear China could be facing a trade recession.

The U.S. and China recently agreed to a 90-day trade war truce in an effort to resolve the tensions between the two nations. But analysts at Warrington Shaw say that even if the two countries can reach an agreement on trade differences, global economic growth will likely suffer in 2019.

Source: Warrington Shaw