Gerard Burg, Senior Economist at NAB, suggests that we are yet to see any clear signs – at least outside of survey measures – of any significant impact from US trade measures on Chinese economy.
Key Quotes
“This may change as the range of goods covered under tariffs (likely) expands in coming months.”
“In the meantime, Chinese authorities appear to be fighting the trade war on many fronts – including increasing tax rebates for exporters, loosening restrictions on infrastructure investment and easing monetary policy.”
“In addition, the currency has also depreciated significantly – down around 7% since the start of June – increasing the competitiveness of Chinese exporters. Our forecasts for China’s economic growth are unchanged – at 6.6% in 2018, 6.25% in 2019 and 6.0% in 2020.”
“China’s industrial production increased by 6.1% yoy in August – marginally above the 6.0% recorded in July.”
“There was a modest increase in real fixed asset investment in August – up by 0.7% yoy, compared with a decrease of 0.9% yoy in July.”
“China’s trade surplus was virtually unchanged in August – totalling US$27.9 billion. So far we are yet to see any impact from US trade measures (or retaliatory Chinese tariffs) on the US-China trade relationship.”
“Exports to the United States increased by 13.2% yoy in August – a larger than average increase – to an all time high of US$44.4 billion.”
“Real retail sales growth slowed further in August, to 6.4% yoy – the slowest rate of growth since May 2003. Despite the softening trend in sales, consumer confidence has remained robust – moving up in July to 119.7 points (compared with 118.2 points in June).”
“The pace of China’s deleveraging program appeared to slow in August – with aggregate financing declining by just 2.4% yoy in the month.”
“Chinese monetary policy has eased in recent months – possibly to provide additional support to the domestic economy. While the 7 day Shanghai Interbank Offered Rate (Shibor) has trended higher since mid-August, it is around 20 basis points below the rates in June – at around 2.65% in early September.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0700 ahead of US data
EUR/USD stays in a consolidation phase slightly below 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold manages to hold above $2,300
Gold struggles to stage a rebound following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% ahead of US data, not allowing XAU/USD to gain traction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.