Trump trade war taking toll on China’s economy?
Rep. Duffy on US-China trade deal prospects: I’m skeptical
Rep. Sean Duffy, (R-Wisc.), on U.S. trade negotiations with China.
China’s economy and stock market are showing signs of softness amid an ongoing trade war with the U.S.
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On Monday, the country’s Bureau of Statistics announced that manufacturing activity shrank in December – for the first time in more than two years. China’s Purchasing Managers’ Index was 49.4 this month, which was the weakest level recorded since February 2016, according to Reuters. It was the result of a drop in new export orders.
Meanwhile, the major Chinese stock index suffered double-digit losses in 2018. The Shanghai Composite fell more than 24 percent for the year, its largest annual decline in a decade.
During the third quarter, China’s GDP growth missed expectations, coming in at 6.5 percent.
The Trump administration has imposed tariffs on about $200 billion worth of Chinese imports. He had threatened to raise the tariff rate to 25 percent, but during the G-20 summit in Buenos Aires earlier this month Trump agreed to hold off on increasing tariffs for at least 90 days while negotiations continue.
Over the weekend, leaders from both countries had positive things to say about the prospects for trade progress following a phone call on Saturday.
Meanwhile, the trade battle has rattled U.S. investors, as well. The U.S. equity market is on track for its worst December performance since the Great Depression in the 1930s and its second down year since 2008. The end of the year, in particular, has been marked by a pickup in volatility.
On the other hand, GDP growth has remained relatively strong throughout 2018, expanding at 3.4 percent in the third quarter. In the second quarter, GDP was 4.2 percent. The downturn was attributed, in part, to a reduction in exports.
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