As trade war looms, the US looks confident. China, not so much
Workers transfer soybeans at a port in Nantong in China's eastern Jiangsu province. Photo: AFP
Rolls of steel at a shipyard in Nantong in China's eastern Jiangsu province. Photo: AFP
China's easing, on the other hand, highlights Beijing's concern that economic growth is losing momentum and market fears regarding the trade row with Washington. While China's economy may still achieve an enviable 6.5 per cent growth this year, warning lights are flashing in some areas. For decades, China's phenomenal growth has been fuelled by three major drivers: capital investment, exports and private consumption.
But activity indicators in May suggested that investment, exports and retail sales had all unexpectedly slowed. Fixed asset investment growth slowed to 3.9 per cent year-on-year, the lowest in 18 months, with infrastructure investment declining 1.1 per cent. Export growth slowed to only 3.7 per cent in April and 3.2 per cent in May " and growth could be further limited by the trade dispute. Meanwhile, retail sales rose 8.5 per cent in May from a year earlier, the slowest pace since June 2003.
US Commerce Secretary Wilbur Ross with Chinese Vice-Premier Liu He in Beijing. Photo: AP
This article originally appeared on the South China Morning Post (SCMP).
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