China Ravaged By Trade War And Tariffs Despite Strong Denial
The trade war has been going on for more than a year. The two countries involved are the United States and China. Both countries have lost much from trade tariffs.
However, the evidence is starting to appear in China, as the economy is ravaged by the trade tariffs, though it is fervently denied by President Xi Jinping.
This is the worst slowdown in 17-1/2 years, say reports. Industrial production has shown very poor growth result for the month of August.
Premier Li Keqiang, however, states that China has set a goal to achieve a target of 6 to 6.5 percent growth rates.
The trade tariffs were first imposed on China by President Trump last year. The tariffs had a negative impact on the Chinese economy. Though it reduced the import of American goods into China, it brought a slowdown in the economy. Meanwhile, foreign companies have chosen to move away from China.
China brought in various financial stimulus measures. Huge tax cuts were made by the PBOC to inject liquidity into the economy and getting credit was made easier.
The Brookings Institute has released a statement stating that the GDP growth has been inflated by China, by increasing its growth almost by 2 percent from 2008 to 2016. Researchers claim that China has stated that the actual size of the economy was at $10.9 trillion, while it was actually at $13.4 trillion, which is almost 18 percent lower for the year 2018.
A White House adviser has stated that the U.S. will be stepping its pressure on China if it does not come to an agreement soon.
China Finance 40 Forum has mentioned in its annual report that the financial system in China has high government intervention, especially by banks. In such a scenario, financial resources are distorted. Large companies are favored, while smaller firms do not get much support, states the report.