Tag Archives: China trade war

Tariffs on Chinese goods would seem to be having little impact on some retail prices so far.US core inflation (excluding energy and food prices) remains relatively muted, slowing slightly to 2.1% y-o-y in October, from 2.2% in September. The average over the past year is 2.1%.To some degree, the surprise was that prices did not increase more, especially given fresh tariffs on Chinese imports. In late September the Trump administration imposed a 10% tariff on roughly USD200 billion of Chinese...

Structural changes may lead to the first current account deficit in over two decades this year.Over the first three quarters of this year, China ran a current account deficit of USD12.8 billion. It looks likely that China will see its first full-year current account deficit in over two decades in 2018.We believe that China’s current account position is going through structural change, driven by two trends. The first is the decline in China’s merchandise trade surplus. Indeed, since reaching...

The government is ramping up spending and tax cuts to households to relieve pressure on the economy. Corporates may also benefit from fiscal measures.As the economy continues to decelerate, the Chinese government is ramping up fiscal policy, in order to offset downward pressure. Since June, the government’s fiscal spending has picked up significantly, although it remains fairly modest compared with previous years.In the first five months of the year, China’s fiscal policy was on the tight...

In response to the weakening of growth momentum and the threat of a trade war with the US, the Chinese authorities are likely to continue to make monetary and fiscal adjustments.Recent data releases generally point to a softening in China’s growth momentum. The deceleration is most notable in fixed-asset investment and retail sales, and the rising trade tensions between US and China may have weighed on the export sector.The official manufacturing PMI for June came in at 51.5, down from 51.9...