China's weak demand brakes economy - Trump -Zölle threaten
China's weak demand brakes economy - Trump -Zölle threaten
In Beijing, the current economic data of China show mixed results for November. While industrial production growth easily increases, retail sales disappointed, which fueled the demands for increased, consumer -oriented stimulation by Beijing. The political decision-makers are also preparing for other US tariffs that threaten Donald Trump during a second term.
challenges for China's economic recovery
The inconsistent data illustrates how challenging it will be for the Chinese leaders to achieve sustainable economic recovery by 2025. This year the trade relationships could deteriorate to China's largest export market, while domestic consumption remains weak.
consequences of US customs policy
The promise of the US presidential election winner Donald Trump, to raise tariffs from over 60 % to Chinese goods, could urge Beijing to accelerate the plans for the realignment of his economy worth $ 19 trillion. This is done after over two decades of considerations, the current growth model, which is focused on investments in fixed assets and exports, to convert into a consumption -controlled model.
industrial production and retail sales in November
The industrial production of China rose by 5.4 % in November compared to the previous year, which is faster than 5.3 % growth in October, as can be seen from the National Bureau of Statistics (NBS) data. This exceeded the expectations of a survey by Reuters about 5.3 % growth. In contrast, retail sales in November grew with only 3 %, which is the weakest increase in three months. The comparison growth in October was still 4.8 %, while analysts forecast an increase of 4.6 %.
economic assessment and outlook
Dan Wang, an independent economist from Shanghai, critically commented on the economic policies of China: "The China's business strategies have a surprisingly consistently supported manufacturers about consumers, despite clear indications of continuing weaknesses." The result could be a strengthening of the production capacities, which could possibly tighten the overcapacity problem and cause Chinese companies to increasingly address international markets.
investments and consumption behavior
The investments in fixed assets also grew more slowly in the period from January to November, by 3.3 % compared to the same period last year, which was below expectations of 3.4 %. In January to October, growth was 3.4 %. Xu Tianchen, senior economist at Economist Intelligence Unit, noted: "The worries about the weak retail sales could be exaggerated, as some of them are due to early start of the‘ double 11’-shopping festival, which has published the sales for October. "
forecasts and political measures
In the past few weeks, political decision -makers have started to specify their plans for 2025, knowing that Trump's return to the White House will put considerable pressure on the already battered economy. Representatives of the Chinese central bank have indicated that they see scope for further reductions in the minimum reserves of the banks. However, the current loan items show that the previous loosening has contributed little to increase borrowing.stabilization of the real estate sector
A central point for Beijing's efforts to keep the growth target of around 5 % for next year will be the stabilization of the real estate sector. The latter made up 25 % of the economy. Moody’s Ratings recently increased the forecast for China's GDP growth to 4.2 % in 2025, while a survey by Reuters predicts a growth rate of 4.5 % for next year.
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