The current US tariff rate will drag China’s GDP growth in approximately 1.8 percentage points. Any additional increase in tariffs will probably have little impact on China’s growth. Another fiscal support of 1.5-2.0 billion CNY is needed, backed by moderately lax monetary policy, Standard Chartered economists report.
The perfect storm
“During the past week, the US and China have announced drastic tariff A decreasing impact on China’s growth. “
“We estimate that the current tariff rate will reduce the growth of China’s GDP by approximately 1.8 percentage points. Although there are additional risks for our estimation due to a possible global recession and repercussions on employment, consumption and domestic investment, we also see mitigating factors. The 90 -day delay of US USA In addition, a moderate depreciation of the CNY could act as a shock absorber.
“China and the US seem to be trapped in a high-risk game, with the short-term perspective that any of the parties withdraw before the economic pain that looks gloomy is inflicted. We see the downward risks for the growth of China, but we believe that the government will implement more stimuli to prevent growth from staying significantly below its 5%growth target. In our opinion, another fiscal stimulus of 1.5-2. of CNY (1.0-1.5% of GDP).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
