How US tariffs are expected to weigh on China’s growth rate
Survey of economists predicts sharper slowdown if trade war continues
The tariffs that the US and China are threatening each other with will cause China’s economy to slow more sharply next year if they are enacted, underscoring the high stakes nature of negotiations set to resume this week.
The ongoing trade conflict will reduce China’s economic growth by 0.2 percentage points this year and 0.3 percentage points in 2019, according to the median estimate of 16 analysts in a Bloomberg survey this month.
The estimates depend on the US following through on its threat to impose additional tariffs on US$200 billion of Chinese goods and China retaliating with levies on US$60 billion of imports from America.
China’s US$12 trillion-plus economy will expand by 6.3 per cent next year, compared with the 6.6 per cent expected this year, according to a separate poll of economists, not all of whom have taken the proposed tariffs into account.
While that is still much faster than other major economies, slower growth will imperil the nation’s aim of doubling the size of the economy in the 10 years to 2020.
“Trade war damage is not only through exports, it would also disrupt global supply chains,” said Iris Pang, Greater China economist at ING Bank NV in Hong Kong, adding that Chinese factories would be reluctant to invest and expand further amid the uncertainties.
