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Home / World / China exports: 21% plunge in exports shows weakening global economy

China exports: 21% plunge in exports shows weakening global economy



Chinese exports plunged 21% in February from a year earlier, according to Chinese government data released Friday. It has been the weakest monthly performance since February 2016 and far worse than economists had predicted.

US $ 250 trillion of Chinese products are taking a toll.

"US tariffs have become more meaningful drag on exports," Julian Evans-Pritchard, a China economist at research firm Capital Economics, said in a note to clients.

But the trade was which China and the United States are trying to resolve through negotiations, is only part of the problem. The slump in Chinese exports provides "further evidence that global demand is cooling," according to Evans-Pritchard.

If the two governments "finalize a trade deal soon, the outlook for exports remains gloomy," he said.

February's fall in exports followed an unexpected rebound in January, which analysts rushed through orders ahead of The Lunar New Year holiday in early February.
 Chinese exports plunged 21[ads1]% in February from a year earlier, according to Chinese government data.

Global slowdown

The tough situation is likely to continue in the coming months as demand softens in major markets such as Europe.

The International Monetary Fund expects global economic growth to decline this year. And the European Central Bank on Thursday announced a warning that it was "getting rid of the economic slowdown."

 ECB pushes back rates hikes as Mario Draghi warns of slowing economy
Shanghai stock market bench index Shanghai composite (19659015) SHCOMP ) 4.4% on Friday. ECB comments.
Chinese exports are thus expecting to become out of China to avoid the US tariffs.

"The ongoing trade tensions between the United States and China have already prompted some corporates to hedge against search risk," Raymond Yeung, an economist at investment bank ANZ, wrote in a client note.

That's despite a recent easing in trade tensions. US President Donald Trump Xi Jinping for a "signing summit."
But the US Ambassador to China on Friday downplayed the likelihood of an imminent deal. Trump and Xi, Trump and Xi, Terry Branstad, The Wall Street Journal.

"Both sides agree that there has been a great deal of progress that happens, "he said. "We're not there yet." But we're closer than we've been for a very long time. "

Chinese economy under pressure

The grim export numbers are down on China's economy.

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The Chinese government this week predicted economic growth of between 6% and 6.5% in 2019. That's below last year's 6.6% rate of expansion, which was already China's slowest annual growth in three decades.

In recent months, Beijing has ramped up its efforts to stabilize the economy. 2 trillion yuan ($ 298 billion) a year.

The growing wave of stimulus measures and any trade deal with the United States should help Chinese economic Louis Kuijs, Head of Asia Economics at Oxford Economics Research.


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