China’s economy in the third quarter grew at its slowest pace in a decade. But even after the US and China placed hundreds of billions of dollars’ worth o…
AP Photo/Andy Wong
As the Chinese economy slows, economists say trade tensions are only part of the equation.
Gross domestic product in China expanded at its weakest pace in nearly a decade from July through September, with growth in the manufacturing sector slowing to a near standstill. The Shanghai Composite is down about 25% this year.
But even in the face of hundreds of billions of dollars’ worth of tariffs between Washington and Beijing, exports have continued to hold up better than expected. China shipped 11% more products out of the country in October than it did a year earlier, according to a Reuters poll, slower than the previous month’s 14.5% export growth but faster than August’s 9.8% rise.
The US was the destination for about 18% of Chinese shipments in 2017. Brad Setser, a senior fellow on the Council of Foreign Relations who previously served as an economist at the Treasury Department, said it would be difficult but possible to offset that loss.
“You would sort of expect that supply chains would reorganize,” Setser said. “But that’s going to take some time.”
To be sure, exports may have received a boost from a weaker yuan and companies rushing orders ahead of expected price increases. But economists say it also shows the slowdown this year is largely thanks to a state-led deleveraging campaign that was started last year in attempt to deal with excess debt.
