Buffeted by the ongoing trade war between Beijing and Washington, the world’s second-largest economy has drawn negative commentary from sectors ranging from consumer technology to autos.
The health of the Chinese economy is becoming a big worry for some international firms.
Buffeted by the ongoing trade war between Beijing and Washington — not to mention an already-anticipated slowdown in domestic growth engines — the world’s second-largest economy has drawn negative commentary out of sectors ranging from consumer technology to autos.
On Wednesday, Apple CEO Tim Cook cut his company’s revenue forecast, laying some of the blame on falling sales in China and the trade war that has levied high tariffs over the last several months across hundreds of different products and commodities sold between the world’s two largest economies.
Stocks in Asia traded mostly lower on Thursday and U. S. futures pointed to another volatile session for Wall Street following Cook’s comments.
As the trade war tariffs continue to take their toll — despite an agreement between President Donald Trump and his Chinese counterpart, President Xi Jinping, not to apply any new levies during a 90-day negotiation period — there are plenty of signs that China’s growth is slowing. The Chinese Academy of Social Sciences, a government-led think tank, recently cut its growth estimate for China’s economy from 6.5 percent this year to 6.3 percent. While that seems like a small difference, it signifies a big drop in consumer spending when spread out over the country’s 1.4 billion people.
“We did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook said in a letter to shareholders Wednesday.
Although Apple has faced significant pressures in China since before the trade war kicked off, Cook told CNBC, “It’s clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy.”
Intel Chief Financial Officer and interim Chief Executive Officer Bob Swan said on an earnings call in October that “China is a big market for us,” adding that the company was working with customers and suppliers to adapt to any new tariffs. “It’s going to be a wait-and-see as we go into 2019,” he said.
HP CEO Dion Weisler told investors in November that China was a “very strategically important market for us.
