China does not notice the impact of the taxes imposed by the Donald Trump administration, but the commercial war occurs at a delicate moment for the second world economy. The country grew between July and September by 6.5% year-on-year, a rate at minimums that were not seen since the first quarter of 2009, when the country suffered the impact of the international financial crisis. Then he chose to launch a huge stimulus plan that allowed him to get around the hole, but whose consequences in the form of debt are now one of the biggest headaches in Beijing.
The data provided by the National Bureau of Statistics on Friday indicate that China's growth, despite the internal swings and the crossing of tariffs with Trump, has hardly suffered. This 6.5% is only two tenths less than the rate of the second quarter, but two tenths are relevant in a country that has been officially growing for three years in an interval between 6.7% and 6.9%. The Chinese economy, according to official statistics, has been a raft of oil for years even though during this period the bubble of raw materials deflated, there were stock market crises and several areas of the north of the country that lived from heavy industry brushed the recession For the first time in decades.
The give and take between China and the United States has not had any negative effect on the macroeconomic picture of the second world power; Rather the complete opposite. According to customs data, exports from the Asian country rose by 14.5% year-on-year in September, the same month that the second large tariff round came into effect. And the trade surplus with the United States, the great nightmare of Donald Trump, hit a record high of 34.13 billion dollars. The analysts assure that this sudden increase is due to the advance of orders of many companies to avoid the rates, with what the real effects in the powerful export sector should be noticed in greater measure this last quarter of the year and in 2019.
But the commercial war is a machine to generate uncertainty. The stock markets have suffered a lot (Shanghai lost 23.5% so far this year, Shenzhen 35%) and the business confidence indexes reach a minimum. Investment in fixed assets has slowed so far this year to 5.4%, a fall mainly caused by the intense Beijing campaign to control the growth of debt and lto activity of the banking sector in the shade. Both phenomena, described by the authorities as systemic risks, grew exponentially as a result of the consecutive stimulus plans – larger and more evident than others – that the authorities have launched since the Great Recession.
"Shadow banking, which was one of the main sources of financing for small and medium-sized companies, has been literally crushed. This has had a huge impact on these companies, which previously believed that the cost of financing was high, now they are simply running out of funds. Under these conditions it is normal that it is not reversed, and precisely this weakening of the private sector is a cause for concern that will not be reversed soon, "explains Li Wei, professor of economics at the Cheung Kong business school. The indicator that he himself elaborates on business confidence, focused on SMEs, is currently at the lowest level of the seven-year history of the index.
Retail sales, consumption thermometer, grew in September at a year-on-year rate of 9.2%, while industrial production increased by 5.8%. All these downward indicators have led Beijing to rethink its strategy in recent months, smoothing the fight against debt and opening the tap to new, albeit small, forms of stimulus, both fiscally and monetarily. To the reduction of taxes to the companies this year four cuts of the coefficient of cash of the banks are added to him, that is to say, the financial organizations have been allowed to reduce the level of their reserves to, in theory, use them to foment the credit to the consumption and companies. The governor of the Central Bank, Yi Gang, has announced that the agency still has a lot of ammunition in case the situation worsens.
Analysts agree that the current measures are not enough to revitalize economic activity. "The government must carry out a more significant tax reduction and ensure that the mechanism of monetary transmission works, that is, that the credit reaches SMEs," says Li. Most likely, new stimuli will arrive in the coming months, with enough time to create a pillow that cushions a 2019 in which internal problems will be added the full impact of the commercial dispute with the United States.