{"id":139647,"date":"2019-01-03T10:09:44","date_gmt":"2019-01-03T15:09:44","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=139647"},"modified":"2019-01-03T10:12:50","modified_gmt":"2019-01-03T15:12:50","slug":"trade-war-taking-its-toll-as-chinese-pmis-fall-into-contractionary-territory","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/01\/trade-war-taking-its-toll-as-chinese-pmis-fall-into-contractionary-territory\/","title":{"rendered":"Trade War Taking Its Toll As Chinese PMIs fall Into Contractionary Territory"},"content":{"rendered":"
January 3, 2019<\/div>
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By Orbex<\/a><\/strong><\/p>\n

The damaging effect of the trade war on the Chinese economy was visible again this week in the latest economic data for the world\u2019s second-largest economy. The Chinese Caixin manufacturing PMI for December fell to 49.7 from the prior month\u2019s 49.7 reading.<\/p>\n

The key point here is that the reading is now below the neutral level of 50, indicating a contraction and backing up a similar decline seen in the official manufacturing PMI for the month which fell to 49.4 from 50 prior.<\/p>\n

\"trade
\nSource: TradingEconomics.com<\/em><\/span><\/p>\n

Domestic Demand Under Pressure<\/strong><\/b><\/h2>\n

The breakdown of the data showed the new orders component of both the readings falling below the neutral level, also indicating that not only is the export sector facing a contraction in manufacturing, but also the broader domestic manufacturing sector in general.<\/p>\n

Chinese Data Weakening Across the Board<\/strong><\/b><\/h2>\n

Coming on the back of a decline in industrial profits for November, which fell to 1.8% year over year from 3.6% in October, as well as weaker retail sales (8.1% November and 8.6% October), the data confirms the general negative shift taking place across the economy.<\/p>

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Chinese Government to Step Up Fiscal Plans<\/strong><\/b><\/h2>\n

The trend in Chinese data suggests that not only has the trade war\u00a0harmed export sector<\/a>\u00a0growth but that it has also weakened export-linked supply chain companies, weighing on domestic demand.<\/p>\n

If domestic demand doesn\u2019t quickly receive a boost from fresh fiscal stimulus,\u00a0further deterioration<\/a>\u00a0will take place which will then start to erode job security and create even bigger problems within the economy.<\/p>\n

With this in mind, we are likely to see the Chinese government stepping up the pace with the delivery of its planned infrastructure investment in the economy.<\/p>\n

Article Provided By Orbex<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex The damaging effect of the trade war on the Chinese economy was visible again this week in the latest economic data for the world\u2019s second-largest economy. The Chinese Caixin manufacturing PMI for December fell to 49.7 from the prior month\u2019s 49.7 reading. The key point here is that the reading is now below […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-139647","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/139647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=139647"}],"version-history":[{"count":4,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/139647\/revisions"}],"predecessor-version":[{"id":139651,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/139647\/revisions\/139651"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=139647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=139647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=139647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}