MILAN, Aug 8 (Class Editori) – Beijing delivers some positive figures regarding exports, despite the news of the PBC's decision to have the yuan hit its lowest level since the 2008 financial crisis – way past the psychological threshold of 7 (7.0039 against the US dollar). This way, the Chinese central bank allows the national currency to oscillate between +/-2% during the same day. Last Monday, when the yuan dropped past 7 (but holding a 6.9 fixing), the US President Donald Trump accused Beijing of being officially depreciating their currency for their own commercial ends.
Exports from China unexpectedly rose 3.3% year-on-year in July, recovering from a 1.3% decline in June, going beyond market expectations predicting a 2% drop. Sales abroad bounced back up despite the US' new round of tariffs, hitting around 300 billion dollars of Chinese goods and set to come into force on September 1st.
Meanwhile, imports fell by 5.6% on an annual basis again in July, after a 7.3% drop during the previous month and a 8.3% drop in market expectations. Registered general decreases in exports toward the US (-19.1%), Japan (-13%), South Korea (-20.1%), Taiwan (-6.8%), and the EU (-3.3%); growth is registered in shipments toward Australia (+18.7%), and other ASEAN countries (+0.4%).
Also in July, China's trade surplus rose to 45.06 billion dollars, against the 27.49 billion dollars registered during the same month of the previous year, and performing better than the market consensus of 40 billion. From year to year, exports grew by 3.3%, while imports decreased by 5.6%.
After US President Trump announced 10% tariffs on 300 billion dollars of imported Chinese goods, starting from September 1st – also called the phase 3 of the trade war, which is greatly affecting the tech sector – the economists have started to increasingly fear that the global recession may be near. "The financial markets are increasing the risks," wrote Joseph Lupton, a JP Morgan economist. "Equities continue to slide while volatility increases – but the alarm bell is ringing stronger in the interest rate markets, where the reverse in the yield curve has been stronger than just before the beginning of the last major financial crisis".
The latest warning signal came when central banks in New Zealand, India and Thailand surprised the markets with an aggressive easing, while the Philippines should also be cutting the cost of money as of today. Meanwhile, Chicago Fed chairman Charles Evans explained that he is open to the idea of lower rates, in order to strengthen inflation and to counteract the risks affecting economic growth due to trade tensions.
(Source:Class Editori)
Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.
A single purchase
