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global factories struggle as growth fears rise

Fears are growing about the state of the global economy after a slump in Chinese manufacturing output growth and a dramatic go-slow in business activity across the US and Europe. The government is still confident that the economic growth board of 5.4 percent asset in the 2018 state budget draft can be achieved. Sri Mulyani: Govt Will Strive to Achieve Economic Growth Target. Read below about global factories struggle as growth fears rise.

 

The report on China’s economy in the third quarter of this year (at the end of September) shows that its growth rate was 6.5%, the lowest since the first quarter of 2009. The decline in China’s economic growth was predictable, but the reported figure was lower than the previously forecasted 6.6 percent. The rate was 6.7% in the previous quarter, and it has been feared that China’s economic growth may even decrease in the coming months. Although the growth rate is above 6% on a global scale, the Chinese economy has grown at a slow pace over the past two decades and has ranked the nation’s second-largest economy after the United States. Given this situation, China’s economic growth also affects global economic conditions.

 

global factories struggle as growth fears rise

Renmin’s Beijing economists said they expect China’s economic growth to reach 6.6 percent this year and drop by 6.3 percent in 2019. The reason for this slowdown is economic challenges, trade-related challenges, and structural reforms. Forecasts released by the Chinese Academy of Sciences on Tuesday indicate that China is under pressure from the US-led war on trade. However, Renmin University of economists warned that China would face problems even if trade-offs with the United States was resolved. Because the country is facing a deteriorating global trade, it is facing a drop in export growth and a weakening of its currency.

global factories struggle as growth fears rise

Economists said it’s hard to take short-term measures to slow down China’s current economic pressure. While recent policies should stop further economic growth in the next year, a new round of structural reforms in supply is also needed. They predicted that 2019 will be crucial in restoring the Chinese economy and turning its long-term into a slower and better-quality economic model.

 

Experts said that the main reason for the decline in China’s economic growth has been the US trade and the introduction or increase of mutual customs tariffs. The United States had significant trade deficits with China in recent years, and US President Donald Trump has accused China of pursuing an unfair commercial policy against the United States and has imposed tariffs on some Chinese imported goods to reduce that deficit.

 

global factories struggle as growth fears rise

The global spillovers from China’s reduced rate of growth. A chief economist at MAPI, a manufacturing research group, said that many commodity-exporting countries, such as Malaysia, Australia, and Chile, have also been forced to reduce their purchases of U.S. goods as their own economies have slowed.

 

On Friday France joined Germany in raising investor concerns. The weaker French performance was a drag on business growth. If France’s PMI bounces back as the effects of the protests fade, the eurozone economy has clearly shifted down a gear and looks set to grow at a more moderate pace next year.

 

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