In the industrial country, China, the effects of the trade war on the Chinese economy are measured in idled machinery and empty bar stools. China’s economic outlook has been downgraded, along with other Asian trading hubs, with the Asian Development Bank citing gloomier prospects due in part to the escalating tariff war and slowing Chinese economy. Economists reported the downgraded China’s growth forecast in 2019 from 6.3 per cent in April to 6.2 per cent in a report released on Wednesday. Growth in 2020, the development bank predicts, will be 6.0 per cent, down slightly from 6.1 per cent forecast previously.
The consequences of the trade war on the Chinese economy, the industrial country, China, are calculated in idled machinery and empty bar stools. Together with other Asian trading hubs, China’s economic outlook has been downgraded, with the Asian Development Bank citing gloomier expectations, partly due to the worsening tariff war and slowing China’s economy. In a report released on Wednesday, economists announced the downgraded growth forecast for China in 2019 from 6.3 per cent in April to 6.2 per cent. Development bank estimates growth in 2020 will be 6.0 percent, down slightly from previous projections of 6.1 percent.
China’s import and export data for September was worse than expected in the midst of the country’s continuing trade tension with the US. In terms of the U.S. dollar, China’s exports dropped from a year earlier by 3.2 percent in September, while imports fell by 8.5 percent in the same period, Reuters said. The total trade balance of the nation was $39.65 billion in September, Reuters reported. Economists polled by Reuters had expected a 3% fall in Chinese exports denominated in the U.S. dollar and a 5.2% decline in imports in September compared to a year ago. Last month’s total trade surplus in the world was estimated to be $33.3 billion
China’s overall trade in 2019
Benefit for Pakistan:
Economic experts hinted at emerging trade and business opportunities for Pakistan following the US-China trade war. shipping companies in Karachi believes that in this feud, Pakistan might potentially be the third most fortunate beneficiary. Adviser to Prime Minister Abdul Razzak Dawood has recently said, “The trade war between China and the United States is getting bigger and bigger by the day… and demand for goods is not decreasing (on the U.S. market). To order to benefit from this war, Pakistan needs to explore ways.
Ehsan Malik, CEO of the Pakistan Business Council, said, “China-US trade war has placed Pakistan in an advantageous position and in some areas such as textiles we have become more competitive than China. It provides Pakistan with an opportunity to improve its exports to the United States and to revive its closed production capacity
Out of these many Chinese products, Pakistan has the capacity to produce a large quantity of products as exports to the US market. Of course, the manufacture of products from each of these categories would depend on the resources available to Pakistani industries. Pakistan, for instance, has a booming sportswear industry. Following benefit that china can avail by investing in or trading with Pakistan:
- Strategic location – the RCD highway crossing Iran, Turkey and to Europe never really borne the desired fruits.
- Population of 220 million – a young and vibrant labor force, where 60 percent of the population is below the age of 30.
- Economic revival through reforms – Pakistan has been number 8th reformer as per World Bank’s ease of doing business rankings
These enormous amounts of foreign investment benefits can lead to the creation of special economic zones in Pakistan. Establishing new industries will be closely linked to foreign investment in improving the country’s infrastructure to reduce the cost of long-term growth.
Pakistan freight companies, such as Combined Freight International, may potentially end up expanding exports to the US, becoming a hot spot for international investment (especially from Chinese investors). Nonetheless, in how well this potential can be exploited, other economic and political constraints can put a dent.