China’s hot economy hits a cooling trend
Drop in exports linked to Trump tariffs
BEIJING — China’s export orders shrank in September as a tariff battle with Washington over technology escalated, adding to downward pressure on the world’s No. 2 economy, two surveys showed yesterday.
The reports add to signs Chinese trade, which had held up despite U.S. President Trump’s tariff hikes, might be weakening. That adds to pressure on an economy that already was forecast to cool due to slowing global consumer demand and lending controls imposed to rein in a debt boom.
The official China Federation of Logistics & Purchasing’s monthly measure of new export orders fell to 48 from August’s 49.4 on a 100-point scale on which numbers below 50 show activity shrinking.
A separate index by a business magazine, Caixin, showed new export orders fell at the fastest rate in more than two years. The magazine said companies blamed “trade frictions” and tariffs.
Overall, the federation’s monthly purchasing managers index showed manufacturing activity decelerated to 50.8 from August’s 51.3. Caixin said its index fell to 50 from 50.6.
“Downward pressure on China’s economy was significant,” economist Zhengsheng Zhong said in Caixin’s report.
The resiliency of China’s $12 trillion-a-year economy until now has allowed President Xi Jinping’s government to reject pressure for changes in initiatives such as “Made in China 2025” that call for state-led creation of champions in robotics and other technologies.
Washington, Europe and other trading partners say those violate Beijing’s market-opening obligations.
The International Monetary Fund and other forecasters expect China’s economic growth this year to fall to about 6.5 percent from 2017’s 6.8 percent. But that slowdown is due mostly to the ruling Communist Party’s long-term efforts to steer China to self-sustaining growth based on consumer spending instead of trade and investment.