Multiple rounds of financial stimulus have slowed the pace of China's economic slowdown, but they've failed to help it reverse course.
China's share of US imports has been declining ever since the Trump administration introduced tariffs on Chinese goods in 2018.Within 48 hours of Donald Trump's decisive victory in the US election, Chinese authorities last week, yet again, opted to break out the financial fire hose and spray around a little more cash.
While the belated and piecemeal nature of the stimulus rollout has mystified many, some China watchers believe the strategy could come in handy in future as Beijing awaits the full blast of Trump's trade war and adjusts its response accordingly.If Donald Trump lives up to his word, China is expected to lose its World Trade Organisation 'favoured nation status' with the US, as a first step, before imposing tariffs on the country and then, possibly, the rest of the world.
But China is in the midst of a painful deceleration as it battles a construction slowdown and one of the biggest property crashes in history, which has hit consumer demand and sent the country into a deflationary spiral.Lobster, wheat and iron exporters could be among the most affected. UBS reckons this will knock a significant hole in China's growth projections and will certainly lose more US market share following its hit during the previous Trump regime although it did manage to find alternative markets, as the graph below illustrates.
"This time, we think it could also lead to significant closing of businesses and loss of jobs, according to UBS Evidence Lab survey.
Iron Ore Chinese Real Estate Chinese Stimulous
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