Due to severe economic shocks, China in a weak position in the trade

Beijing: The negotiations to resolve the trade war between the United States and China have claimed to be entered the final stage. However, it is at this stage that China has been receiving jolts one after the other that makes it weak in the trade negotiations, as per analysts. Both the important parameters of the Chinese economy, namely the internal demand and provincial economic development have reported negative growth. At the same time, a leading economic research group has claimed that the Chinese information is not reliable.

17 out of the 31 Chinese provinces have failed to achieve the expected growth rate. At the same time, as per media reports, two major Chinese industries have defaulted on the loan instalments and are preparing to declare insolvency. The sale of cars in the Chinese market, known as the largest automobiles market, has declined in the year 2018 and has been the lowest in the last two decades. The purchasing power of the citizens in Chinese cities has also reduced, and as per received information, demand in the cities has fallen by 3%.

The growth rate of the Chinese economy had already declined to 6.6% in 2018. The information above, explicitly endorses the prediction that the Chinese economy is slowly heading towards recession and the trend is likely to continue for the next few years. The Chinese manufacturing index has declined to less than 50 for consecutive two months, and this is considered to be a recession in the sector.

Against this background, the international economic research groups and analysts also have started openly showing a negative attitude towards China. Research group ‘Capital Economics’ has presented a report saying the Chinese economy has grown only by 5%, in the year 2018. Leyland Miller, the chief of leading analytical institution ‘China Beige Book’ has accused that the information from the Chinese agencies is totally unreliable.

The economists are claiming that exposure of the hardships in the Chinese economy during the final stages of the trade negotiations with the United States will weaken the Chinese side. A leading company in the financial sector ‘Hayman Capital Management’ has warned in its report that President Trump will exploit this weakness in the Chinese armoury as a golden opportunity. The report also claims that Trump will succeed in extracting the maximum concessions from China.