Beijing: Against the background of the trade talks with the United States and the parliamentary session, it has been observed that the economy has received major shocks. Exports, the mainstay of the Chinese economy, have recorded a decline of 20% in February and imports, trade profits and stock markets also have been hit severely. While the official Chinese agencies are revealing this downfall in the economy, a leading study group from the United States has made a sensational claim that the Chinese economy, in reality, is 12% smaller than the current projection.
The severity of the jolts received by the Chinese economy has consistently been increasing since US President Donald Trump declared the trade war. This is clear from the statistics published by the international as well as the Chinese government financial institutions. At the end of this year, it was revealed that the Chinese economy recorded the lowest growth index in the last three decades. But the new statistics reveal that the downfall in the Chinese economy is continuing even today.
As per a report published by the National Bureau of Statistics of China, the Chinese exports have declined by 20.7% in February. This is the biggest decline in Chinese exports, the most crucial factor in the Chinese economy, in the last three years. At the same time, a reduction of 5% in imports, also has been recorded. The import-export decline has also hit Chinese trade profits. After recording profits of $39 billion in January, the profits have declined to a mere $4 billion in February.
The Chinese stock markets reacted very sharply to the decline in these major contributors to the Chinese economy. The main stock index of China, the Shanghai Composite Index declined by nearly 4%. This is the biggest decline in the last five months. Only last month, information was received that the Chinese manufacturing sector also was in the doldrums.
The Chinese government also was forced to accept the decline, and Prime minister Li Keqiang said that there are major threats and challenges in front of the Chinese economy, shortly and the situation is very complicated. At the same time, the Chinese Prime Minister said that the Chinese economy would be able to record a growth rate of 6% for the year 2019.
It is clear that the trade war with the United States is the main factor behind the downfall in the Chinese economy. Therefore, the trade talks with the United States have become decisive for the Chinese government and the analysts have warned that a failure of these talks will push the Chinese economy deeper into trouble.
Meanwhile, a leading study group in the United States has claimed that the Chinese claims of grown in its economy, over the last few years are not true. The new report published by the ‘Brookings Institution’ has accused the Chinese agencies of inflating all the important statistics regarding the Chinese economy, during the period of nine years, from 2008 to 2016. Because of these fake statistics, the current projected size Chinese economy size is higher by at least 12% than the actual.