What’s the Worst-Case Scenario for China if the Trade War Intensifies?

Just how bad could the trade war be for China?

U.S. - China Trade War

Just how bad could the trade war be for China? According to economists and analysts, if the trade war continues to escalate, it could lead to a crash in economic growth, a spike in debt and could even cause foreign companies to exit the Chinese markets.

Financial markets could see China’s growth fall below 6% for the first time in nearly three decades, to touch around 5.8%. Manufacturing companies could look for safer alternatives due to a hike in tariffs causing costs of goods to rise.

China’s debt, which is already close to 300% of output, could rise beyond the government’s control because of more tariff hikes. Analysts are comparing China’s situation with that of Japan where the government and the central bank had overstimulated the economy but have failed to curb slowing growth.

Manufacturers already suffering losses due to rising costs of raw materials and labor may not be able to handle loss of sales due to higher tariffs.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

Related Articles

Comments

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers