No respite from trade uncertainty – ING

Prakash Sakpal – Asian Economist at ING – offered his take on the ongoing US-China trade disputes and its impact on China’s economic growth.

Key Quotes:

“China’s industrial profits and manufacturing and non-manufacturing purchasing manager indexes (PMI) should reflect the economy reeling under the trade tensions with the US. Just about a month ago, things on the trade front were moving in the desired direction with both sides nearing a phase one deal soon, so to speak in mid-November. The latest news hasn’t been very good. First, the postponement of the deal signing to December, and now probably to 2020.”
 
“The sentiment-driven PMIs may not capture the latest trade developments. Nor do we anticipate a dramatic improvement from a seasonal bounce in November that typically follows the holiday-related slump in October, leaving the manufacturing PMI a touch under the 50 threshold. And, the nearly two-decade low industrial production growth in October clearly bodes ill for the profits growth, which has been in the negative territory recently. All this keeps alive the risk of further slippage in China’s overall economic growth in the last quarter of 2019.”