September 3, 2019

DECOUPLING: China’s factories had a surprisingly good month. But there’s trouble ahead for the economy.

The latest data presented some troubling signals. New export orders fell to the lowest level this year — an indication that foreign demand is declining as the US-China trade war rages on, said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.

The trade war has shown no signs of abating, and the most recent escalation comes as concerns about slowing global growth are building, and as the fear of recession stalks several major economies. The latest round of tariffs that the United States and China imposed on each other went into effect Sunday.

Zhong pointed out in a note accompanying the Caixin data that there was “no sign of improvement” in business confidence.

“China’s economy showed signs of a short-term recovery, but downward pressure remains a long-term problem,” he wrote.

Plus: “What China is doing now to support its economy may not be enough to stave off problems later this year.”

While China’s military buildup and neoimperialist ambitions are worrisome, Trump is hitting them where it hurts.

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