Productivity at the biggest processing centers seemed to be slowing down last month. The reason was that industries noticed trade disputes to become more acute worldwide, while at the same time the emerging markets were pushed by rising inflation and dollar strengthening.
Asian countries economies, depending in a great extent on their exporting activity, have benefited much by the higher growth rates of global economy. However, Trump’s government decision to impose sweeping tariffs on the largest U.S.A. trading partners has cultivated uncertainty and has caused turbulence on financial markets. Analysts point that the greatest fear for China’s manufacturing may proceed from a possible disastrous trade war with U.S.A. According to the data aired on Friday, productivity of the second strongest economy in the world was stable in April. On the contrary, new orders for chinese exports were down for second consecutive month.
American delegation is visiting Beijing this weekend for a third round of trade discussions between the two countries. Washington is threatening to impose 50 billion dollars tariffs to imports of chinese products In case of a complete Chinese-american trade war, the world supply chain will be broken and economies from Europe to Mexico and from Australia to Japan will get hit. The danger became more serious on Thursday, when U.S.A. announced tariffs that caused turmoil in markets. Some analysts are interpreting the tariff threat as negotiating manoeuvre. According to Hannah Anderson of J.P. Morgan Asset Management, «these tariffs cannot remain in force for long». She is also pointing that «this U.S.A. government’s strategic is to make spectacular moves at the beginning of negotiations only to step backwards later into more moderate positions». Moreover, intensities of international trade target to asian export economies in a moment that their development seems to be declining.
«A possible escalation of trade disputes between China and Washington is the greatest danger for Asia manufacturing», Krystal Tan, analyst of Capital Economics, states. According to data aired on Friday, Japan’s manufacturing productivity has been at its lowest rates of the last seven months. They also show capital expenditure to be growing slowly, and this means that any problem in exports will put additional pressure to the shrinking economy of Japan. In addition, the increase in oil prices combined with dollar strengthening has hit the emerging markets currencies. At the same time geopolitical factors concerning North Korea, Iran and Italy are cultivating uncertainty.
Source: www.kathimerini.gr
