There is a deep crisis on China’s economy, copper ends, silence in factories

US-China Trade War: The impact of the heavy tariff imposed by former US President Donald Trump is now clearly visible on China’s economy. Even though Beijing is showing that he does not mind this trade war, but the truth is that China has come under pressure of this trade war, and that too at a time when its economy is struggling with the lethargy, weak domestic demand and real estate crisis.

Decrease in production

Purchasing Manners’ Index (PMI), considered the measure of China’s industrial health, has fallen to 49 in April. That is, the decline in production. This figure was 50.5 in March. The score below 50 shows that the industries are shrinking. It is clear that American tariffs are shocking China’s manufacturing. Export has slowed down, unemployment is increasing and logistic sector is delayed.

China’s biggest concern

China’s copper reserves are becoming very low and if this speed is maintained then the stock can be completely over by June. The huge demand for copper from the US and the fear of potential tariffs has cut off copper supply to China from all over the world. Big trade companies like Mercuria have described it as “the biggest supply shock in history”. The situation is so bad that China has to seek exemption from the tax imposed on American copper.

China is silently making ‘whiteist’

Although the Chinese government is not ready to bow down openly, but something else is going on behind the curtain. According to the report of Reuters, China has prepared a ‘whiteist’, that is, the list of American products which will be exempted from tariffs. This includes important products like medicines, chips and aircraft engines. Companies are being contacted privately and told that their products can get exemption, provided they apply from the right channel.

Government is giving trust in trust

Senior officials of Beijing are talking about supporting companies and unemployed through easy loans, support policy and sectoral help. But the ground reality is that big manufacturers are getting the most affected, because exports are being affected due to heavy tax. Small industries, which are labor-interest, are still in a little relief.

Where is China’s economy going?

Economic experts believe that this year, China’s growth can be just 3.5 percent, which is much less than in the past years. Manufacturing is weak, the service sector is also on the slope and the trust of the market is also constantly falling.

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