Shipping Data Reflects Slowing Chinese Economic Growth

Effects of US–China trade war are becoming apparent

Workers pull a line from a cargo ship as it prepares to berth at a port in Qingdao in China's eastern Shandong province on October 19, 2018. China's economy grew at its slowest pace in nine years in the third quarter, as a campaign to tackle mounting debt and trade frictions with the US had an effect. (STR/AFP/Getty Images)

The imposition of tariffs has sharply reduced trade between China and the United States, a fact most recently demonstrated in shipping data.

Steel and aluminum traffic to the United States from China in March fell 53 percent, compared with the same month in 2017, CNBC reported, citing newly released shipping figures from the Seabury Global Ocean Trade Database.

Meanwhile, shipping of Chinese goods listed in a tariff category, worth a total of $34 billion, declined 21 percent since July, compared with the previous year.

About 90 percent of international trade involves moving goods by sea.

The Sino–U.S. trade conflict has become a point of international focus since the Trump administration began imposing tariffs on China in June.

In January, Washington announced that it would impose tariffs on Chinese-produced steel and aluminum. In April, it announced that tariffs on the $34 billion batch of Chinese goods would be applied in June, as well as an additional $16 billion worth of products.

In June, following impasses in negotiations with the Chinese regime, the U.S. government announced a 10 percent tariff on a further $200 billion of Chinese goods; in September, the tariffs on these goods were increased to 25 percent effective starting next year.

Before the tariffs, the value of goods shipped to the United States from China grew 10 percent in June, compared with the same month in 2017. China’s GDP in the first half of 2018 rose 6.8 percent, while the total value of exports and imports increased 7.9 percent, according to the state-run Xinhua news agency.

The National Bureau of Statistics published data on Oct. 19 showing that China’s GDP growth in the third quarter of 2018 has increased 6.5 percent, somewhat lower than the target of 6.6 percent.

Whether China’s GDP growth in 2018 can reach its target of 6.5 percent is uncertain. The International Monetary Fund (IMF) reported in the World Economic Outlook on Oct. 9 that the trade dispute between China and the United States has and will continue to have a negative impact. The IMF estimates that China’s GDP will grow 6.2 percent in 2019, 0.2 percent lower than the outlook in April.

On Oct. 17, CNBC cited Liu Chang, an economist specializing in China with British Capital Economics, as saying that the real situation of China’s economy could be worse than what the Chinese Communist Party acknowledges.

“We don’t trust official GDP data in China, so we think actual growth now is 5.5 percent instead of 6.7 percent,” Liu said. “And our measure has growth slowing more next year.”

Overseas Chinese media expressed concern about the state of China’s economy. In an Oct. 29 article, DW News, a pro-Beijing news website, reported that based on the IMF report, China’s economy faces steep challenges in various respects. For example, the value added to private companies was 9 percent in 2015, but just 5.6 percent in 2018 through September. E-commerce is developing very well, but the gap between disposable income and consumer spending in urban and rural areas is widening.