China’s exports tumbled the most in the last couple of years this February 2019 whilst its exports also has slumped three months in a row.
“This situation despite various support measures by Chinese government figures reinforce that economy slow down and trade recessions,” Raymond Yeung, Greater China chief economist
Exports in February fell by 20.7% inspire of a 9.1% jump in January. Though there is a huge and fast-growing domestic economy and there are plenty of opportunities the small manufacturers are having a set back due to strict policies and bad credit.
Employment Crisis Looming in the Manufacturing Sector
China’s manufacturing sector has barely expanded since October 2018 with the economy slow down impacting them the greatest. Both domestic, as well as international demand, has ebbed. Manufacturing industries have started laying off employees. Foxconn, a contractual manufacturing company is reportedly cutting jobs worldwide. Their Chinese factory which at one point had140,000 employees has only 70,000 to 80,000 employees currently.
Other companies like Bern Optical, a manufacturer of glass lens have laid down 5000 employees. Flextron plastics have provided over 6 long holidays to their employees to tackle the slump.
It is worth to notice that the economic downturn has hit private, small and medium enterprises the most in China. These enterprises comprise about 80% of Chinese employment. If the SME’s fail unemployment will further rise.
The economic crisis may be far worse than it has been projected
The Chinese government has reportedly raised a number of measures to stabilize its economy. However, the mount of bad loans, high rate of bank interest as well as restrain economic policies are detrimental to small and medium enterprises.
Global economic analysts feel that the Chinese economic crisis might be far worse than it has been projected as government statistics have a reputation of being made up.
Trade dispute with U.S makes the outlook still gloomy
Beijing’s trade dispute with the U.S is a further cause of worry.
“Exports and imports in dollar denomination have plunged significantly in comparison to last year,” said Julain Evans-Pritchard, senior China economist at Capital Economics.
He further added that “China’s trade disputes with U.S makes the outlook still gloomy.” According to sources both Washington and Beijing appear to be approaching the finish line on trade negotiations that are likely to end by this month. Manufacturers are hoping for quick relief to help them surpass the economic downturn.
