Last week, UK PM contender Jeremy Hunt weighed in on the Hong Kong riots, warning China against ignoring its Hong Kong turnover commitments. The Chinese responded by branding his words colonial meddling. Along with its ongoing tariff strife with the US, China is clearly feeling the brunt of the global economy.
No longer an isolated ‘Middle Kingdom’, its aspirations are now global, and its economic interests stretch as far as Africa and the Middle East.
Ironically, Trump’s threats have only served to a shipments scuttle to pre-empt additional tariffs, resulting in an even wider trade surplus with the US – 8% more in a month, to be precise. Its deficit with Australia, on the other hand soared by 19% in April.
That’s not to say the economy is not suffering: Markit’s Caixin Manufacturing PMI for June shows a contraction; however, services are taking up the slack, as the government opens its economy up to foreigners in an increasing wave of restrictions being lifted in both manufacturing and financial services.
More or less stable in the $30-50 bn bandwidth for more than a decade, China’s trade balance has been fluctuating at a wider-than-normal latitude since the beginning of this year – this as the stewards of the economy show more and more reluctance to interfere with the Yuan.
The main steward of China’s economy is PM Li Keqiang is a lawyer with a PhD in Economics. Will his policies prove to be a blessing or a bane?