Economic reports from Washington D.C. indicate that the Administration’s aggressive approach to tackling trade injustices by China is impacting the Chinese economy and people. Economic growth for the quarter ending June 30 was the lowest in 26 years. In 2018, economists believed a strong China could withstand economic pressures for a significant period of time, however, that optimistic outlook has not become reality. 2019 is now forecast to be another slow-growth year with more downward momentum expected and Chinse newspapers are reporting that there is a generally depressed attitude by the public towards the economic climate.
Those seeking a quick end to the trade dispute point out that slow or declining economic growth in China will have a negative impact on countries that export to China. South Africa, Brazil, South Korea, and Australia are named in the report. One prognosticator has even forecast very low economic growth around the world as consequence to the U.S.-China trade dispute.
China’s National Bureau of Statistics acknowledges that this past quarter was the lowest growth period since 1993. The Chinese government has responded by lowering interest rates for businesses and expanding government-subsidized programs including government purchases of varied products.
China did not help the situation when earlier this year they chose to renegotiate the agreed-upon terms for a future trade agreement which subsequently led to additional tariff pressures on Chinese businesses. This left a bitter taste in senior U.S. Administration representatives hardening their approach in subsequent discussions.
Meanwhile, agriculture, in general, is in the throes of this unintended economic consequence. Minimizing economic losses is the Administration’s objective, but making business sectors whole is not on the agenda. For the California citrus industry, a correction for export opportunities into China is not likely for the 19/20 season. Let’s hope we are wrong.