If you looked at the market exchange-rate basis in 2018, you’d notice 16% of the global economy could be accounted to China. Therefore, it has been hard for many brands to ignore the vital importance of the Far Eastern country.
However, for investors and businesses, the important figure to note is economic growth. For the past decade, China has shown great potential and has accounted for 30% of global growth. But it looks like that period of sustained growth is coming to an end.
Trade War With The US
Many Chinese consumers are now making an active choice to be more conservative in their spending. Whether this is foregoing some purchases, or buying cheaper alternatives, the impact on the economy is similar. Consumers are talking about being more financially secure and keeping funds in reserve.
But it isn’t just consumer spending habits that are changing. The Chinese-US trade war that is currently going on is impacting growth in the country. The result of this trade war is hard to actually state. However, exports from China have fallen by 4.4% in December and imports fell by 7.4% in the same month. This is the worst drop in Chinese economic figures for two years.
As a result, output figures in Asia, the US and Europe are all performing badly. Prices for stock and oil have also declined recently.
This has had a knock on effect. Financial markets are looking worried and economists are now revising forecasts for global growth down. Even the world bank is looking concerned. They said on the 8th January that the global economy has some storm clouds brewing.
Employment Rates Remain Strong
Employment rates in Europe are strong, which is something to be positive about. However, there are concerns about the job losses that the UK market is to see. Car manufacturing and retail has been hit pretty hard in the past few months and will continue to see some loses as the full impact of Brexit hits.