China’s struggling economy overly reliant on exports, 2nd trade war with Trump a nightmare

The Wall Street Journal (gated) says Trump’s proposed 60% tariff on imports from China would cause much steeper economic damage to China because the tariffs would be higher and China’s economy is much more vulnerable.

The Journal makes the point that China’s export surge is a bright spot for an otherwise struggling economy.

(ps. I posted on this earlier, and its dangers:

• China doubling down on its overcapacity strategy, digging the economy into a deeper hole

)

But, other sectors are in dire straits:

• epic property crunch is now in its third year
• burned by the property meltdown and lingering trauma of the pandemic, Chinese consumers are keeping a tight grip on their wallets
• local government finances are under severe strain
• private-sector confidence is in the doldrums

And that:

• reliance on manufacturing and exports leaves China much more sensitive to an escalation in the U.S.-China trade war.

This article was written by Eamonn Sheridan at www.forexlive.com.