Asia Minute: Slowing Chinese Economy Hits Neighboring Countries
A Chinese trade delegation is heading to Washington this week for two days of meetings with U.S. officials. The discussions take place as a series of American companies are reporting that slower growth in China’s economy is hurting their profits—and that impact is also being felt in the Asia Pacific.
China makes up about ten-percent of all sales for the U.S. heavy equipment maker Caterpillar. The company saysthose Chinese sales tumbled last quarter.
Chipmaker Nvidia said weaker demand for its gaming microprocessors in China will hurt its overall sales.
Earlier this month, Apple saidslowing phone sales in China will hits its profitability.
But the impacts of a slowing Chinese economy stretch far beyond Wall Street and into the Asia Pacific. China is Australia’s biggest trade partner— taking nearly a third of its exports — largely commodities such as iron ore and coal.
But slower Chinese growth also affects technology exports coming from countries such as Japan and South Korea. Both of whom also count China as their largest trading partner.
Last week,Japan reported its December exports to China fell by 7-percent — a big number for that category. And South Korea’s projections for exports of memory chips, machinery and computers are dropping because of China — whose economy is growing at its slowest pace in nearly 30 years.
Part of the outlook for China’s growth depends on those trade talks with the United States — which have a deadline attached.
Without an agreement, tariffs on a series of Chinese products coming into the U.S. will rise from 10-percent to 25-percent — starting four weeks from this Friday.