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Trade War Threatens China's High-Tech Industries

Trade War Threatens China's High-Tech Industries

Trade War Threatens China’s High-Tech Industries

CHINA: The trade war has reduced output growth for China’s high-tech industries such as its robotics and integrated circuits sector with reports showing a slide in figures since September.

Although as recently as May, the country had reported that industrial robot production was rising by over 30 percent on the year, since June, growth has withered to single digit figures and it was reported to be 9 percent in August. This was prior to July’s tariffs whereby the robotics industry was hit with an additional 25 percent of tariffs. Integrated circuits have also experienced a similar downward trend with growth reported to be just 5.8 percent in August which is half of the observed growth in July. Additionally, the country has witnessed a reduction in the production of automobiles since July, with the decline widening to 4.4 percent in August.

That being said, China’s economy as a whole is still healthy in accordance to September’s statistics, with industrial production increasing overall and retail sales of consumer goods experiencing a growth, while the decline in the growth rate of investment in fixed assets decreased. Mao Shengyong, a National Bureau of Statistics spokesperson, has stated that the Chinese economy is highly adaptable with a capacity for mitigating external risk. This builds upon the local government’s efforts to develop infrastructure projects so as to boost the economy.

Regarding the trade war, China’s manufacturers have already signaled their concern, especially as manufacturing export orders from Guangdong Province experienced a dip to below 50 in June for the first time in two and a half years, with the figure remaining below 50, at 49.3 for August. This has spurred the local Communist Party’s Central Committee to expand local demands through fiscal policies in July as well as direct projects to the public.

In August, the central government had approved a proposal to improve subways in Suzhou, where many overseas-affiliated export companies are located. Thus, enabling infrastructural developments in the region which is aligned to the government’s infrastructural push.


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