Business World

Cooling Chinese Economy Cuts Profits For American Companies

The Chinese economy cooled to its slowest in 28 years in 2018 after weak domestic demand and US tariff sanctions. It raises concerns for the world economy and manufactures like Apple and other big car makers.

The people in China are worried about their declining economy, the risks of job loss looms around and a mountain of debt.

Analysts from the Reuters  predict that the Chinese economy grew around a 6.6 % in 2018, after the slowest growth in the last quarter of 2018.

This year might be the worst as the economy is expected to slow down even further to 6.3% before it picks up some momentum. Even if the United States galvanise a cheap trade tariff nothing’s going to stop declining Chinese economy because of the weak domestic consumer demand.

Some economist at BNP Paribas believe that China can’t prevent deflation, recession like it did in the 2008-09 global meltdown.

Weaker consumer spending will squeeze companies’ profit margins, discouraging fresh investment and raising the risk of higher job losses.

The US-China trade truce ends on the 1st of March and Washington has threatened to sharply hike tariffs if there are no substantial signs of progress.