Analysts at Nomura have come forth to a conclusion to their study of the US trade tariff situation, saying its effect on China's economic growth may only be limited to none.
FX Street reports that the Chinese exports, which are taxed heavily and are affected by the tariff could amount to highs of $250 billion. It is worth half or more than half of the annual exports from China to the US, or about 58 percent of last year's exports. The amount may naturally seem alarming; contrary to how viewers look at it, however, it is not as bad as it seems.
The GDP and the rest of China's exports around the world more than makes up for that deficit. To date, the rest of the Chinese exports amount to $2.26 trillion, while the GDP is good for $12.25 trillion.
Given that amount, it still remains whether investors are protected from the blowback emerging from China's surprise trade war with the US.
The news from SCMP says that trading has been lukewarm in the Chinese stock exchange. While juicy trade headlines have been modest to limited, the impending release of a list of Chinese imports that are included in the 25 percent tariff is being monitored closely.
This situation has led to a lot of investors looking for answers as to what's coming next in China's trade conflict. The general trend among traders in the Chinese stock market is caution; the reaction is to actions concerning what might happen when the US makes good on its tariff intentions.
Most have adopted a 'wait-and-see' approach in response to US statements that the tariffs are being put on hold. No one can really be sure, as investors are trying to read the situation carefully.
While analysts think that China would just be doing fine in spite of the tariff conditions, the problems arise from what people will think of the situation. They could react positively and go the way analysts think they would; invest and let China's economy buffer them from the fallout. They could also go the way of investing in other countries as the conflict passes by, and that could not be good for a Chinese economy that's heavily wooing investors.
