Economic growth of China dropped in the 3rd quarter to around 6.5 %, this is recorded as the slowest pace ever since the global recession of 2009. Furthermore, car sales in the region fell in 2018 for the 1st time in more than 2 decades. Besides, Apple had already given a cautionary in the initial weeks of January 2019 that the sales of iPhone in China was drooping. This is also a warning for the world that how a decelerating growth of Middle Kingdom will hinder the global growth as well as trade profits. However, despite of all this the Shanghai stock market has recorded a new highs. Though the outlook is not looking health anymore. Further, tariffs imposed by President Donald Trump on Chinese exports to the United States has started pinching the factories of the country. A precipitous and sudden drop of imports in December 2018 indicated the sharp decline of the economy. This has called for Beijing turning down the volume on its smugness and discuss about defusing the conflict regarding trade war with Washington.
If the trade deal happens will at least relax the investors and will possibly even juice the economic growth momentarily. However this will not end the distress happening China. Moreover, China’s major problem is its financial structure not the war for trade discount.
What goes extensively overlooked is the China’s already prevailing crisis. Though, this economic crisis is majorly due to the eviscerated banks, bankrupt organizations as well as bailouts of the state. This is named as financial crisis with Chinese attributes since they distinguish their state model of capitalism as socialism with Chinese individualities.
In a nutshell, financial crisis in the region is not simply about the current decelerating economy. Now, it has been in effect for a while and eyeing at the current scenario will not get cleared any time soon.