China Avoids Severe Economic Impacts of U.S. Led Trade War

The Dow Jones Industrial Average .dji fell 1.27 percent, the S&P 500 .spx lost 1.44 percent and the Nasdaq Composite .ixic dropped 2.06 percent.

You should always have some healthy scepticism around China's official growth figures, but they remain a relatively useful indicator of the trajectory of the economy.

PHNOM PENH - Cambodia's stocks finished higher on Friday, with the Cambodia Securities Exchange Index up 4.2 points, or 1.2 percent, to close at 353.85. "The Shenzhen, small-cap and start-up indexes ... are already heavily oversold, so a rebound could happen any time", analysts at Donghai Securities said in a note.

"While President Trump has threatened to label China a currency manipulator, the laws governing the report require countries to meet three thresholds to receive the designation: persistently intervening in currency markets; running a significant trade surplus with the US; and running a large current-account surplus overall".

China's exports grew strongly in September, but analysts said that the numbers may have been boosted by companies rushing to ship goods before new U.S. tariffs kicked in near the end of the month.

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, called recent market movements "abnormal fluctuations" which didn't reflect China's economic fundamentals and "stable financial system".

Washington has so far slapped $250bllion (£190.4billion) of tariffs on Chinese products.

Beijing and Washington have been also divided over Taiwan, North Korea and the South China Sea, home to some of the world's busiest shipping lanes, where China and several Southeast Asian nations have overlapping maritime claims.

The MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent after earlier falling as much as 0.9 percent ahead of the release of China's latest GDP reading.

It marks a slowdown from the 6.8% and 6.7% in the previous two quarters and is set to put pressure on Beijing leadership to act. Because of higher export and lower import numbers, China is running a bigger trade surplus with the US, which actually helps boost China's GDP. It inched up to 5.4 per cent in January-September from a record-low 5.3 per cent in the first eight months of the year as Beijing has reined in spending on bridges, railways, and highways. Shanghai stocks have declined 9.21 percent this month.

The conflict has more directly hit confidence in China. Auto sales, for instance, fell for a third straight month in September, putting the country on track for its first yearly decline in passenger-vehicle sales in almost three decades.

While the Chinese stockmarkets notched up their strongest daily gains since early August on Friday, it was a one day wonder and couldn't help them to erase the losses of another week of miserable trading. Trading volume stood at 343.7 million shares worth 4.7 trillion won (4.2 billion USA dollars).

In Hong Kong, the Hang Seng index was down 0.8 percent and the Hong Kong China Enterprises Index lost 0.6 percent. The top gainer on Hang Seng was Sands China Ltd, up 2.55 percent, while the biggest loser was China Petroleum & Chemical Corp, which was down 3.68 percent.

  • Zachary Reyes