Chinese Export-Dependent Provinces Under Pressure From Trade Spat

Forex News

China’s export-dependent cities and provinces are struggling to reassure exporters, normalize employment and avoid social unrest amid the ongoing trade tension with the U.S.

Guangdong, China's biggest province in terms of GDP stated that corporate tax, electricity prices as well as transport and land costs cuts were required. Guangdong's exports dropped 2%, comparing to 2017. Another big-exporting province Fujian supported this offer.

Jonas Short, head of Beijing office at brokerage Everbright Sun Hung Kai told: "To some, this is a microcosm of what could happen to other export-dependent provinces should Trump roll out the full tariffs", adding: "It's also structural - cost rises due to land usage, as well as social security and funding pressures. But also the shock of these tariffs acted as a double whammy."

As we already know, Donald Trump pledged to impose additional tariffs on $200 billion in China’s imports. The already imposed duties hurt producers of light-emitting diodes. Additionally, JPMorgan expects China losing 700,000 jobs if the tariffs are implemented and China responds with retaliation.