Friday, April 26, 2019
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China and Japan reassure the economic planet

After a series of rather disturbing statistics, the second and third largest economic powers of the planet unveiled, this Thursday morning, in Beijing and Tokyo, indicators seeming to show that the global slowdown feared by the markets was perhaps not as brutal as feared.

Speaking first in the morning, the Japanese executive said that the country's Gross Domestic Product (GDP) had grown by 0.3% quarter on quarter from October to December. At an annualized rate, this would correspond to an increase of 1.4%, in line with what the independent economists had hoped for. This recovery in activity reassures a little after a contraction in the third quarter, when businesses and households had suffered from several natural disasters, including floods and an earthquake.

Rebound of Japanese consumption

In the last quarter of 2018, productive investments rose 2.4% after falling by almost 3% over the previous three months. Private consumption, which traditionally accounts for 60% of the country's GDP, increased by 0.6% quarter-on-quarter, with a sharp rebound in spending on hotels and restaurants in regions previously affected by typhoons or earthquakes .

Over the last three months of 2018, exports of "Made in Japan" products and services posted their best performance of the year. On a quarter-over-quarter basis, their rise was 0.9%, even though shipments of goods, including electronic components, to China continue to worry Japanese factories.

Beijing revives its exports

Officially, however, Beijing has released this Thursday, rather positive data on the health of its foreign trade. Its customs ensure that Chinese exports jumped, year on year, by 9.1% over the month of January when they had decreased by 4.4% in December 2018.

In the first month of the year, imports would have continued to contract (-1.5% in value) but at a slower pace than that recorded a month earlier (-7.6%), says the Administration. General Customs.

Rather surprised by the dynamism of the flows announced by Beijing, economists, who anticipated much lower volumes, believe that January exports were probably boosted by orders for shipments before the long New Year holidays, started last week in China. Many factories also reportedly accelerated their exports before the expiry of the ceasefire on 1 March in the trade dispute between Washington and Beijing.


This date continues to obsess all economic players in the region who hope that the US and Chinese governments will quickly reach a compromise to avoid the rise, early next month, 10 to 25% US tariffs on Chinese products, representing $ 200 billion in annual imports.

Sent to Beijing, US Treasury Secretary Steven Mnuchin, and Trade Representative Robert Lighthizer, have also resumed this morning, their dealings with the Chinese authorities with the hope of reaching an agreement in all next days.

Yann Rousseau

Correspondent in Tokyo


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