by BEIJING, China – Factory orders in China have declined for the fourth consecutive month.
The Purchasing Managers’ Index (PMI) dipped to 49.5 in August, China’s National Bureau of Statistics said in a statement released on Saturday.
The July figure had been recorded at 49.7.
Analysts had been expecting no change.
The deterioration in manufacturing in China is largely being attributed to the imposition of hundreds of billions of dollars in tariffs b y the United States, and the ongoing trade dispute which has created considerable economic uncertainty in both countries.
August also saw export orders fall for the fifteen month in a row.
“Frontloading of exports to the U.S. ahead of higher tariffs supported trade and overall activity growth, but this effect will likely fade in the next few months,” analysts at Goldman Sachs said in a note carried by the Reuters Thomson news agency.
The employment sub-index also fell, registering at 46.9, compared to July’s 47.1.
U.S. President Donald Trump appeared to be gloating about the decline in China’s fortunes when he spoke to reporters on Friday. He said the tariffs were having a major impact on the Chinese economy, with the country having to pay tens fo billions of dollars in tariffs, and having to devalue its currency.
He also made the extraordinary claim that the dispute was forcing 13% of companies to leave China, a number he said he was not surprised at, and believes it will grow.
Asked if the tariffs he announced two weeks ago would still start as scheduled on Sunday, 1 September, the president replied: “No, they’re on. They’re on. We’ve taken in billions and billions of dollars from those tariffs. And as it’s starting to come out, if you look at the Chinese government, China, what they’ve done with tariffs is very interesting. They’ve devalued their currency so much, which hurts them ultimately. It costs them much more to buy things outside of China.”
“But they’ve devalued so much. It’s a bad situation they’ve put themselves in. And I just saw, it came over the wires, that 13 percent of certain companies are going to be leaving China in the not-too-distant future. That’s a big thing. Thirteen percent of companies will be leaving China in the fairly near future. And I’m not surprised to hear that. I think it’s going to be much higher. Because they cannot compete with the tariffs. They can’t compete,” the U.S. president said.
“So they’ve devalued their currency, they’re pumping money in. And we’re not paying much more. Now, let me tell you, we’ve taken in tens of billions of dollars. I gave the farmers $16 billion, which makes them totally whole on China. That’s what China spends in a good year. I gave, given the farmers, because they were targeted. The farmers were targeted by China.”
“So, out of the tariffs, which are much more than $16 billion by a factor of a lot, I’ve given the farmers $16 billion. And the farmers are very happy. And they want me to continue this fight. They want me to win the fight. And we’re going to win the fight,” said Trump.
“We’re having conversations with China. Meetings are scheduled. Calls are being made I guess the meeting in September continues to be on. It hasn’t been cancelled. And we’ll see what happens.”
“They are having the worst year they’ve had, I understand, in 61 years. That’s a lot of years,” said the president.
