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November 14, 2019 @ 12:01 +03:00
The soft data underscored the need for a Phase-one trade deal with the U.S. to put a floor under business confidence. Even as the economy has lost steam, the government and central bank have refrained from dumping stimulus into the economy, preferring to make smaller adjustments to try and boost growth without a massive expansion in debt. “Momentum for slowdown is not yet over,” said Julia Wang, an economist at HSBC Holdings Plc. in Hong Kong. “Given the slowdown is so sharp, it is going to impact maybe the labor market at some point next year, and you are going to see further weakness in domestic demand.”
Many Asian stock markets fell to session lows after the readings. Yet, the yuan remains slightly stronger for the day and government bonds have shed some of this week’s gain. China’s Ministry of Commerce spokesman Gao Feng on Thursday said removing existing tariffs is an important condition for any deal and that China is willing to address core concerns with the U.S. to create conditions for reaching a phase-one deal.
Chinese and some U.S. officials last week said they agreed to roll back some tariffs if there is a phase-one deal. But the optimism was quickly damped as President Donald Trump said that he hasn’t agreed to anything. The trade war has lasted more than a year and hurt the global economy. Any re-escalation would further hit investor sentiment.