Trump is destroying China’s economy

A year into the trade war with Washington, more than 50 global companies, including Apple and Nintendo, have announced or are considering plans to move production out of China, Nikkei research has found.

And not just foreign companies. Chinese manufacturers, as well as those from the U.S., Japan and Taiwan, are part of the drain, including makers of personal computers, smartphones and other electronics.

Concern over the situation is growing among political leaders. China's State Council decided in May to set up a group to lead employment measures and plans to bolster job training programs using surplus funds from state insurance schemes.

The trade dispute is beginning to show up in flows of goods and capital. In the first five months of the year, exports from China to the U.S. fell 12% on the year in value terms, while those from India, Vietnam and Taiwan logged double-digit gains. Exports aimed at bypassing U.S. tariffs by disguising the origin of products may also be increasing.

Many companies, alarmed by the prospect of a prolonged trade conflict, are hedging their bets. While looking for alternative production sites for U.S.-bound goods, many will keep factories operating in China for the domestic Chinese market. Thus, many manufacturers will be forced to set up dual supply chains: one for China and one for other markets, raising their costs and denting profits.

"The possibility of the world market dividing into China and non-China is growing," said Yuji Miura, a senior economist at the Japan Research Institute. "Decoupling" -- that is an unwinding of economic ties between the U.S. and China and a division of the world economy into hostile blocs -- is a real possibility.


Having a China and Non China world Market would probably be the equivalent of winning WW3 without firing a single bullet

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