tv Business Deutsche Welle July 15, 2019 3:45pm-4:01pm CEST
navigation system galileo set up as an outage the network's been down since friday . and painful lesson business china's economy keeps cooling. demand at home and abroad continues to fall to the latest quarterly results are in line with expectations they show state support is finally kicking in but that most stimulus will be needed as china's trade conflict with the united states rages on. in the past 3 decades the chinese economy has undergone an extraordinary transformation developing from an inward looking agrarian based society to a major industrial powerhouse growth has been rapid for years double digits were the norm now the pace of expansion is slowing down in the last quarter of g.d.p. rose by 6.2 percent solid by many standards but for china the worst performance since the early 1990 s. the government's been keen to offer reassurance but doesn't deny there are problems
from. from one year and generally speaking economic performance in the 1st half of the year was within a reasonable range and has sustained momentum and overall stability. however we should also be aware that the economic conditions are still severe both at home and abroad global economic growth is slowing down the external instability and uncertainty are increasing the unbalanced and in adequate development at home is still accused the economy is under a new downward pressure. much of that downward pressure is a result of the country's ongoing trade dispute with the united states which has seen the introduction of hundreds of billions of dollars in punishing tariffs. but there are home grown problems to for years chinese companies have taken advantage of largely unregulated lending leading to warnings of an impending debt crisis. to
that we can in global demand don't you have a cocktail for a further slowdown in the future a source of concern far beyond beijing this year's size of the country's economy now means what happens to china happens to the world. from the institute for china studies here in berlin but 1st of all it. is the data in your view good or bad i think it's line with expectations most analysts have predicted something like 6.2 growth which is what we got 6.3 for the whole quarter and this is in line with a longer term slowdown that china has been experiencing within the state growth targets of 6 to 6.5 percent how much can you blame those results on a trade war that well exports has fallen a little bit potentially because of the trade war but at the same time imports have been falling at a faster pace than exports and because of the way g.d.p. is calculated deception means that the net export component of g.d.p.
has been holding up quite well actually what's knocking off the most percentage point from growth is actually final consumption expenditure how much more can china take that if this trade war goes on and if this trade war escalates well i think china can has still has some reserves they have a large. a very large portfolio of foreign reserves the central banks in the country have a reserve requirements of around 10 percent which means that there is room to lower more inflation is at a very low it's at a reasonably low level so the central bank still has and the mission to push money into the market if needed so i think they can hold on for quite a bit longer if you reckon that this slowdown in the economy is going to continue right i would say so and it's china's been undergoing a trending slowdown for a very long time and of course as china becomes more advanced country its growth is going to become closer to other advanced countries so this is something that is hard to stop but what foots the question is how these near term events are going to
affect the the trending growth is going to go up a little bit down a little bit but what you don't think we could see a rebound later in the year as far as china data goes if if the trade war doesn't escalate well any rebound will be in the decimal point so it's the china's long term trajectory is definitely downwards but you could see a 0 point one percent 0.2 percent rebound and as i said they do have dare are. the government is trying to launch stimulus packages and so on they want to get the growth up to the growth targets and i think fully expect us to see china reached a growth target this year do you reckon china has a much better case though all of improving its economic outlook if it starts opening up to the world more and more yes that's many people say that but the question is if this could cause instability which is something the government's always worried about so china has taken several steps to open capital markets and so on but most of these efforts are made in such
a way that more money flows into the country than out and something they're particularly worried about is large scale outflow which could happen if china became and more open country became us back to you in a 2nd we have craig bellamy now on the line from london who's a market analyst there craig what do you think lies ahead for the chinese economy we're just talking about whether or not to expect a rebound later in the year whether or not this trade war is going to flare up how do you think things are going to play out based on today's economic data. well i think in many ways that's going to depend on what kind of monetary and fiscal stimulus that we see as a result of the white of the economies performed in the 1st half of the year i think it's important to note that yes while we are seeing the slowest level of growth in 27 years in china this is being part of a decline that's been happening for some time and actually the extent to which we've seen it drop from around 6 and a half to $6.00 isn't that extreme actually growth of the whole is around $6.00 so
we could actually see with a little bit of stimulus towards in the 2nd half of the year we could actually see the perform a little bit better again and all of a sudden the trajectory that the cline is in to extortion it's and again it also depends on how much more this trade war those escalates if we continue to see targets being imposed and naturally it is going to have significant implications but again it's then down to the policymakers to decide what type of response that needs and how necessary it is i think what was interesting in the data today was there was a couple of post points the retail sales figure was strong and we know how much more the chinese economy is going to be dependent on the consumer so we can look at that and say that's a positive in production exceeded expectations as well the more thing we have to be wary about though is not to read too much into single data points because in fact if you look at the trend these all run up to a bit of an outlier from the last few months if we can start to see it build momentum on top of that and that's a sign of things to call the not says that gives us a cause for optimism for the 2nd half of the year but if it turns out to be
a blip maybe policymakers will need to be more active so you both agree that the trend is down woods but craig let me just ask you briefly does china's mix of communism and capitalism actually have a future. well i think i guess we're going to be judging that in the years to come it's hard to say right now because for one we don't always know just how reliable the chinese economic data is we've been saying it for songs on what we've been saying for some time that people have been raising significant questions based on the in the cases as to just how reliable particular the growth figures are but also the import export numbers in many cases as well so i think in the years there will be looking back on the chinese model and seeing if it is a sustainable model and if it's actually just sowing the seeds of effectively for a future crisis we have to remember that in the past whenever we've seen the kind of credit growth that we've seen in china over the past couple of decades it does tend to work and in about why so the question is going to be not necessarily is
credit growth bad but it can't be money following a sustained expansion in such a way that it doesn't and think it's not that's really going to be the final judgment on just how how important and how positive such a strong government will have in the economy tax do you agree yes pretty much. he out he highlights credit growth as a very serious moment i completely agree and we've seen some signs of shakiness it has been it was a very serious something that really stands out was the default of the bank which the government then to go over this sends a signal i think to the whole market to. credit the quality of credits might not be at the level that people previously expected and i think d.c.'s financial problems this is going to be something that will definitely weigh heavy on the economy coming up to me and can further thank you very much for the mogador institute for china studies and craig go in there at a wonder for us in london thank you. well south koreans are calling for
a boycott of japanese goods dozens of small business owners have rallied in seoul thousands have signed online petitions they want recently tightened controls on high tech imports lifted south korea's president says they threaten to shatter relations and could damage japan more than south korea don't worry japanese brands don't buy japanese beer or cards that's what dozens of south korean small business owners are urging their fellow countrymen to do until tokyo withdraws its trade curbs earlier this month japan imposed restrictions on exporting goods that south korean high tech companies like samsung need to produce t.v. and smartphone displays as well as semiconductors. we will continue our consumption and distribution boycott of japanese products until the japanese government and ave administration make an apology and withdraw the export
restrictions. japan's trade curves are seen here as retaliation for recent south korean court rulings ordering japanese companies to compensate aging korean victims of forced labor during world war 2 japan whoever believes it settle the issue of compensation decades ago in an agreement that normalized relations between the countries the korean trade ministry said they'll make the trade curbs an issue at the upcoming w t o's summit on july 23rd south korea's president moon called on japan to return to the negotiating table and he has a warning. rebuke to our companies will free themselves from reliance on japanese materials components and equipment by diversifying imports they'll also try to produce the technologies at home it'll be the japanese economy that suffers most. observers say it won't be easy resolving this conflict between the 2 countries because it revives memories of past injustices. and just briefly before we go the
european space agency says its galileo satellite network is offline the system is designed to be an alternative to the united states g.p.s. navigation network galileo has been down since friday officials blame the outage on a technical incident and its ground based equipment but they haven't given any more details on what caused the breakdown and there is also no word of when the service will be back on line. by saying business with you.
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do it yourself networkers. subscribing and don't miss out. on. this is the news live from berlin the woman who could lead the european union's powerful executive body germany's ursula on the line is in the final phase of her campaign to become the 1st female head of the european commission also coming up. catastrophic flooding across south asia scores have been killed millions of people