Zhengzhou factories suffer as US/China trade rhetoric ramps up

Credit: Reuters Studio
Published on May 17, 2019 - Duration: 02:00s

Zhengzhou factories suffer as US/China trade rhetoric ramps up

As China ramps up the trade battle rhetoric, businesses in the import/export hub of Zhengzhou are feeling the pain of ongoing tensions with the U.S. - where, as Pascale Davies reports, the likelihood of recession on the back of the dispute has increased, according to a new Reuters poll.

Pascale Davies reports.


Zhengzhou factories suffer as US/China trade rhetoric ramps up

It was once China's major air transportation hub, sending countless goods in all directions, but faced with a trade war with the U.S. and a slowing economy- Factories in the provincial capital Zhengzhou are gathering dust.

(SOUNDBITE) (Mandarin) MANAGER AT THE ZHENGZHOU AIRPORT BRANCH OF SHANGHAI AIRSEA TRANSPORT, GUO LIMIN, SAYING: " We had over 20 flights of fruit, like cherries, an estimated 1,000-2,000 tonnes of fruits didn't come in in.

And so we made some changes, we imported the cherries and blueberries from Canada instead." Tariff hikes on Chinese goods have pushed the trading company to cut business with low-performing firms affected by the trade dispute It's focusing instead on clean energy and services industries- rather than iPhones, cars, and frozen foods.

That as data this week showed customers were keeping their wallets shut - with consumer sentiment at its lowest in a decade.

China ramped up its rhetoric on Friday - evoking a spirit of past wars in the Communist Party's People's Daily, which said the trade conflict would only make China stronger But a message from the Foreign Ministry appeared more calm.

(SOUNDBITE) (Mandarin) CHINESE FOREIGN MINISTRY SPOKESMAN, LU KANG, SAYING: "In principle, China always encourages resolving disputes between the two countries via dialogue and consultations, whether trade disputes or other disputes." China has said it would retaliate to the latest U.S. tariff hike on its goods, but has not specified how.

And while President Donald Trump has downplayed the tensions as a quote "little squabble," data on released by Reuters on Friday showed he may have more cause for concern.

A poll of economists now rate the chance of a U.S. recession in the next two year at 40% - because of the trade dispute That's up from a median 35% in last month's poll.

And could as Fed officials said this week, require their response.


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