Jeffrey D. Saut, Chief Investment Strategist

With the first tranche of U.S. trade tariffs now in effect we were intrigued by this most interesting white paper from Andy Rothman, investment strategist for Matthews Asia (read it here: Trade). One of the paragraphs read:

The Chinese economy is no longer export-driven. Net exports (the value of a country's exports minus the value of its imports) account for only 2% of China's GDP, down from a peak of 9% in 2007. In contrast, domestic consumption now accounts for the majority of China's economic growth and more than half of its GDP. 2017 was the sixth consecutive year in which the consumption and services share of China's GDP was larger than the manufacturing and construction share. Because Trump would be fighting a trade war without the support of America's allies, the impact on China's exports would be relatively small. Last year, Chinese exports to the U.S. accounted for only 19% of total Chinese exports.

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