US-China trade talks start amid sniffles from China's economy - Quartz
Qz.com - Mon 7 Jan 17:21 GMT

US-China trade talks start amid sniffles from China's economy - Quartz

China's looming economic problems are much more serious than just the current tariff war with the US.

  As China and the US prepared for the start of two days of trade talks in Beijing today (Jan. 7), a White House adviser warned other US companies with sales in China could, like Apple, soon feel some pain.

  “There are a heck of a lot of US companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China,” Hassett told CNN after Apple last week revised its holiday quarter earnings guidance substantially, blaming a slowdown in China.

  Apple’s revision came after a slew of economic indicators showed that China’s economy experienced a substantial slowdown in 2018, particularly after the US imposed tariffs on $50 billion in Chinese goods in July, setting off tit-for-tat rounds of escalating duties.

  Consumption, which China hopes will become the key driver of its growth, has also showed signs of sputtering—this week, the country is expected to post its first annual decline in car sales since 1990 (electric cars are doing well, but make up a small share of the market).

  The US might be pretty well placed going into these talks—in recent weeks China cut tariffs on US car imports and in a New Year’s Day speech, president Xi Jinping signaled to Trump that China was seeking “cooperation” and “consensus”—but that doesn’t mean Trump’s trade strategy should get the credit.