China’s fragile trade economy could be at risk, as EU outlook goes from bad to worse

03/26/2019

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Keegan Elmer and Karen Yeung | South China Morning Post

  • Existing concerns that Europe was on the verge of a recession were stoked on Friday by new data which shows the bloc’s manufacturing sector is struggling
  • China is the EU’s biggest source of imports and its second-biggest export market. China and Europe trade on average over €1 billion a day

A recession in Europe would hit demand for Chinese exports and could lead to a further narrowing of China’s trade balance, analysts have said.

Existing concerns that Europe was on the verge of a recession were stoked on Friday by new data which shows the bloc’s manufacturing sector is struggling.

The euro zone purchasing managers index (PMI) showed that manufacturing contracted in March, at a rate not seen in nearly six years. Along with the already weak performances of major European economies and uncertainties over the impact of Brexit and the US-China trade war, the data added to concerns that Europe is headed for a downturn later this year or early in 2020.

[Read more here.]