The overall economic environment in China does not look stable.
Our outlook for 2020 continues to deteriorate. We believe political risk presents a significant challenge as Chinese president Xi Jinping continues to consolidate his grip over an increasingly totalitarian Chinese state.
Hong Kong retail sector struggles
Struggles in Hong Kong’s retail sector are set to continue as prolonged protests impact tourism and local spending. This weakening comes at a time when momentum was already weak from China’s slowdown and trade war.
Retail sales have declined 23% year on year in August after the consensus was for a 14% drop.
Early indicators point to waning economic momentum in China.
According to Bloomberg Economics, “a range of early indicators continued to point to a lack of momentum in China’s economy in September, as the U.S. imposed additional tariffs on about $110 billion of Chinese imports.”
Furthermore, business surveys how continued weakness, particularly in SMEs.