UBS cuts China GDP growth forecast

UBS Group AG has cut its forecast for China’s GDP growth from 6.2 percent to 6 percent for next year after the US announced an extra 10 percent tariff on US$200 billion of Chinese goods.

The escalating trade war is unfavorable to Taiwan as China is its biggest export destination, accounting for 41 percent of its outbound shipments last month, when they increased slightly by 1.9 percent from a year earlier, the Ministry of Finance said, adding that exports might contract this month as sentiment weakens despite the advent of the high sales season.

“We estimate that additional tariffs of 25 percent on US$50 billion plus 10 percent on US$200 billion of Chinese exports will have a 0.5 percentage point drag on Chinese GDP growth in the following 12 months,” the Swiss company said.