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Business Times
19-05-2025
- Business
- Business Times
Investment banks raise China's GDP forecast after tariff pause
[SHANGAHI] Global investment banks are raising their forecasts for China's economic growth this year, after Beijing and Washington agreed to a 90-day pause on tariffs, despite uncertainty around Sino-US trade negotiations. The deal reached between the US and China after bilateral talks in Geneva last weekend surpassed market expectations, as both sides agreed to significantly roll back most of the tariffs imposed on each other's goods since early April. The latest upgrade represents the third major revision by some banks in the past few months, largely due to rapidly evolving US trade policy under President Donald Trump and its impact on the world's second-largest economy. In mid-April, seven investment banks had downgraded their gross domestic product (GDP) forecasts for China to an average of about 4 per cent this year, compared to their previous predictions of 4.5 per cent. China's official target for full-year GDP is around 5 per cent. Here is a summary of some forecasts for China's GDP (new (previous)): CITI (2025: 4.7% (4.2%)) 'With trade tensions defused and domestic economy holding up well so far, we believe potential stimulus could be put on hold now. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'We no longer expect any revision to the fiscal budget or government bond quota approved by the National People's Congress (NPC) for this year. If more support is warranted later, it is likely to come from policy banks or other quasi-fiscal tools, considering the PSL (pledged supplementary lending) rate was just cut.' UBS (2025: 4% (3.4%)) 'Lingering uncertainties may continue to weigh on corporate confidence, delay domestic capex plans, and lead to further supply chain shift outside of China. 'Front-loading of export shipments to the US may continue in the 90-day pause period, which may push up China's export growth in the near term but lead to a negative payback later this year.' Goldman Sachs (2025: 4.6% (4 %)), (2026: 3.8% (3.5%)) 'With the resumption of US-China trade talks, the left-tail risk of miscalculation between the US and China could be more contained vs. before, in our view. 'However, given still-elevated uncertainties around US-China relations, the private sector sentiment may remain fragile, and macro data could be volatile in coming months.' Commerzbank (2025: 4% (3.8%)) 'Beyond the 90-day period, it is too early to tell whether the truce will continue, and what the tariff rates will be. We also have doubts about the expansion in consumption despite Beijing's policy easing measures. 'Also, it is still unclear how the high-level plans on boosting household spending and income and supporting the service sector are being implemented at the local level. We therefore expect growth in H2 will be under pressure.' Societe Generale (2025: 4.6% (4%)), (2026: 4.2% (4%)) 'Probable export frontloading during the 90-day US-China tariff truce suggests we may not see sizeable weakening in overall economic momentum until mid-3Q. Therefore, Beijing will likely continue to withhold any significant increase in stimulus in the short term. 'There is a constant choice between maintaining economic stability and preserving policy room for worse outcomes, as the prospects of US-China negotiations remain uncertain. 'In terms of monetary policy, we are scaling back our easing calls to a 20-basis-point (bp) policy rate cut and a 50 bps reserve requirement ratio (RRR) cut by year-end, down from 40 bps and 100 bps previously.' Nomura (2025: 4.5% (4.0%)) 'The substantial tariff reduction will support a resumption of trade flows between the US and China, although its impact should not be overstated, as the remaining 30 per cent tariff could still depress exports of certain products, especially with the US economy slowing. 'The resumption of US-bound shipments will naturally reduce the need to re-route shipments. Front-loading will be inevitably followed by a significant payback effect after the 90-day pause ends on Aug 12. 'We still believe it will be quite challenging for Beijing to achieve its 'around 5 per cent' growth target unless it rolls out a sizable stimulus package. Considering the respite on the trade war, Beijing might be under less pressure to introduce the necessary stimulus and reforms.' REUTERS
Time of India
18-05-2025
- Business
- Time of India
Garment import curbs likely to make Bangladesh exports to India costlier: Textile industry
India's decision to allow entry of ready-made garments from Bangladesh only through Kolkata and Nhava Sheva sea ports is likely to increase the cost of apparel imports from the neighbouring nation, textile industry bodies said on Sunday. They also termed the move a timely step towards preventing the dumping of foreign-made garments and strengthening India's self-reliance in apparel production. India on Saturday decided to allow entry of ready-made garments from Bangladesh only through Kolkata and Nhava Sheva sea ports and barred imports of a range of consumer items through land transit posts in the northeast -- a move that is set to significantly hit Dhaka's trade with New Delhi. Besides ready-made garments (RMG), plastics, wooden furniture, carbonated drinks, processed food items, fruit flavoured drinks, cotton and cotton yard waste will not be allowed to enter India through land customs stations and check posts in Meghalaya, Assam, Tripura and Mizoram, and Phulbari and Changrabandha in West Bengal, according to a government notification. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas Prices In Dubai Might Be More Affordable Than You Think Villas In Dubai | Search Ads Get Quote Undo The new restrictions for Bangladeshi consumer goods came five weeks after New Delhi ended a nearly five-year-old arrangement for trans-shipment of Bangladeshi export cargo to third countries via Indian airports and ports. As per the trade data, India imported RMG worth USD 634 million in 2024, which has increased at a CAGR of 19 per cent during the last 10 years. Live Events Majority of these imports were taking place through land route only and hence this restriction is likely to have a considerable impact on these RMG imports. Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry ( CITI ), stated, "In April 2025, Bangladesh imposed a restriction on the export of cotton yarn from India, which traditionally accounts for nearly 45 per cent of India's total cotton yarn exports. The latest move by the Government of India is seen as a strong and strategic response to this unilateral trade restriction by Bangladesh." He further highlighted that this decision is likely to increase cost of imports of Bangladesh garments and create new opportunities for domestic RMG manufacturers, while also enabling Indian cotton yarn exporters to redirect their supply to the domestic market to meet the potential demand gap created. Santosh Katariya, President, Clothing Manufacturers Association of India (CMAI), said the move addresses the industry's long-standing concern regarding the unchecked inflow of low-cost apparel into the Indian retail market, which was adversely impacting domestic manufacturers, particularly MSMEs. "The decision is a timely step towards preventing the dumping of foreign-made garments and strengthening India's self-reliance in apparel production. At the same time, we believe this policy must be complemented with continued support for capacity building and ease of doing business for Indian manufacturers," he added.
Hans India
18-05-2025
- Business
- Hans India
Restrictions on Bangladesh RMG imports to empower Indian manufacturers: CITI
The move by the government to restrict all type of readymade garments (RMG) from Bangladesh through land ports is going to increase cost of imports of Bangladesh garments and create new opportunities for domestic RMG manufacturers, the Confederation of Indian Textile Industry (CITI) said on Sunday. In a recent notification issued by the office of the Director General of Foreign Trade (DGFT), India has suspended imports of all types of readymade garments from Bangladesh through land ports. As per the trade data, India imported RMG worth $634 million in 2024, which has increased at a CAGR of 19 per cent during the last 10 years. Majority of these imports were taking place through land route only and hence, this restriction is likely to have a considerable impact on these RMG imports, according to the confederation. "In April 2025, Bangladesh imposed a restriction on the export of cotton yarn from India, which traditionally accounts for nearly 45 per cent of India's total cotton yarn exports. The latest move by the Government of India is seen as a strong and strategic response to this unilateral trade restriction by Bangladesh," said Rakesh Mehra, Chairman, CITI. Mehra further highlighted that this decision is likely to increase the cost of imports of Bangladesh garments and create new opportunities for domestic RMG manufacturers, while also enabling Indian cotton yarn exporters to redirect their supply to the domestic market to meet the potential demand gap created. "This could provide a much-needed boost to the Indian textile value chain by encouraging local sourcing and strengthening self-reliance in the apparel segment," he added. In a significant trade policy shift, India on Saturday restricted the import of RMG, processed food and other items from Bangladesh to India via land ports, effective immediately. However, such said port restriction will not apply to Bangladesh goods transiting through India but destined for Nepal and Bhutan, the DGFT said in its notification.
Reuters
15-04-2025
- Business
- Reuters
Global banks cut China growth forecasts as trade war deepens
SHANGHAI, April 15 (Reuters) - Global investment banks are lowering their projections for China's economic growth this year as U.S. President Donald Trump's aggressive tariffs are expected to take a toll on the world's second-largest economy. Some of the banks had upgraded their forecasts for China just a month ago, encouraged by signs of improvement in the sputtering economy in the first two months of the year. Sino-U.S. trade tensions have intensified after Trump announced reciprocal tariffs on April 2, leading to tit-for-tat duties on each other's goods. By April 11, China was all but under a U.S. trade embargo as tariffs rose to 145%. Gross domestic product growth in the first quarter is forecast at 5.1% year-on-year, while full-year expansion is predicted to hit 4.5% in 2025, compared with last year's 5.0% pace, according to a Reuters poll, falling short of the official target of around 5.0%. China is due to release its first-quarter GDP data and activity indicators on Wednesday. Here is a summary of some forecasts for the China's GDP. ** In the previous factbox, some of the institutions raised their GDP forecast for this year following some early signs of economic recovery. KEY QUOTES: ** UBS "Under our current new baseline assumptions, we estimate tariff hikes this year to pose a more than two-percentage-point drag on China's GDP growth. We expect China's exports to the U.S. to fall by 2/3 in the coming quarters and its overall exports to fall by 10% in USD terms in 2025, the latter also takes into account slower U.S. and global growth. While tariff exemptions will likely reduce the inflationary pressure somewhat in the U.S., we expect they are unlikely to affect importers' desire to find alternatives to imports from China. Therefore, we expect continued negative impact of the tariff hikes on China's exports in 2026." ** CITI "We see little scope for a deal between the U.S. and China after recent escalations. Domestic policies could focus more on demand expansion. We expect additional funding of 1 to 1.5 trillion yuan ($205 billion) while policy implementation accelerates. The People's Bank of China (PBOC) could cut policy rates by 40 basis points and reserve requirement ratio (RRR) by 100 basis points. Policy constraints such as the exchange rate and debt management could stay, however. With prolonged elevated uncertainties, policymakers could choose to keep more powder dry." ** GOLDMAN SACHS "Recent events have underscored the speed with which President Trump can alter tariff rates, while also highlighting the likelihood that high tariffs on Chinese goods will persist. We estimate that 10 to 20 million workers in China may be exposed to U.S.-bound exports. The combination of extremely high U.S. tariffs, sharply declining exports to the U.S., and a slowing global economy is expected to generate substantial pressures on the Chinese economy and labor market." ($1 = 7.3052 Chinese yuan renminbi)
