WHY IS CHINA EXPORT GROWTH SLOWING DOWN

In 2007, purchase power parity was stronger in India and China; therefore, they contribute more to global growth than the United Kingdom, Japan and the U.S. In 2018, China consumers are beginning to consume and invest. In the past, sovereign wealth funds have helped emerging markets grow. China is helping grow emerging markets. As more emerging markets come online, the global economy grows. Over time, the emerging markets will shift from exports to consumables. Trump's tariffs on Chinese steel and aluminum will slow emerging market growth. Trump's duties were 25-percent on steel and 10-percent on aluminum. Countries most affected by the import tariff are Brazil, South Korea and China. South Korea is the third largest exporter of steel to the U.S. China exports aluminum to the U.S. increased exports. In 2016, a dollar bought 6.5 yuan; however, the purchase power parity (PPP) was 5.7 RMB per dollar. The dollar was stronger against the yuan but bought less goods and services in China because of PPP. The Rembmini was 14-percent undervalued. The yuan appreciated 36% from 2005 to 2015. Chinese imports were becoming more expensive. Manufacturers began relocating from China to Vietnam, Indonesia and Africa. President Trump said a 45-percent tariff on Chinese imports would be necessary to stop this unfair trade practice. China said it would not engage in significant exchange rate reforms. Trump does not like China's strong intervention in the currency markets and China's growing trade surplus. China is fighting its label as a currency manipulator. The loss of factories and jobs to foreign competition is a big concern.