Economics: Why China Is Becoming Less Vulnerable

 (Drivebycuriosity) - This weekend we got fresh news from China`s economic front. The purchasing manager indexes (PMIs), polls which capture the status quo of an industry, showed that China`s manufacturing service slowed again but that the service sector got a bit more speed. The Purchasing Manager Index (PMI) for manufacturing dropped in August to 49.5 (July 49.7), but the PMI for services advanced to 53.8 (July 53.7). The numbers indicate that China´s manufacturing is still shrinking, but that the service sector is growing faster (china). 

These data may be a response to the ongoing trade war but they also show that China`s transformation process is going on. Beijing wants to transform the country from an industrial & export-focused economy into a modern system like the US, where most of the GNP is fueled by consumer spending. China`s service sector, which accounts for half of her economy, is growing faster than manufacturing and is taking so the leading role for China`s economic growth. The growing service sector is reducing China´s dependency from exports and global markets and is also making the country less vulnerable to Trump`s trade war.