The primary reason for the country’s slowdown in Q3 was a collapse in internal consumer demand, according to the report.
Even with higher tariffs imposed by the US, trade hasn’t been a major headwind for the country’s economy, the report notes.
However, if trade negotitions between the two countries breaks down again, the average US tariff on Chinese imports would serve to more than 20% by early 2020, compared with 12% in Q3, Morningstar said.
In addition, the US wasn’t the only country that imported less from China. According to Morningstar, other major trading partners also bought less from China, the company added.
China shouldn’t expect huge gains from trade with countries outside the US, Morningstar noted, adding that it expects further easing from China via reserve requirement ratio cut or medium-term lending facility rate cut in the near term.