The survey data suggests China is struggling: the NBS PMIs were poor for October across manufacturing and non-manufacturing.
It is easy to see that a combination of trade fights and deleveraging has hobbled China’s more immediate growth prospects. Samsung, for example, has moved all its smartphone production out of China, to India and Vietnam. Both Samsung and Apple have enjoyed stronger iPhone sales due to the clampdown on Huawei.
However, it is important not to lose sight of the bigger trends. Apple is launching new 5G phones next year, and China will benefit from higher equipment sales. China is leading the all-important race in 5G. But Apple’s decision to back 5G will act as an important catalyst for growth. Adoption of 5G will provide an important stimulus for the global economy in 2020.
The Trump administration has continued to make life difficult for China’s leading smartphone manufacturer, Huawei. This has not stopped Huawei from trying to forge critical alliances with governments in other countries, to “develop new codes of conduct, standards, and laws specific to AI”. This will underpin the development of 5G in China, and globally.
