The escalating trade war between the US and China is nudging the world economy toward its first recession in a decade with investors demanding politicians and central bankers act fast to change course.

Official economic numbers are famously rubbery. China’s exports to Hong Kong in December rose 30% from the previous month and overtook shipments to the US and the European Union, according to customs data released earlier this week which economists put down to fake invoicing by mainland businesses trying to evade currency restrictions.

China's leadership today called for tighter control over bank lending and other spending next year, a shift in strategy as Beijing fights inflation and tries to guide rapid growth to a sustainable level.