Economists Predict China’s Resilience Amid U.S.-China Trade War
Economists are optimistic about China’s resilience amid the escalating U.S.-China trade war. They expect that strategic policy measures, supply chain adjustments, and strengthened global partnerships will help cushion the Chinese economy. Key figures indicate that China is diversifying its markets and providing support to affected sectors, with opportunities arising from the Belt and Road Initiative to foster deeper ties with other nations.
As the trade war between the United States and China escalates, economists predict that China’s resilience will emerge through various policy adaptations, supply chain modifications, and enhanced global partnerships. Domestic economists in China believe these measures will help shield the world’s second-largest economy from the adverse effects of tariffs introduced under U.S. President Donald Trump’s administration.
Zong Liang, Chief Economist at the Bank of China, highlighted, “We (China) have taken proactive steps to mitigate the impact of the trade war,” emphasizing that China is enhancing business easements for other countries and solidifying trade relations beyond the United States. Following the implementation of U.S. tariffs, Beijing promptly enacted retaliatory measures, introducing tariffs on select U.S. products, including energy and automobiles.
Despite facing these challenges, China’s share of global exports has shown remarkable stability. Zong anticipates that 2021 will see the implementation of bolder fiscal policies and further initiatives designed to bolster domestic consumption. Alex Hongcai Xu, Deputy Director at the China Association for Policy Sciences, noted that Chinese enterprises are diversifying their export markets and securing foreign investment, which are strategies poised to alleviate trade-related challenges.
In a bid to protect key sectors from the impact of tariffs, Xu foresees the Chinese government providing financial aid and tax concessions to affected agricultural and manufacturing industries. Furthermore, both economists point to the trade war’s potential to foster stronger connections between China and Southeast Asian countries, the European Union, and other nations facing tariffs, particularly through the Belt and Road Initiative (BRI).
Kishore Mahbubani, a distinguished fellow at the National University of Singapore, asserted that the BRI is likely to gain traction as numerous countries seek alternatives following the reduction of U.S. foreign aid. As President Trump has curbed most U.S. government aid and sought to reduce Federal expenditures, Mahbubani noted, “There are very few countries that can be as generous as the U.S. at that scale … and, that is China.”
In conclusion, as the U.S.-China trade war escalates, China’s ability to adapt through strategic policies and international partnerships will be crucial for its economic resilience. Economists foresee a diversification of trade markets, increased governmental support for impacted sectors, and a strengthening of ties with other countries. The BRI is poised to be a significant avenue for fostering new relationships amid shifting global dynamics.
Original Source: www.tradingview.com
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