Public confident in Chinese economy amid trade war

Source:Global Times Published: 2018/9/27 22:38:40

Illustration: Luo Xuan/GT

The trade row between the US and China escalated as the Trump administration imposed new 10 percent tariffs on $200 billion of Chinese imports, effective Monday. From the new year, this round of US tariffs will be increased to 25 percent.

For months, US President Donald Trump has been threatening to impose tariffs again and again, to force China to surrender to the unfair trade demands of the US. The US-China trade war is now generally expected to be a long, arduous fight.

The question then naturally follows as to how ordinary Chinese view US tariffs and whether their daily life is affected by the trade war or not. To some extent, the impact of the trade war on ordinary people reflects how China overall is affected.

Based on this consideration, we decided to conduct a survey of the public view of the trade war. After collecting nearly 1,500 valid questionnaires from respondents from 31 provincial-level regions in the Chinese mainland and Hong Kong, Macao and Taiwan, we had several findings.

First, the impact of the trade battle on Chinese people is limited as 1,065 respondents said the US-China trade war has had no impact on their daily life over the past four months, accounting for 72.5 percent. Only 404 people, 27.5 percent of the respondents, said "yes." Many of those cited stock market losses as the main reason for their choice. This isn't surprising, considering that people tend to make financial investments as their disposable capital increases, and the low threshold of the secondary market makes it the first choice for many. Feeling an impact from the stock market also reflects the growing "financial investment awareness" among ordinary people.

Second, confidence is earned, not given. About 82.2 percent of the respondents, or 1,207, said "yes" when asked if they were confident of stable living conditions amid the trade war. Only 17.8 percent, or 262, said they had no such confidence.

Their confidence is rational. According to the National Bureau of Statistics(NBS), consumer prices rose only 2 percent year-on-year in the first six months, with food prices growing relatively slowly and non-food prices increasing steadily, indicating a generally upbeat trend in economic conditions.

Incomes also improved in the first half. The average per capita disposable income reached 14,000 yuan ($2,035), up 6.6 percent year-on-year, faster than the per capita GDP growth rate of 6.3 percent. With their daily lives guaranteed, people are fully confident in achieving stability during the trade war.

Third, economic confidence comes from prosperity. In response to the question "Are you confident that the Chinese government could successfully cope with the trade war?" 1,180 interviewees said they had confidence, while 289 said no. It must be mentioned that most of the respondents who chose "no" also asked how one could define "successful." This indicates that some of them still have certain levels of confidence. But China's development and social progress has enhanced its citizens' confidence in continued economic gains.

Fourth, they were asked about their perception of the US. As to the question "Have you changed your positive perception of the US due to the trade war?" 793 said their perception had worsened, while 676 said there had been no change.

The second group of interviewees were mainly located in coastal regions like Shanghai, Fujian Province and Guangdong Province. These areas experienced opening-up earlier and have long had trade exchanges with US businesses, which is why people there generally have a clearer perception of the US.

Overall, the survey shows public confidence in China's economy. According to the NBS data, the overall performance of the Chinese economy in the first half of this year was characterized by stability, with economic development in line with expectations. In particular, consumption is fundamental and indispensable in supporting steady economic growth.

Domestic consumption usually accounts for 60 to 70 percent of China's economic growth, and the figure even reached 78.5 percent in the first half of this year, up 14.2 percentage points year-on-year. The continued support of consumption for the economy shows that daily life hasn't been greatly affected since the trade war broke out.

China's consumer sector is also undergoing transformation and upgrading, as reflected by obvious growth in such high-end consumption as education, entertainment and fitness. This trend will further promote overall economic restructuring and propel the economy toward high-quality development and smooth operations.

China has become the world's largest demand market, with about 30 percent of global economic growth driven by the country. In this sense, China's consumption contributes not only to the country but also to the world as a whole.

The article was compiled based on a report from the Chongyang Institute for Financial Studies of Renmin University of China.


blog comments powered by Disqus