US economy exhibits more uncertainties

Source:Global Times Published: 2018/12/25 20:53:39

The US stock market suffered its steepest Christmas Eve decline in history on Monday, which also affected the Chinese and Japanese stock markets. Some countries and regions survived the slide as their markets closed for Christmas.

People believe the direct cause of the decline is rate hikes by the US Federal Reserve and US President Donald Trump's blaming of the Fed. But the decline is related to people's lack of confidence in the US economy in 2019, the unclear future of the trade war and increasingly chaotic internal US politics.

On December 17, Trump tweeted that "It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike." Obviously he exaggerated. Washington has many political and economic uncertainties which could be ignited, and people will associate such a possibility with a stock market decline.

Trump regards the prosperous US economy as an advantage in a trade war and in adopting tough policies against other countries. But if there are more stock market fluctuations in 2019, the US trade game will be subtly affected.

Generally speaking, it's unrealistic for the US, the world's largest and most developed economy, to outshine other countries in economics in the long run. The US economy is highly open and integrated with the world economy. It has to maintain reciprocal relations with other major economies, and keep renewing its economic motivation in the era of globalization.

The US economic advantage has given it more say in making international rules. But such advantages have limits. Market rules will balance the situation.

Washington has been showing its political will in trade this year. US external trade is showing more signs of a planned economy. This is problematic.

It's only an assumption that the US economy is prosperous and other economies have to ask Washington for help. In fact, the US economy is as dependent on the world economy as vice-versa. Mutual dependency won't change. For example, if the US cuts trade with China, it will have to increase trade with other countries, and such a change is expensive for the US.

The US trade situation is shaped by many factors. Simply believing that the US is taken advantage of will only mislead Washington itself.

When there's weak growth in the global economy, the US economy will be involved. Washington can't plunder all the opportunities worldwide. America First is impossible in both the laws of economics and politics.

As economic issues spread worldwide, the US is obviously not the most patient society. Using a prosperous economy to promote risky external policies is especially not dependable. History proves that radical policies aren't in line with the US system. Although the US is powerful, it is also fragile to some extent.

The US is not familiar with its current political tension, and public opinion diverges on its economic prospects. China should be firm and steady in contact with the US. For China, being flexible as well as persistent will help rationalize China-US interests.

Posted in: EDITORIAL

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