China holds winning card in trade conflict with the US

By Hu Weijia Source:Global Times Published: 2019/5/7 21:28:20

Stocks in the Chinese mainland recovered from a deep plunge triggered by concerns about an escalating trade battle with the US on Monday, with the benchmark Shanghai Composite Index gaining 0.69 percent on Tuesday. The market's performance shows that investor confidence has been restored. 

The Chinese economy can withstand pressure from the US and quickly restore stability. Despite their initial surprise at unexpected US moves, many people in China's economic circles remained calm and rational. The impact of the US threat to levy more extensive tariffs on imported Chinese goods was smaller than many people had imagined.

Chinese Vice Premier Liu He will travel to the US for trade negotiations scheduled for Thursday and Friday. News about the trade talks, whether good or bad, will in the coming weeks be an uncertain factor in the global economy. Moves by the US side are highly unpredictable, but the Chinese economy is able to handle this and remains steady amid the uncertainty. The performance of stocks in the past two sessions shows China can do this.

It is possible that the economic row may become an intermittent fault line in China-US relations. The nation must be prepared for unexpected economic attacks, but it has the endurance to bear external pressure. In this case, the authorities need to closely watch the financial markets and move quickly in response to potential crises. 

There are some who say that China's current policies may be not strong enough to stimulate the economy, and they claim that there is still room for more active monetary and fiscal measures. 

If the economy faces growing downward pressure in the coming months, strong measures will be taken to encourage consumption and promote production. 

China is well positioned to roll out proactive stimulus policies if needed to support growth. We have the courage and endurance to bear any consequences arising from the trade talks. US President Donald Trump tweeted tariff threats to China on Sunday, but what he said in the tweet was almost the last card in his hand. 

But what happened in the past two days has given people confidence. China's economic situation will be resilient even if the negotiations break down and Trump's tweet becomes a reality. 

However, Trump still doesn't know what the last card in China's hand is.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
Newspaper headline: Nation holds winning card in trade conflict


Posted in: EYE ON ECONOMY

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