Economy resilient amid trade war

By Xie Jun Source:Global Times Published: 2019/9/10 22:53:41

US affected more, despite Mnuchin’s claim: experts

The trade war triggered by US tariffs has invited retaliatory levies by China. Soybean is a commodity China imports in large quantities from the US. Photo: VCG

China's economy has shown strong "resilience" and has been "performing within the controllable range" despite the China-US trade war, as companies hit by the tariff increases try different methods to weather the challenge, experts argued on Tuesday. 

They also rebutted a US government official's claim that the US economy wasn't feeling any negative impact from the trade war. "He is not telling the truth," one of them said. 

US Treasury Secretary Steven Mnuchin on Monday offered a rosy view of the US economy, saying that the US is the "bright spot" of the world while China and Europe are slowing. In an interview with Fox Business, he also said that the US government has "not yet seen any impact on the US economy" as a result of the escalating trade war. 

Chinese Vice Premier Liu He said that China is firmly against the trade war as it runs counter to the interests of China, the US and the world when he met with Citigroup CEO Michael L. Corbat on Tuesday, reported. 

Li Chunding, a professor at the College of Economics and Management under the China Agricultural University, acknowledged that certain Chinese trading companies have been hit by the trade row, but in general China's economy hasn't slid back. 

China's exports surged by 6.1 percent year-on-year in the first eight months this year in yuan-denominated terms, although China's exports to the US slumped by 3.7 percent on a yearly basis, customs data showed. 

Many Chinese companies in South China's Guangdong Province are taking active measures to cope with the situation, according to an article written by Wang Wen, executive dean of the Chongyang Institute for Financial Studies under Renmin University of China. 

Many companies in Guangdong, a hub of traditional Chinese manufacturing, have to face increasing tariffs and higher costs amid the trade war. 

"The China-US trade friction is becoming a protracted war, but we are prepared for that... we are confident about negotiating with US importers to share the blow from the extra tariffs. We also have other options, such as increasing technological content and exploring international markets," said Yang Jinghui, chairman of Heisen Intelligence, a high-tech startup headquartered in Dongguan. Half of Heisen's products are exported to the US. 

An assembly line worker at the Dongguan headquarters of shoe manufacturer Huajian Group said that the company will soon upgrade its Dongguan plant into a research and development center, Wang wrote in the article.

"Companies are not shutting down because of the trade war. Instead, they are trying all means such as exploring alternative markets to cope with the situation," Shi Jianxun, an associate dean of the Institute for National Innovation and Development under Tongji University, told the Global Times on Tuesday.

Those efforts prove successful according to economic data. Dongguan's above-scale industrial added value increased by 6.8 percent year-on-year in the first seven months this year, with trade surging by 4.4 percent.

Sun Lijian, director of the Financial Research Center at Fudan University, also told the Global Times on Tuesday that the Chinese government has increased funding for local construction and rolled out fiscal policies like tax cuts, which has helped the domestic economy to maintain its growth. 

He also said the US economy is not as immune to the trade war as Mnuchin claimed. "The US government wanted to prop up its own manufacturing by hitting other countries' manufacturing sectors. But it didn't work. The trade protectionism also hit its own manufacturing industry," he said. 

He also said the US' services sector is backed by its booming capital markets, but this could be affected if the country's tech companies lose recognition from the market and if other countries, when their economies rebound, no longer seek the US dollar as a safe-haven asset. 

Shi also pointed out that the tit-for-tat tariff hikes have caused the costs of raw materials to surge also in the US, while making selling hard for many US products that target the Chinese market like soybean. 

"In general, I think Chinese people now have stronger mental endurance for trade war blow compared with US people," he said. 

Posted in: ECONOMY

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