Economic shift helps China gain bargaining power

By Hu Weijia Source:Global Times Published: 2019/7/17 20:10:27

Economic shift helps nation gain bargaining power

For those who are eager to sell goods in China amid the trade war, we can tell them - don't rush.

The slowdown in the economy has become a hot topic since official data showed on Monday that China's second-quarter GDP growth decelerated to its weakest pace in nearly three decades. 

It's possible the economy will slow its pace further in the second half of the year, and maintaining economic growth will be China's focus. A fresh stimulus package can never be ruled out, but now isn't the time.

Despite growing signs of economic weakness, retail sales surged 9.8 percent year-on-year in June. China's working population is larger than those of the US and Europe combined, resulting in a rapidly expanding middle-class consumer base. As long as household spending increases solidly, a stimulus package won't be urgent for China. The nation's economic slowdown is a fact, but the rest of the world does not need to be too pessimistic because China's domestic demand remains strong. 

The close attention being paid to China's second-quarter GDP growth means the global economy is increasingly dependent on China. News site reported that every percentage-point slowdown in the Chinese economy would lead to an average 0.3-percentage-point slowdown in GDP growth in the Czech Republic, citing a study by the Czech National Bank.

The relationship between China and the world is changing. A report released by consultancy McKinsey found that the world has become more economically exposed to China, but China's exposure to the world in trade, technology and capital has fallen in relative terms.

China is undergoing a transition as consumption surpasses investment to become the strongest driving force of the economy. 

Instead of worrying about a slowdown in the Chinese economy, foreign companies need to work harder to tap into the Chinese market which is increasingly consumer-driven.

Turkey is expected to boost cherry exports to China after the Chinese authorities adjusted the phytosanitary requirements on Turkish cherries on June 28. This will help Turkey encroach on the US' market share in China in terms of cherry imports. Consumption growth doesn't mean China will buy everything foreign companies want to sell, but the ongoing economic transition will help China gain bargaining power.

The author is a reporter with the Global Times.
Newspaper headline: Economic shift helps nation gain bargaining power


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