Experts say China should focus on reforms to cope with trade war pressure

By Xie Jun Source:Global Times Published: 2019/8/28 20:57:11

As both China and the US grapple with the pressure from their trade row, China's key for tackling the situation is to "focus on its own missions" such as keeping up reform and opening-up, experts said at a seminar on dealing with trade friction held in Shanghai on Wednesday morning. 

One expert said at the seminar that China has the confidence, abilities and resilience to withstand the pressure from the trade friction. 

The experts made the comments at a time when the China-US trade war has shown signs of escalation recently. The US government on Saturday announced it would raise tariffs on around $550 billion worth of Chinese imports following China's move to fight back with tariffs on $75 billion of US goods. 

The news triggered a slump in the US stock markets as fears arose of the trade friction being upgraded. The A-share markets also fell but to a lesser extent. 

Experts have pointed out that although the Chinese economy is facing downward pressure because of the impact from the trade war, Chinese economic data still points toward some positive signs such as the 6.3 percent GDP growth in the first half of 2019. 

"Compared with the US, China has more leeway for policy making. For one thing, the Chinese government's 'policy box' for stabilizing the economy is sufficient and many policies like interest rate cuts have not been used yet. For another, China's opening-up policy will lead to more opportunities and benefits for the country as China continues to open its doors to the world," Shi Jianxun, associate dean of the Institute for National Innovation and Development under Tongji University, told the Global Times on Wednesday. 

The government is rolling out a series of opening-up measures, such as expanding free trade zones and building Shenzhen into a pilot demonstration area of socialism with Chinese characteristics. 

Zhang Daogen, director of the Shanghai Academy of Social Sciences, said at the seminar that under such circumstances, China should "take a firm grasp" of its own missions. 

"China should persist with reforms and push opening-up in an unswerving manner. As long as China can broaden opening-up measures, it can reduce damage from the trade dispute to the lowest level."  

Huang Renwei, a research fellow at the Shanghai Academy of Social Sciences, said that although the trade friction brings challenges for China, it also brings rare opportunities. 

According to Huang, the trade war is pushing China to speed up its technological reforms. "Take 5G for example, China has been pushing 5G development but much was done in partnership with US companies. Now that the US has cut such cooperation, China has to do it independently instead of relying on the US," he told the Global Times.  

"Whether China can win the trade war depends on how much it can do to enhance product quality, [global] market share and competence. If China wants to weather the storm, it has to grow better and stronger and solve its shortcomings," Huang said. 

Yuan Zhigang, a professor of the School of Economics under Fudan University, suggested that China should implement internal reforms in areas such as State-owned enterprises, rural land and finance. 

Shi also stressed that the China-US trade friction showed that the traditional "made in China, consumed by the US" model can't last any longer, and that China must adjust its industrial structure to turn away from low-end manufacturing. 

Posted in: ECONOMY

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