Trade war drags on; China marches forward
Published: Dec 30, 2019 11:06 PM

Chinese and US trade officials are set to make another attempt at striking a trade deal to defuse an increasingly bruising trade war that has rattled global markets and presented mounting challenges to both economies. Photo: VCG

On the morning of October 1, I woke up somewhat disappointed. I had been excited at the chance to watch military jets that were scheduled to fly over Beijing later in the morning from my living room window, but with heavy smog outside, that was not happening. 

So I got my morning coffee and turned on the TV. Live broadcast from Tiananmen Square was already on: red flags, red carpets, colorful flowers, smiley faces, soldiers with ramrod posture.

It was the biggest party of the year for 1.4 billion Chinese - the 70th anniversary of the founding of the People's Republic of China. Through the high-definition footage, the jubilation and grand scale were vivid. Still, something was off. The gloomy smog was also clearly displayed on the TV.

It suddenly struck me that the scene was also befitting what the country was facing - a dark cloud cast by the US trade war. 

After a dozen rounds of negotiations, there was still no clear sign of an end to the trade tussle that left bruises on both sides as well as the world economy. Washington's playbook in 2019 was more or less the same as in 2018: Continuing negotiations with Beijing, while wielding the tariff stick. The trajectory of the trade war this year was similar to that of last year: tariffs were imposed or raised, then later canceled or delayed; a deal was reached, then delayed.

This year, the two sides held nine rounds of high-level face-to-face talks in Washington, Beijing and Shanghai and conducted dozens of phone calls. All the while, Chinese and US officials continued to raise existing tariffs on each other's goods and impose additional duties - or threaten to do so. 

What's worse was that the trade war appeared to have pervaded more areas, as US officials stepped up their crackdown on Chinese technology companies by blacklisting more firms such as surveillance equipment suppliers. The US also opened several new fronts in its hostile approach toward China, including interference in China's internal affairs in the Hong Kong Special Administrative Region and Northwest China's Xinjiang Uyghur Autonomous Region.

The tensions cast uncertainty on the world's second-largest economy, which was already facing mounting downward pressure stemming from a deep structural transitioning period.

However, when I saw the elation of 100,000 students, farmers, teachers, engineers - people from all walks of life - joyfully and energetically parading through Tiananmen Square, I was also reminded of the vitality of the Chinese economy. Just as the smog could not overwhelm the elation in Tiananmen, the trade war did not stop the Chinese economy from marching forward.

Despite the trade war, growth is widely expected to remain in the target range of 6-6.5 percent for the year. The Chinese stock market is on track to finish the year on a strong note, with the blue-chip CSI 300 gaining 35.57 percent so far this year, the Shanghai Composite Index adding 21.9 percent, and the Shenzhen Component Index rising 43.18 percent.

China also made strides in a wide range of areas from market reforms and opening-up to technological innovation and infrastructure. In 2019, it became one of the first countries to roll out 5G networks. It also inaugurated the world's biggest airport in Beijing, built the largest high-speed rail network in the world, and so on.

With the trade war and the overall downward pressure, it is not only easy for foreign officials and analysts to underestimate China's strength - it's also easy for Chinese people to take these breakthroughs for granted.

As one of my colleagues, who was lucky enough to attend the celebration in Tiananmen Square, put it: You can't feel the vibe unless you are actually part of it. Regardless of what some foreign officials and analysts say, the Chinese economy is moving forward and the Chinese people know best.