By Ralph Jennings
U.S. President Donald Trump might pursue a more aggressive anti-China trade policy for the benefit of American jobs.
There’s the threat of a 45% tariff on Chinese imports and disincentives for American firms that operate in China.
The New York real estate mogul’s election victory Nov. 8 naturally raised fear of a trade war with China, the No. 2 single-country U.S. import-export partner after Canada in 2014.
China is already prepared, and the chance for a foreign country to win a trade war long gone, state-run English-language China Daily newspaper online says.
China is already prepared, and the chance for a foreign country to win a trade war long gone, state-run English-language China Daily newspaper online says.
China is hiding something.
More on that later.
The Jan. 3 report cites trade officials and economic advisers.
The Jan. 3 report cites trade officials and economic advisers.
They argue that the Chinese economy’s shift away from export manufacturing will save it from any protectionist attacks offshore.
It’s probably referring to the government-driven focus over the six years away from heavy industry to cleaner investments and consumer spending.
“They said trade is no longer a main factor contributing to the nation's GDP growth, and the country has made preparations in the past few years for taking on the challenge of a possible rise in (foreign) protectionism,” the report says.
A magazine featuring a front page story on US President-elect Donald Trump sits on a magazine rack at a company office in Beijing on December 28, 2016.
A magazine featuring a front page story on US President-elect Donald Trump sits on a magazine rack at a company office in Beijing on December 28, 2016.
The roughly $11 trillion economy relies more now than before on domestic consumption, reducing the weight of trade, the report says.
Trade fell from 48.8% of the economy in 2011 to 36.3% in 2015 and two-fifths of exports reach places other than the United States.
Domestic consumption, China Daily says, came to 66.4% of the still growing GDP in 2015.
“China's confidence in facing protectionism by the U.S. lies in the reform it recently has made,” the report says.
But China isn’t telling all, economists argue.
But China isn’t telling all, economists argue.
The transition from being the world’s factory to a country dependent more on its own giant consumer market is gradual, not one that would survive a sudden hostile whack at trade.
“Manufacturing is a huge growth driver for all the countries in Asia, and it would take a huge hit in the event of a trade war,” says Tim Condon, chief Asia economist with ING in Singapore.
“Manufacturing is a huge growth driver for all the countries in Asia, and it would take a huge hit in the event of a trade war,” says Tim Condon, chief Asia economist with ING in Singapore.
“What they may be saying is (a trade war) would hurt China less than the U.S., and even that’s questionable. Manufacturing is simply too important to the Chinese economy and it’s the front line affected in a trade war. It would be a terrible scenario.”
The domestic spending power noted in China Daily also comes largely from the incomes of people who work, guess where, in manufacturing.
“Exports are driving income, so that affects investment and spending,” says Liang Kuo-yuan, chairman of the Yuanta-Polaris Research Institute, an economic think tank.
The domestic spending power noted in China Daily also comes largely from the incomes of people who work, guess where, in manufacturing.
“Exports are driving income, so that affects investment and spending,” says Liang Kuo-yuan, chairman of the Yuanta-Polaris Research Institute, an economic think tank.
China’s push to sign the Regional Comprehensive Economic Partnership free trade deal with 15 other countries in Asia also indicates it can’t rely just on its own consumer market alone, Liang says.
“Why do they make so much effort to get that?” he asks.
“It’s because they want their market to extend outward.”
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