Beijing. At a seminar held by the China Society of Macroeconomics under the National Development and Reform Commission on Wednesday, experts condemned the new round of tariff increases, saying it would not only harm the US but also bring new uncertainties to the world economy.
However, they also believe that reading from the good performance of China’s economy in the first half of this year, the nation has the ability to break the containment by the US.
The comments came after the US unexpectedly threatened to impose 10 percent in tariffs on another $300 billion worth of Chinese imports starting on September 1. The announcement came only 36 hours after the end of the 12th round of high-level trade talks between China and the US, and it again showed the US government is exerting maximum pressure on China.
Data from the National Bureau of Statistics showed that China’s economy has remained stable with good momentum, as major indicators are within a reasonable range.
In the first quarter, GDP grew by 6.4 percent year-on-year, which was the same as in the fourth quarter of last year. In the second quarter, due to the impact of US tariff increases on $200 billion of goods, China’s growth rate slowed. However, GDP still grew 6.3 percent in the first half of the year.
If the US collects 10 percent in tariffs on another $300 billion in goods, added to previous tariffs, it may reduce the actual size of the economy by 0.8 percentage points or 1 percentage point at most, Wang Yiming, deputy head of the State Council’s think tank, the Development Research Center, said at the seminar.
“The economy could come under downward pressure but its long-term development trend won’t change,” he added.
He also said that the long-term positive fundamentals of China’s economy are the basis for negotiations between Beijing and Washington, as China’s economic potential and resilience are both strong.
Zhao Jinping, an expert from the Development Research Think Tank of China, agreed. He said that China has a huge market. In particular, China has about 400 million people classified as middle-income, which shows there’s still big potential for domestic demand.
“China has occupied an important position in the global value chain, and the status of this value chain is constantly improving.” Zhao noted.
The experts discussed how to deal with the trade war and face external challenges.
“A most important thing is to take care of our own affairs and increase our attractiveness to foreign investors. We need to show more Americans the attraction of China’s big market, push the Trump administration back to the track of fair competition and win-win cooperation between China and the US, ” Chen Dongqi, an expert from the China Society of Macroeconomics, said.
(In association with Global Times)