We hope China and the US are able to resolve their problems based on mutual respect, benefits and honesty. Wang Shouwen, a vice commerce minister, said: In a media briefing in Beijing, Chinese officials underscored China’s desire for a reasonable outcome in Buenos Aires. In the lead-up to the G20, American and Chinese officials have been preparing the ground, with the Chinese side anxious to reduce tensions following a November 1 phone call between the two presidents.īut it is less clear that Washington is willing to ease pressure on China to liberalise further a foreign investment environment, seek ways to reduce a trade gap and make more conspicuous efforts to tone down concerns about Chinese pilfering of its intellectual property. A bad outcome will heighten risks of an accelerating global slowdown. Trade wars have consequences, including risks of a global recession.Īll this invests the Trump-Xi encounter with more-than-usual significance. However, if trade disruptions persist, fallout will become more serious in 2020 with global growth projected to be down by 0.8%, and with it US and China growth down significantly. It has marked down US growth by 0.2 percentage point to 2.5%, and China by a similar margin to 6.2%. The IMF has scaled back its global growth projections from its July Outlook forecast for 2019 to 3.7% from 3.9%. In its latest World Economic Outlook, the International Monetary Fund reports the world economy is plateauing, partly due to trade tensions and stresses in emerging markets. US-China trade tremors are already having an impact on growth projections for 2018-2020. Since a ragged outcome, or even failure, is in no-one’s interests, it is hard to believe Washington and Beijing will not seek to calm legitimate concerns about the risks of a full-blown trade war and its impact on global growth. The two sides will reach for a compromise that will enable relative stability to be restored to an economic relationship that is threatening to unravel. This is a fractious moment in world economic history.īillions of dollars in global equity markets will rest on a reasonable consensus in the Argentine capital. Or, to give it an oriental description, lose face. World markets unnerved by an evolving trade conflict between the world’s two largest economies will take their cues from this encounter between an unpredictable US president and a Chinese leader who will not want to be seen to yield ground. ![]() The risks of a new Cold War between the US and China are real: here's why
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