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With the US-China Trade War on Pause, What Will China's Economy Look Like in 2019?

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With the US-China Trade War on Pause, What Will China's Economy Look Like in 2019?

China Finance 40 Forum,

5 min read
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What can China do to sustain its economic growth in times of uncertainty due to the US-China trade war?

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At the beginning of December 2018, US president Donald Trump and Chinese president Xi Jinping met in Argentina during the G20 summit and agreed to a 90-day truce on the trade war. During this temporary halt on increasing tariffs, China and the United States will try to flesh out the terms of cooperation in the trading of commercial products as well as information technology. The Northern Financial Institute analyzes the trade war’s impact up until January 2019 and explains what domestic issues China needs to tackle during the temporary relief of outside pressures. This short briefing provides helpful insights into how China views the trade war and where the country might be heading. 

Summary

After meeting for two-and-a-half hours at the G20 meeting in Buenos Aires, US president Donald Trump and Chinese president Xi Jinping reached a deal to pause the US-China trade war. Trump’s plan was to raise tariffs on $200 billion worth of Chinese imports from 10% to 25% on January 1st, 2019. He pushed back that plan for 90 days to allow for negotiations on critical issues related to intellectual property, nontariff trade barriers, cyber theft, and the agriculture and services industries. To help reduce the US trade deficit, China agreed to import a larger amount of agricultural, energy and industrial products from the United States. 

The United States and China are in competition for long-term economic and technological dominance, and from its start, the Trump administration has emphasized leveling the trade deficit, protecting US intellectual property and ending China’s unfair trade practices. The US timing was highly strategic: China’s economy is slowing down and can no longer sustain growth...

About the Author

The Northern Financial Institute is a think tank that focuses on financial policies. 

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