Ahead of the talks between China and the United States at the forthcoming G20 summit, economists have said that China can afford to offer resistance and take a tougher stance in the negotiations.
Economists from a think tank at Tsinghua University in Beijing have said that China will be able to take a tough stance in their talks with the United States. The economists suggest that due to the strong economic position China is in and the resilience that comes with the economy, the country can be able to go at it with the United States at the Group of 20 summit which will be held in Japan. President Xi Jinping of China is set to meet and have a negotiation with President Donald Trump of the United States.
Although the economists say that China can be able to take a tough stance against America, they have also warned that the country should not push the retaliatory measures too far. This is due to their opinion that the ultimate aim of the talks should be to “bring the United States back to the negotiation table” and thus allowing trade relations between the two countries to get better.
These comments come on the back of deteriorating trade relations between China and the United States. Just this month, China introduced a list of “unreliable entities” which could be used to put American businesses at a disadvantage. It has also put a $60 billion retaliatory tariff on goods from the United States as part of its arsenal in the trade war. These measures could have a long-lasting impact on trade between the two nations if the trade war is not resolved at the G20 summit.
There are concerns that the trade war could have serious and long-lasting effects on the stability of the Chinese economy and society as a whole. The best economists said that China can be able to counter the effects of the trade war due to the country’s steadfast position in the fundamentals of its economic policy. Furthermore, economic growth can be sustained through the doubling of its middle-income population in the next 15 years from the current figure of 400 million.
Although both countries may be able to weather the storm in the short term and maintain their current positions in the trade war, the long term effects will be devastating on both economies. China’s exports have fallen from 35% of the gross domestic product to 18% as of last year. This shows just how much of an effect the ongoing trade war has on the economies of the countries in it. Over time, tariff hikes have been placed on more goods and the longer this goes on, the economies of both countries will begin to suffer more even though they may be stable in the meantime.
The talks at the G20 summit will aim at reinstating good trade relations between China and the United States and China can afford to maintain a tough stance at the negotiation table. The results of the negotiations at the G20 summit will have long-lasting effects on trade relations between the two countries.