Regardless of a temporary trade ceasefire, the US and China are hurtling toward a new Cold War that Beijing is poised to win, analysts argued.
US President Donald Trump’s policies have taken a “wrecking ball” to American innovation, while China is heavily investing in technologies of the future, Kyle Chan argued in The New York Times: Historians may well remember this moment as the start of the “Chinese century,” when Beijing pulled decisively ahead of Washington.
China is also racing to “ring-fence” its economy, The Wall Street Journal’s Lingling Wei wrote. At a high-level meeting last week, the Chinese premier called for a “new development paradigm” focused on domestic consumption to offset the impact of a US-China decoupling.
Meanwhile, China lowered its benchmark lending rates for the first time this year in a bid to stimulate domestic spending amid its trade war with the US. The cuts on Tuesday follow a raft of stimulus measures unveiled earlier this month as part of Beijing’s efforts to help buffer its economy from the impact of US tariffs.
Global investment banks raised their growth forecasts on the cuts, but analysts expect China to struggle to hit its target of 5%, as weak domestic demand, tariff fears, and deflation drag on growth.
The 90-day tariff truce between Beijing and Washington may ease pressure on Chinese officials to introduce a more sizable stimulus package, Nomura’s chief China economist said.
Source: Reuters
Leave a Reply