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Is trade war with the US helping China's economy grow?

Just Earth News | @justearthnews | 17 Apr 2018, 08:13 am Print

Is trade war with the US helping China's economy grow?

Beijing: China has announced on Tuesday that it has witnessed a growth of 6.8 percent in the first three quarters as opposed to a corresponding period last year.

The figure has exceeded Beijing's own target of 6.5 percent grown for the entire year.

According to experts, China's growth has been propelled by 'strong household spending' and 'heavy government investment in infrastructure', but there's more to it.

China has also been helped by the US, albeit unwittingly.

Beijing's fracas with Washington over trade has seen China buying less US products and selling more to them.

Another significant factor aiding China is its non-dependence on trade.

Trade is important for China, but not as important now for it to grow as it was in the years gone by.

However, Chinese imports to the US still stands valuable, as the revenue generated helps the Asian superpower fuel its domestic expenditure.

Revealing its data, Beijing has said that its trade surplus stood at USD 58 billion in the first quarter of 2018.

Commenting on the US China trade rivalry, Xing Zhihong, the spokesman for China’s statistics bureau, said, "Sino-American trade frictions cannot cause a slowdown in the Chinese economy, nor change the good momentum in China’s economic development.

Expert have also questioned US President Trump's overzealous nature to curb China's growth, saying it is unlikely to foster the US' growth.

"Many American consumers and companies benefit from Chinese-made goods, and a number of economists doubt that Mr. Trump’s focus on lowering the trade surplus with a single country will help the United States," read a report published by The New York Times.

Over the years, China has also become more self reliant. What was once renowned for assembling goods, can now produce almost all the parts in its own country, thereby reducing imports from foreign lands.

"In the last 10 years, you’ve seen China become considerably more developed and sophisticated in terms of its own supply chains,” the outlet quoted Gordon Styles, the founder and president of Star Rapid, a company in Zhongshan, China, as saying.

"It is now easier than it ever was before to produce the entire product here," he added.

Since it now manufactures most products in its own country, China has been able to create a lot more in the economy, says Nadim Ahmad, the head of the trade and competitiveness statistics division at the O.E.C.D.

Last week, Chinese President Xi Jinping vowed to open up parts of China's economy and relax certain trade policies.

However, without naming anyone, in a veiled threat, he has warned against a 'cold war mentality'.

He made the comments at the Boao Forum for Asia.

According to Xi, Beijing will be lowering import tariffs on cars and relax certain criteria pertaining to foreign firms investing in the Chinese media.

However, Xi did not specify when the changes will take place.


Image: Wallpaper