Friday , August 12 2022

Trade war warms Chinese economy is not good. Next year's GDP insurance is in desperate fear, the RMB rate has declined 7.2 | Anue 钜 亨 – Continental Political Economy


The US-China trade war is hot. The US plans to tax a 10% tariff on $ 300 billion worth of goods in September. UBS estimates that the trade war will threaten China's GDP growth rate to 5.8% next year. The exchange rate of the US dollar will rise to 7.2 yuan.

Wang Tao, chief Chinese economist at UBS Investment Bank Asian Economic Research, said that if the US starts charging a tariff of 10% on China's $ 300 billion worth of goods as planned in September, it is estimated that the growth rate of China will grow by 30 in the next 12 months. The base point, along with Huawei's US ban, will reduce China's GDP growth rate from 6.2% to 6.1% this year, it will fall further below the 6th mark next year, leaving only 5.8 %.

Wang Tao believes that the chances of the US and China reaching a deal this year are not high. Even before the US presidential election next year, no agreement can be reached. Hopefully, but the trade war will not get any better.

In response to the impact of the trade war on the Chinese economy, Wang Tao noted that the Chinese government will expand its facilitation efforts, including increasing central bank liquidity, and reducing 100 basis points this year, while expanding funding. for infrastructure to maintain economic growth.

As to whether the trade war will allow people to abandon the renminbi devaluation, and then derive a currency war, Wang Tao believes that the renminbi must carefully manage the renminbi exchange rate. Although the renminbi will continue to decline, it will not depreciate sharply. It is estimated that the renminbi against the end of this year. US dollar exchange prices will rise to 7.1 yuan, and may fall further to 7.2 yuan next year.

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