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Beijing (EFE) .- The worsening of the trade war between USA and China leaves Asian power in the dilemma of how to react to Washington while trying to maintain sustained economic growth.
The US announcement this week of the application of new tariffs of 10% to imports from China totaling $ 200 billion opens new questions about the international consequences of this giant duel
The China has announced that it will respond with the measures it deems necessary, but without detailing them, and its eventual arsenal includes new tariffs, pressure on US companies operating here or further devaluation of the yuan.
Beijing must also ensure that all this does not slow down its economic growth and badysts are already putting forward possible fiscal or monetary measures to prevent a slowdown
US tariffs could have an impact on the economy. Chinese gross domestic product (GDP) growth of 0.4% (according to HSBC banking group) or 0.5% (for Capital Economics consulting firm)
The first option for China would be to apply customs on US imports, as it did at the beginning of the month with Washington's first round of tariffs (with reciprocal measures against imports valued at $ 34,000 million). But since China imports much less from the United States than the other way around, if the government of Beijing opts for this option and wants to reach the value of 200 billion, it will have to choose asymmetrical tariffs (19459007) (for example tariffs 40%). HSBC explains in an badysis of the situation.
Another possibility is that Beijing opts for non-tariff measures, such as pressures, obstacles or bureaucratic problems. US companies on Chinese territory, in addition to limiting the flow of tourists to the United States.
This option, most likely for Capital Economics as explained in a note to customers, is the one that China has successfully used in other political conflicts (against Japan in 2012 and against South Korea in 2017), because it causes significant economic disruption.
An escalation of tension "would complicate life greatly American companies in China," said Leon Cornelissen, economist consulting firm Robeco, who still predicts that the Asian giant will be the most affected by this conflict.
In addition, China is lowering the price of the yuan (continued 3% in one month), to partially offset the loss of competitiveness of tariffs, even though badysts believe that to go further in this way could be dangerous and encourage
Beijing also has what badysts call "the nuclear option": sell some of its mountain of US debt reserves (about $ 1.2 trillion) to harm Washington, although the possibility could have negative consequences at the global level
On a strictly political level, China seeks international support, with the EU at the bilateral summit next Monday in Beijing or at the summit of the group BRICS But an import substitution policy has already begun: after imposing tariffs on US soybeans (a key export from the United States to China), it has been reduced to soybeans from other countries, do not aug to bring the cost of food production.
HSBC predicts that a likely consequence is that China will accelerate the diversification of its US trade.
Internally, although Chinese exports are slightly reduced, the country's economy has already diversified and does not depend so much on foreign trade, since 90% of its growth comes from
Here , the government has a broad arsenal to revive the economy, starting by using the budget surplus of the first five months of the year to reduce corporate taxation.
It can ease monetary policy, either by further reducing the reserve requirement ratio of banks to use this money in lending to the real economy, or directly by reducing interest rates. EFE (I)
rfc / jem / mr
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