Tuesday, September 18, 2018

Reuters — China will use trade war with U.S. to replace imports: state media

China is not afraid of “extreme measures” the United States is taking in their trade war and will use it as an opportunity to replace imports, promote localization and accelerate the development of high-tech products, state media said.
The People’s Daily newspaper, which is published by the ruling Communist Party, made the comments in a front-page article in its overseas edition on Wednesday....
China to follow Russia's lead in import substitution. This means that those markets will be lost to the global economy. China will obviously increase imports from Russia as well, which is already happening. The losers in this will be US and EU countries.

China had already announced before the tariffs and potential trade war that it was switching from an export-led economy to a domestic-driven one, so this just speeds up the process.

As Putin said of sanctions on Russia, it's a blessing in disguise, since Russia could not have mustered the will power to increasingly tap the potential of the Russian economy. The same can be said for the US trade war with China. Instead of making China weaker, which is its aim, it will make China stronger and more self-sufficient. It will also strengthen the Sino-Russian economic and strategic alliance.

China will use trade war with U.S. to replace imports: state media
Reporting by Brenda Goh; Editing by Paul Tait

1 comment:

David Nystrom said...

The aim of the trade war is not to weaken China. At least, that is not Trump's aim. He has been an economic nationalist going back to the 1980s and aims to reshore manufacturing. It may be the aim of Dweeb State ghouls like Lindssthay Grahamnesty who have joined Trump on this issue with the aim of stopping Made in China 2025.

I agree the trade war is not likely to stop China's rise, though China has some issues currently. Chinese credit creation has been very high in the past decade, productivity growth is weak, 30% of corporate equity is owned by the state (and more than half of bank loans go to SOEs), real estate markets are red hot, the stock market is crumbling, and the Belt and Road Initiative looks to be a fiasco.