UNITED STATES, WASHINGTON (OBSERVATORY) — The “fairly stable” position of the Chinese economy allows Beijing not to make “monstrous compromises” with Washington in a trade war, said Scott Kennedy, an expert at the Center for Strategic and International Studies in Washington, in an interview with CNBC.
“China’s economy is still quite stable. They have other trading partners, they have internal incentives that they can use. Thus, they are able to withstand the storm,” Kennedy said.
According to him, some problems of the Chinese economy, such as rising debt levels, were resolved before the start of the trade war last year, which contributed to the current stability in China.
“So, the economic situation China is currently in is relatively good. That means they are in no hurry to make terrible compromises to meet US needs,” Kennedy said. “Of course, if you look at the US economy, it’s in a similar situation that leaves both sides in a wait and see position. ”
Chinese and American officials plan to hold talks in Washington in early October in order to try to conclude an agreement that would put an end to the protracted trade war.
A study by the US Federal Reserve showed that the global economy could lose about $ 850 billion by the beginning of 2020 due to trade uncertainty associated with the conflict between the US and China.
Uncertainty in trade policy “has grown to levels not seen since the 1970s,” researchers at the US central bank noted.
China’s GDP in the II quarter grew by only 6.2% in annual terms, at the lowest pace for at least 27 years, after an increase of 6.4% in the I quarter.
Amid growing pressure, China plans to strengthen support for the economy, including investing in infrastructure projects and regional development, the State Council of China said.
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