Chinese Expert: "Worsening Trade War Is the Biggest Risk to China's Economy"

[Asia Economy Beijing=Special Correspondent Park Sun-mi] This year, US-China trade relations are placed on a new starting point, but it is not easy for the trade war to calm down, and if the situation worsens, it is diagnosed to be the biggest risk to China's economy in 2020.

On the 2nd, Global Times reported the atmosphere within China that even if the Phase 1 negotiations between the US and China are completed, it may be difficult for Phase 2 negotiations to proceed immediately.

Gao Lingyun, a researcher at the Chinese Academy of Social Sciences, said, "The US side prefers to implement the Phase 1 agreement and conduct Phase 2 negotiations simultaneously, but the Chinese side wants to observe the implementation of the Phase 1 agreement before deciding whether to enter Phase 2 negotiations."

He added, "The economic downturn pressure in the US has made President Trump uneasy. Therefore, President Donald Trump wants to start Phase 2 negotiations with China to ease trade conflicts," viewing President Trump's willingness to proceed with trade negotiations as a calculated political move to gain points ahead of the 2020 presidential election.

Bai Ming, deputy director of the International Market Research Institute at the Ministry of Commerce, diagnosed, "Phase 2 US-China negotiations will focus on more difficult topics that have been obstacles in previous negotiations, such as China's industrial subsidies and advanced technology policies."

Although President Trump stated on Twitter that the US-China Phase 1 trade agreement signing would take place on the 15th and that he might go to Beijing for Phase 2 negotiations, Chinese experts say that in reality, it is difficult for Phase 2 negotiations to start.

Global Times also pointed out that the worsening US-China trade war is the biggest risk factor for China's economy in 2020.

Li Chang'an, a professor at the University of International Business and Economics, expressed concern, "The greatest uncertainty lies in the trade war between the two countries. This could lower China's economic growth rate by around 6% or more." Professor Li also diagnosed that although the US and China have reached a Phase 1 trade agreement and are about to sign it, Phase 2 negotiations could be more difficult due to complex issues such as intellectual property rights and industrial policies, as well as the US's frequent changes in attitude.

Meanwhile, within China, there is also a diagnosis that even if the US-China trade negotiations are successfully concluded, the conflict between the US and China will not rapidly improve.

Su Yinhong, a professor at Renmin University of China, said in an interview with the Hong Kong South China Morning Post (SCMP) that even if the US and China reach a Phase 1 trade agreement, it will be difficult for bilateral relations to escape the existing tense relationship. He advised, "Except for the trade sector, there is no sign that US-China tensions are easing," and added, "US-China relations seem to be changing now, but it is closer to the unchanged side (of the existing relationship)."

This content was produced with the assistance of AI translation services.