Trade war 'may hurt China's fiscal stability'

In a separate Qiushi commentary, Chinese Commerce Minister Zhong Shan called for "proactively expanding imports to promote balanced trade".
In a separate Qiushi commentary, Chinese Commerce Minister Zhong Shan called for "proactively expanding imports to promote balanced trade". PHOTO: REUTERS

SHANGHAI • A Chinese Communist Party journal has said that the country may experience near-term pain from trade friction with the United States, including a negative impact on financial stability, but China's stable growth trend would not change.

A commentary in the ideological journal Qiushi, or Seeking Truth, warned that trade and economic friction between Washington and Beijing could undermine "China's economic growth, financial stability, trade and investment, employment and people's livelihoods", particularly in industries exposed to tariff action by the US.

"But at the same time, we must see that the fundamentals of China's economic development have not changed. In particular, China's economic structure has been significantly improved in recent years, which has effectively improved its ability to withstand external shocks," the journal said.

The US had provoked these frictions, it added, but China would accelerate research and development of core technologies, optimise its industrial structure, promote market diversification, and strengthen support provided by domestic demand to "turn bad into good". It said China's macroeconomic management had "sufficient policy space" to counter negative impacts, with fiscal policies potentially playing a "greater role in expanding domestic demand and restructuring".

Quoting Chinese philosopher Mencius, the journal said: "A just cause finds much support, an unjust one finds little.

"Over time, Sino-US economic and trade frictions will surely continue to develop in a direction favourable to China."

 
 

In a separate Qiushi commentary on Saturday, Chinese Commerce Minister Zhong Shan called for "proactively expanding imports to promote balanced trade".

China must "strengthen the protection of intellectual property rights, protect the legitimate rights and interests of foreign investors, and create a good business environment for investing in China", Mr Zhong wrote.

China will "greatly relax market access" and "steadily expand the opening of the financial industry, continue to promote the opening of the service industry and deepen the opening up of the agricultural, mining and manufacturing sectors", he said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 03, 2018, with the headline 'Trade war 'may hurt China's fiscal stability''. Print Edition | Subscribe