Global survey offers insight into who will fare worse in US-China trade war
- Financial crisis, political and social instability, and employment are the three biggest concerns globally about the future economic order
A greater number of global white-collar workers believe the US will suffer more than China as a result of the intensifying US-China trade war, a Bloomberg survey has found.
As many as 20 per cent of mid to senior-level company employees around the world think the trade war will hit the US harder than China, while 14 per cent believe China will be the bigger casualty, the survey showed.
Another 34 per cent believe the trade war will hamper global growth broadly, while 13 per cent think it will reset the relations between the world’s two largest economies.
“It’s no surprise that political and social stability tops the list of concerns. From US tariffs to Brexit, shifting political currents are a key source of uncertainty and risk in the 2018 business environment. That shows no sign of abating,” said Tom Orlik, Bloomberg’s chief economist.
Political and social stability is perceived to be the biggest concern by 65 per cent of Chinese respondents and 62 per cent of US respondents. Meanwhile, worries over recession and financial crisis top the list for respondents in Singapore, the UK and South Africa, according to the survey, carried out ahead of the Bloomberg New Economy Forum next month in Singapore.
China is forecast by the most respondents – 86 per cent of them – to be among the top three economic powerhouses in 10 years’ time. The US and Japan are the other two top candidates, with 70 and 36 per cent of respondents selecting them respectively.
Three quarters of respondents believe world leaders and governments should take the lead in finding solutions to global challenges, while only 10 per cent think the private sector should play a leading role.
The survey found that employees in China have greater confidence in the global trading regime. As many as 71 per cent of Chinese respondents said the regime will be restored in the long term, in comparison with only 50 per cent for global average.
The current global trading system, with the 23-year-old World Trade Organisation as its bedrock, has been in focus since US President Donald Trump took office.
The Trump administration has so far slapped a 25 per cent tariff on US$50 billion worth of Chinese imports as well as 10 per cent tariff on an additional US$200 billion of Chinese goods.
China retaliated by imposing tariffs of 5 to 10 per cent on US$60 billion worth of US goods, as well as a 25 per cent charge on US$50 billion of US imports.
The International Monetary Fund (IMF) forecast last week that a full-blown trade war would cut China’s GDP by 1.6 percentage points and US economic output by more than 0.9 percentage point in 2019.
The International Monetary Fund (IMF) forecast earlier in October that a full-blown trade war would cut China’s GDP by 1.6 per cent and the US economic output by more than 0.9 per cent in 2019.
The IMF has already lowered its estimates of world economic growth in this year and next year by 0.2 percentage points to 3.7 per cent because of the trade tensions.
China on Friday reported its GDP expanded by 6.5 per cent year on year in the third quarter, the slowest pace since 2008. Meanwhile, the benchmark Shanghai Composite Index has slumped by 23 per cent this year to its lowest level since November 2014.