Macroscope | China must turn to Plan B as trade war escalates, and spur the domestic economy
David Brown says the potential damage that America’s trade war can wreak on China is no doubt giving Chinese planners sleepless nights, but now is the time to batten down the hatches and shift their focus to shoring up consumer confidence
With trade disputes, currency spats, monetary uncertainty and a wavering world recovery, a perfect storm is brewing. That’s bad news for a global economy in desperate need of a solid spell of uninterrupted growth.
With dark clouds looming, China stands in harm’s way with its economic growth plans at risk of being blown off course. Beijing must batten down the hatches and prepare for all possible contingencies. China’s economy could be in for a bumpy ride in the second half of the year.
Set against these kinds of numbers, Beijing’s 2018 target for economic growth at around 6.5 per cent seemed a reasonable bet as long as favourable headwinds prevailed. Free-flowing world trade, good geopolitical stability, a sound policy environment and improving economic confidence might have seemed fair assumptions when the forecasts were first made, but recent events have thrown it all in the air. Fears about a global trade war may be giving China’s planners some sleepless nights.