Chinese Communist Party newspaper People’s Daily counters ‘pessimistic’ views on trade war impact

Beijing launches propaganda effort to counter growing public pessimism about the country’s economic prospects

PUBLISHED : Wednesday, 17 October, 2018, 2:11pm
UPDATED : Wednesday, 17 October, 2018, 3:35pm

The Chinese government press sought to combat reports of rising domestic pessimism about the country’s trade war with the United States on Wednesday, telling readers the conflict would have little impact on the nation’s current or future prospects.

In its lead editorial People’s Daily argued the trade war’s impact on China was limited, the country’s rise did not depend on the US, and that China was a “super large” country that could thrive on its own.

Readers were urged not to lose faith in the country’s prospects.

“There are some pessimists in China arguing that we cannot win a trade war [against the US] or we cannot afford to fight a trade war,” the piece in the ruling Communist Party’s mouthpiece reads.

“Some even think the trade war could alter China’s ‘national destiny’ and believe the trade war could contain China’s rise over the coming decades.”

These pessimistic arguments were “groundless” as they misjudged China’s current economic situation and ignored China’s “unique institutional advantages” – its system of strong one-party rule and a powerful state apparatus to leverage critical resources, the editorial continued.

The opinion piece is part of Beijing’s propaganda effort to shore up consumer and business confidence in Chinese markets and the economy in response to growing public worries in China about the implications from prolonged trade hostilities with the US.

China’s state radio also took part in the public relations campaign, publishing an editorial on its website on Tuesday evening saying China had plenty of ammunition with which to fight the trade war with the US.

“China’s acts of reason and restraint do not mean China is running out of ammunition,” according to the article, which was republished on the homepage of the official Xinhua news agency.

“On the contrary, China’s economic resilience and huge market provide powerful ammunition for China to make a counterstrike in this trade war.”

Beijing and Washington have not officially scheduled any talks to try to resolve the conflict, although there have been recent reports that US President Donald Trump and Chinese President Xi Jinping may meet at the G20 summit in Buenos Aires, Argentina at the end of November. In the meantime, Trump has threatened to impose new trade tariffs that would cover virtually all Chinese imports to the US.

A reading of the economic impact of the trade war will be released on Friday, when China’s National Bureau of Statistics is due to report on the country’s economic growth performance for the third quarter. It is expected to show a further slight deceleration in the growth rate to 6.6 per cent, down from 6.7 per cent in the second quarter.

China economic health check may show slowing GDP growth in wake of trade war

China’s financial markets have already been hit hard by the trade conflict. The benchmark Shanghai stock index has lost about 25 per cent this year and the Chinese currency, the yuan, has depreciated about 9 per cent from its February high.

Public concern about the negative impact of any additional US tariffs and the possible shift of global supply chains out of China to avoid US tariffs are evident, despite Beijing’s efforts to control the narrative.

Xi showed his determination to fight a prolonged trade war with the US, if necessary, when he said in late September that rising unilateralism and protectionism was forcing China to rely more on itself for development and this was “not a bad thing”.

Xi Jinping says trade war pushes China to rely on itself and ‘that’s not a bad thing’

According to Wednesday’s People’s Daily editorial, the ongoing trade war will not cause China’s growth to “fall off a cliff.” Rather, the impact on the economy will remain within “a controllable range”.

“An important reason on which some people base their pessimistic arguments is that they wrongly regard China’s opening to the outside world as opening [only] to the US, so they exaggerate the power of a China-US trade war,” it argued.

“The US is China’s biggest trading partner, but it is not the only partner,” the piece continued, giving readers the example of the country’s largest mobile phone and telecommunications equipment manufacturer Huawei Technologies.

“Look at Huawei. Although the US has blocked Huawei from entering the US market, Huawei has been quite successful in other countries,” it said.

“A strong wind may be able to make huge splashes in a lake, but it will do nothing to the ocean,” the piece said, arguing that China’s domestic market was big enough to absorb the external shock from the trade war.