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US urged to see opportunity in China’s economic woes, and align policies accordingly

  • Attracting capital and production from China should take priority over tariffs and other hardline measures, according to an American economist
  • A second analyst argues for a more welcoming attitude when it comes to collaboration with innovative Chinese companies

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Falling property prices is just one of the problems causing weakness in the Chinese economy. Photo: AFP

Washington should use economic weakness in China to attract capital and production capacity from the country instead of keeping tariffs and other hardline measures in place, an American economist said on Thursday.

A weaker yuan, falling property prices, rising youth unemployment and other negative economic indicators in China give American policymakers an opportunity to attract companies, intellectual property and the wealth of individuals looking for more opportunity, said Adam Posen, president of the Peterson Institute of International Economics think tank.

“If the US were to reorient its policies … towards suction – not sanctions – it would be to both our and the world’s advantage because it essentially puts pressure on [Beijing] to either accept that there’s going to be outflows or they end up like their forebears, autocrats in the Soviet Union, in Latin America and elsewhere,” Posen said during an event hosted by Foreign Policy magazine.

The latter course, he said, leads to “putting up more barriers, trying to stem the outflows, which we know that makes people more nervous and more eager to get around them”.

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Chinese investors offloading overseas properties

Chinese investors offloading overseas properties

With predictions varying widely on how deep and prolonged China’s economic malaise will be, policymakers in Washington are bringing this factor into their thinking about what strategies are most effective in countering Beijing’s geostrategic influence.

Robert Delaney is the Post’s North America bureau chief. He spent 11 years in China as a language student and correspondent for Dow Jones Newswires and Bloomberg, and continued covering the country as a correspondent and an academic after leaving. His debut novel, The Wounded Muse, draws on actual events that played out in Beijing while he lived there.
Igor Patrick has worked in different media outlets in Latin America, mainly covering Brics and China. In addition to his bachelor's degree in journalism (PUC Minas), he holds two master's degrees from the Yenching Academy (Peking University) and Schwarzman Scholars (Tsinghua University). Before joining the Post, he was a fellow at the Wilson Center, where he wrote the book "Hearts & Minds, Votes & Contracts: China's State Media in Latin America".
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