Connect with us
The clever new way to send money abroad

China

Economic Stakes are High for US-China Tensions

US assumptions around the eventual convergence of these two systems have radically shifted, hence Trump officials believe a re-orientation of long-standing economic and political arrangements that have brought these nations closer together is now required

Published

on

Geopolitical Changes are Afoot These developments coincide with a series of major speeches on US-China relations by key members of President Trump’s administration.

The essence of these pronouncements is that US-China relations are nearing an irreconcilable impasse, arising from the two nations’ vastly different systems of governance and economic management.

US assumptions around the eventual convergence of these two systems have radically shifted, hence Trump officials believe a re-orientation of long-standing economic and political arrangements that have brought these nations closer together is now required.

China’s position is that the normalisation of diplomatic relations has always been premised on an understanding that there are stark differences in each country’s social systems, but even greater shared interests.

US elections looming in November mean that one major source of uncertainty is whether the Trump administration will have time to enact such a reorientation.

Another key question – under a Trump re-election – would be how these policies would be implemented. Economic Linkages vs Political Brinkmanship.

We believe tensions will persist regardless of the outcome of the US elections, as reflected in sharply changing American attitudes towards China in independent polls.

At the same time, China’s vast global supply-chain linkages and extensive US business interests in China are likely to serve as a moderating force.

The extent of these linkages include:

i) USD1.2 trillion in combined assets and USD625 billion in annual sales from US and Chinese multinationals operating in each nation’s respective territories,

ii) a bilateral trading relationship worth over USD600 billion, and

iii) significant value-added content from both Chinese and American suppliers in each respective domestic economy.

https://www.fitchratings.com/research/sovereigns/china-perspectives-economic-stakes-are-high-for-us-china-tensions-13-08-2020

Click to comment

Leave a Reply

Economics

China’s new three-child policy highlights risks of aging across emerging Asia

Thailand’s (Baa1 stable) total dependency ratio is set to jump nine percentage points to 51% by 2030 – a faster increase than China’s – which will pressure public and private savings through higher taxes and social spending, reducing innovation and productivity gains.

Published

on

Street vendor in Bangkok

Population aging in China (A1 stable) and other emerging markets in Asia will hurt economic growth, competitiveness and fiscal revenue, unless productivity gains accelerate, according to a new report by Moody’s Investors Service.

(more…)
Continue Reading

China

Clear skies over Asia’s new foreign investment landscape?

Published

on

Compounding the fallout of the US–China trade war, the global pandemic and recession have caused considerable speculation on the future of foreign investment and global value chains (GVCs). But though there is likely to be some permanent change, it will probably not be as great as politicians expect.

(more…)
Continue Reading

Most Read

Recent