China-US trade friction where nobody stands to gain

progress in high-quality development.

GDP growth rate of 6.3% is still within reasonable range. In particular, domestic consumption has shown strong momentum, contributing more than 60% to the economic growth and playing a key supporting role.

Indeed, trade frictions have adversely affected China’s economy, especially foreign trade, but China’s economy has demonstrated sufficient resilience and withstood the violent impact of trade frictions.

The Chinese economy will maintain stable and positive growth in the long term. Both the Chinese and the world economy would be better if not disturbed by the US.

Who will be the winner of the trade war?

There is no winner in a trade war. Indeed, the development of the Chinese economy has been affected to some extent.

The Chinese people are ready to fight a protracted war against outside disturbances, but it is deluding for the US leader to claim that “America is sure to win.” On the contrary, American people are first and foremost the victims of the trade war.

According to data from the US “Tariffs Hurt the Heartland” Movement, by April 2019, US companies and consumers had paid more than $22 bln in tariffs due to the trade war.

The uncertainties brought about by the trade war have dampened commercial investment and demand, reduced business confidence and capital expenditure, and dragged down America’s economic growth.

The growth rate of the American economy has slowed from 3% to 2%. In August, the American manufacturing PMI dropped below 50 to 49.9 for the first time in 10 years. Coupled with an inverted yield curve and drastic fluctuations of the stock market, these are all early warning signs of an

economic recession.

Impact on Cyprus

With the momentum for world economic growth already insufficient, the uncertainties brought about by trade frictions have further increased the downward pressure on the world economy.

The WTO has slashed the growth forecast of global trade in 2019 from 3.7% to 2.6%. The OECD estimates that global GDP may lose nearly $600 bln between 2021 and 2022.

The World Bank and the IMF have repeatedly lowered global economic growth expectations.

In the second quarter, the Eurozone economy grew by only 0.2%.

In particular, “Europe’s locomotive” German economy has contracted, and the Eurozone economic sentiment indicator has fallen to its lowest level in three years, with investor confidence seriously frustrated.

A German media outlet pointed out that currently, the risk of an economic recession is comparable to the global financial crisis 10 years ago, threatening employment and wellbeing of hundreds of thousands of people.

Such a recession will have a catastrophic impact on social solidarity and growth prospects.

Cyprus has a highly outward-looking economy and the international economic climate is crucial to its development.

The island has just recovered from the financial crisis and its economy is about to boom.

We hope Cyprus can work with China to safeguard free trade and multilateralism, oppose power politics and economic bullying, and create an international environment conducive to an open, inclusive and sustainable growth. Xingyuan Huang is Ambassador of the People’s Republic of China in the Republic of Cyprus http://cy.china-embassy.org/eng/