90-day trade truce is an op­por­tu­nity not to be wasted

China Daily (USA) - - COMMENT -

Ed­i­tor’s note: The fact that the lead­ers of China and the United States have agreed to sus­pend the im­po­si­tion of new tar­iffs and con­tinue bi­lat­eral ne­go­ti­a­tions on trade has re­duced the pres­sure China faces in pro­pel­ling its on­go­ing re­form. Guan­cha.cn com­ments:

The agree­ment is good news as the ex­change rate of the ren­minbi will sta­bi­lize and peo­ple will gain more con­fi­dence in the mar­ket.

Chi­nese pri­vate en­ter­prises will be more con­fi­dent too, be­cause the tar­iffs that have al­ready been im­posed have cre­ated an ad­di­tional bur­den on them. With the like­li­hood of ad­di­tional tar­iffs be­ing im­posed, the out­look must have seemed bleak for many.

The agree­ment also al­lows China to solve its in­ter­nal prob­lems to en­sure the pros­per­ity of its econ­omy. The Pur­chas­ing Man­agers’ In­dex, widely con­sid­ered the barom­e­ter for the health of a coun­try’s man­u­fac­tur­ing in­dus­try, was 50.2 per­cent in China in Novem­ber. If the PMI is lower than 50 per­cent, man­u­fac­tur­ing would be con­tract­ing.

But the agree­ment is not good news just for China, it is also good news for the US, be­cause its econ­omy is also un­der heavy pres­sure. Its stock mar­ket in­dexes dropped markedly in Oc­to­ber, threat­en­ing to be­come a bear mar­ket. And US farm­ers, es­pe­cially those grow­ing soy­beans, have suf­fered be­cause of the re­tal­ia­tory tar­iffs im­posed by China.

The Don­ald Trump ad­min­is­tra­tion faces huge po­lit­i­cal pres­sure, too, be­cause the Democrats have al­ready taken con­trol of the House of Rep­re­sen­ta­tives in the midterm elec­tions. Be­sides, the Trump ad­min­is­tra­tion has al­ready aroused many de­bates over its poli­cies, which fur­ther in­crease the pres­sure they face.

In one word, the agree­ment reached by the two coun­tries’ lead­ers is good news for both, and it is good to see the US lead­er­ship act­ing in a more ra­tio­nal way. Let us hope ra­tio­nal­ity will guide them in the ne­go­ti­a­tions to come.

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