US-China trade war impact
The impact of a trade war between the US and China is going to have implications for both economies and businesses, HSBC’s Helen Wong said.
“As a bank in China, we are looking closely at what sectors and clients are going to be affected, even before the tariffs come into force,” she noted.
Wong believes Chinese businesses are prepared to face a trade war. China has, for some years, been migrating from traditional export manufacturing and heavy industries to high technology, services and domestic consumption driven industries. Chinese companies have already set up shop in Vietnam and Thailand. “We’re talking to customers who want to move their manufacturing to other countries. We are very excited about the China-Asean corridor,” Wong said.
A full-blown trade war will have second order impact, such as on equity markets, forex markets and interest rates. China is actively countering that with policy changes. Last Week, People’s Bank of China reduced reserve requirements and said it was releasing more money into the financial system. China is clearly preparing for more monetary and fiscal policy tools to boost the domestic economy.