Beyond measure or a dent to GDP growth? How a trade war with US could hit China
Economists say expansion could slow by up to 1 percentage point in a tariffs battle – but if dispute spirals it will be ‘like putting a price tag on a world war’
China could lose up to 1 percentage point in GDP growth if its dispute with the United States is kept to a tariffs battle, according to economists, but if it turns into a full-blown economic war the country could sustain incalculable losses.
While it is too early to say just how damaging the dispute will be – the first round of US tariffs on Chinese products does not kick in until July 6 – the escalation of threats has brought the world’s two largest economies to the brink of a trade war. At stake is an annual bilateral trade flow worth US$635 billion and, broadly, an economic relationship that has underpinned globalisation over the last four decades.
Tu Xinquan, a trade expert at the University of International Business and Economics in Beijing, said the losses would be beyond measure if the US and China did end up in a trade war.
“It’s like putting a price tag on a world war ... there might be an answer but it will be largely meaningless,” Tu said. “China will of course suffer losses, but other countries may suffer losses as well if the whole globalisation process pedals back.”
