Economic Aspects Chinese Policymakers Must Solve Now

The trade war between Washington and Beijing is escalating and it will have an enormous impact on the Chinese economy. China said the US spurred the “largest trade war in economic history” under Mr. Trump, Xinhua news agency reported, as the US president threatened tariffs on all $505bn of Chinese imports. The world’s two largest economies have been engaged in a tit-for-tat battle over trade, sparked by US concerns over China’s industrial policies, including the forced sharing of technology.

Business observers expect an advancing inflation for all the China made products in the coming years, as Chinese government responding with the additional tariffs on agricultural items and natural resources for which China depends on the USA suppliers. The latest quid-pro-quo move from China will likely to give better ground to other nations competing with China.

Although China’s once-booming growth rates have slowed markedly in recent years, it is still on track to overtake the United States as the world’s largest economy sometime around 2030, according to a raft of respected researchers. It is the high time for the Chinese authorities to take some of the drastic measures to revive their economy and restore the stability in the manufacturing sector of China.

Here is a list of points China should look after to revive its economy

(A) China needs to solve the deepening debt crisis

China’s economy has always depended heavily on investment into fixed assets such as roads, railways and apartment complexes. But over the last couple of years the deepening debt crisis has an adverse impact on the economy and the US trade embargo will itensify this problem even more. It is advised by the economist that China should take appropriate measures to solve the deepening debt crisis in order to stabilize the economy.

(B) Overall reform required

The strengthened efforts to promote deepened overall reforms, the simplifying of administrative procedures and the delegating of central government power to lower levels of government, along with innovation-driven development, the rule of law, and the fight against corruption, are all contributing to the establishing of a governance system that can ensure China’s sustainable and healthy economic development.

(C) Investment in the social development

Along with the negative effect of the US tariffs, the excess, waste, and dysfunction seemingly pervade the entire social system of China. And a rapidly aging population poses an unavoidable economic challenge that the country seems ill-prepared for. In spite of all these adverse impact, it has been noted that on a number of occasions over the last 40 years, China has managed to defy expectations and reform its way to economic success. This time China needs to invest heavily on the social development to curb the menace of economic slowdown.

To cushion the economy and revive investment, China has sped up infrastructure spending and kept liquidity in the financial system ample. With the U.S. trade tariffs clouding the outlook to growth, Chinese policymakers should try to find solutions that will strengthen the present economic condition of the country.

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