US vs China Trade War: Who Will be the Winner?

written on 23rd of October, 2018


The war between two economic giants of the world is still going on. Starting from an early March upon Trump’s decision to increase tariffs for certain products imported from China, the show keeps going on as China is taking a revenge by doing the same thing for some U.S products exported to China. Even though the war has many bad impacts for both countries and the world, those two countries still do not want to put the war to an end.

As the hottest global issue for the time being, the U.S-China battle has certainly left a big question for the world on who will be the winner and who will end up as a loser. Recently, a global survey has been conducted by Bloomberg to predict who has the more to lose in the one of the biggest trade war in economic history. It shows that most of the respondents assume that U.S will suffer greater financial loss than China. The data statistic reveals that 20 per cent of middle to senior level company employees around the world predict that the U.S’ economy will fall harder than China’s, while 14 per cent predict that China will end up as a loser. One’s losses is definitely one’s victory on the other side. Another result shows that 34 per cent assume that the trade war will impede the global economic’ growth, while 13 per cent opine that it will improve both countries’ relationship.

It is a fact that trade war is causing a global uncertainty since it may affect the global economic and politic sustainability. The survey shows us that financial crisis, political and social instability are the three biggest issues to which the world is paying attention. Political and social stability is chosen by 65 per cent of Chinese respondents and 62 per cent of US respondents. While for respondents in Singapore, the UK and South Africa, the top list is the worries over financial crisis.
Conducted in September, the survey polled 2,000 business professionals from 20 countries. China is predicted by 86 per cent of them to be the top economic powerhouses in the next 10 years. The other nominees are US and Japan, selected by 70 and 36 respondents respectively.  Three quarters of respondents insist that the government should be the main leader solving the world’s economic problems, whereas only 10 per cent believe that the private sector should take over the government roles in solving the world financial problems.

In global trading regime, the survey found that workers in china have greater assurance to dominate it. 71 per cent of Chinese respondents said that the regime will get better in the long term, while the global average is only 50 per cent. The recent global trading system regulated by the World Trade Organization has been more concentrated since The President of The US took office. The Trump administration has hit a 25 per cent tariff on US$50 billion worth of Chinese imports and 10 per cent tariff on US$200 billion of Chinese goods. On the other side, China took revenge by setting tariffs of 5 to 10 per cent of US goods and 25 per cent fee on US$50 billion of US import.
The International Monetary Fund (IMF) predicted that this trade war would make China lose their GDP by 1.6 percentage points as well as the US with the loss of 0.9 percentage points in 2019. Meanwhile, the IMF estimates the decreasing of world economic growth from 2018 to 2019 by 0.2 percentage points to 3.7 per cent due to the trade war tensions. Besides, China reported its GDP extended by 6.5 per cent year on year (yoy) in the third quarter, the lowest progress since 2008. Meantime, the Shanghai Composite Index has depressed by 23 per cent to its lowest level since November 2014.

From all the data collected and analyzed, it can be concluded that the U.S economy is predicted to remain greater than China. However, there is no winner or loser in this war. As Mr Jokowi said in the IMF-World Bank annual meeting held in Bali (12/10/1018) that the defeat or victory in a war always resulting in the ruination of the world. There is no meaning on being the superpower among the drowned world. There is no meaning of victory that is celebrated among the destruction of the world.




References

South China Morning Post.Yujing Liu.Monday, 22 October 2018, 8:01 a.m
https://amp.scmp.com/business/china-business/article/2169524/bloomberg-survey-offers-insight-who-will-fare-worse-us-china

pic: rawf8 / alamy stock photo
https://www.alamy.com/usa-and-china-trade-war-us-of-america-and-chinese-flags-crashed-containers-on-blue-sky-background-3d-illustration-image211686441.html