China’s new economic normal
Panel session at the 13th Asian Bond Markets Summit highlights China’s future development and impact on Asia in light of slowdown and trade war
Chengdu, China - There is no doubt that after experiencing rapid growth over the past decade China is entering into a new phase of development with lower growth and a GDP growth rate of 6.3% forecast for 2019.
Coupled with the uncertainties around current and future Sino-US trade tensions and the spectre of inflation, there could be more bumps ahead in the road for overall Asian economic expansion. These were some of the major topics discussed at a panel session at this year’s The Asset 13th Asia Bond Markets Summit held in Chengdu, China.
“China's GDP growth slowdown is mainly driven by government's deleveraging and external factors including global growth slowdown and tightened global finance conditions,” explains one speaker on the panel.
According to a live poll held at the summit, a majority (60%) of participants felt that the US-China trade war would be the biggest negative factor on China’s GDP growth.
However, most speakers on the panel were quick to stress that the economic friction between the US and China would spell further uncertainty ahead for Asia. “Asia can only lose during this US-China trade war due to lower business confidence in Asia,” highlights one speaker.
Another speaker believes that business confidence could affect the US as well in the long run. “The US's loss will definitely be smaller than China but if you take negative impact on confidence into consideration, the US could also be affected.”
Despite the external factors, panelists believed that China will continue to push forward with reform whether it be opening up its capital market to foreign investors or ensuring stability going forward.
“The biggest positive thing from China's structural reform is technology development. China is now quickly upgrading its technology. The trade war will provide strong momentum to China's technology upgrading,” says one speaker.
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28 May 2019