We May Have Another Recession If US-China Trade Spat Continues, Says Advisor To Chinese Govt
The tariff imposed by the US is going to increase the cost for both India and China and will eventually dampen the confidence and investment.
Representative image. Image: REUTERS
New Delhi: No country would be spared from the ongoing trade war between the United States and China, a top advisor to the Chinese government said.
Wang Huiyao, the founder of global think tank Center for China and Globalization, said that the tariff being imposed by the US is going to increase the cost for both countries and will eventually dampen the confidence and investment.
“And if that continues, it will disrupt the world economy and also particularly interrupt the world value chain,” he told News18.
Wang said that a lot many products are made in China, and the required material comes from other countries like Japan, Korea and India. “If the US levies tax on that, hitting China is one thing but will also hit the rest of the producers, raw material providers.
“It’s going to be very bad is this continues. We may have another world recession,” he added.
He also called on other countries to safeguard the multilateral system and allow free movement of goods. Underlining that they don’t pursue unilateralism, Wang requested both New Delhi and Beijing to deepen their cooperation to fight trade protectionism.
Wang also opined that the trade war was not going to keep any country safe, not even India, making it all the more imperative for the two countries to increase trade. “Soft power of India is very strong. China should tap into it: increase tourism, import more movies, have more cultural and think tank exchanges.
“We need to change the narrative of both the countries. We are in the same boat and we have so much in common. Plus, India is a talent hub. India needs a lot of talent. China is ageing and there needs to be more collaboration between India and China. China is getting old before getting rich. For example, the average of construction workers in China is 40-45 years old. It is imperative for China and India to work together,” he further said.
Wang was also of the opinion that India should be part of Xi Jinping’s ambitious Belt and Road Initiative. “India and China are two of the fastest growing countries and it only makes sense for them to work together. India should be part of the BRI. The sovereignty issue should be resolved with dialogue,” he said.
Wang also suggested for China to stimulate its domestic economy and mark a shift in practisings been practicing so far: the export-based economy.
“Now, China’s middle class is growing. In the next 5-10 years, China’s middle class will reach around 400-500 million. Also to stimulate domestic consumption, it must speed up reforms for the domestic economy. They should also really do more with ASEAN, with India, do more with Africa, they should diversify their trade with the rest of the world,” Wang concluded.
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