中华脉搏 | C h i n a B e a t
THOMAS DENG Regional Chief Investment Officer & Chief China Strategist UBS Global Wealth Management
ratcheted up the pressure by tightening foreign investment in 27 critical tech sectors
(including
semiconductors,
aircraft and biotech) and has introduced “poison pill” clauses in the new USMCA trade deal, implicitly targeting China. China has responded with retaliatory tariffs of 5–25% on USD 110bn worth of US goods, nearly 70% of total US imports. Despite the recent truce, a gradual decoupling of the two economies and supply chains splintering along regional lines seems the most likely outcome in the long run. A full-on cold war in trade or security still remains only a tail risk, in our view, given the economic ties and cultural inter-dependencies of the two countries.
C
hina-US relations are in uncharted waters and are likely to get more
complex and challenging in the years
30
HUNKERING DOWN TO ENSURE DOMESTIC STABILITY By
most
accounts,
Beijing
has
ahead. The base scenario we foresaw was
miscalculated the severity of the US trade
a long cycle of fight and talk over a broad
conflict as well as the effect deleveraging
range of economic and security issues.
would have on the private sector and local
The recent G20 meeting between Chinese
government
President Xi and U.S. President Trump
China has since reversed course and
and the pause in tariff escalation is a point
shifted to policy easing in late July, and
in case. Still, a comprehensive rollback
further measures – relating to state owned
of tariffs looks elusive at this stage. The
enterprise reforms, market access and tax
US currently maintains tariffs on a total
cuts – are likely to be announced over the
USD 250bn worth of Chinese imports, has
next few months.
华商 | C H I N E S E E N T R E P R E N E U R
infrastructure
spending.