The state planning authority says that the potential impact on China’s economy of ongoing trade frictions with the US are “limited and controllable.”
Worsening trade tensions between China and the US have rattled international markets, with both countries currently engaged in an escalating round of tariff slaps after the Trump administration mooted a 25% levy on as much as USD$150 billion in Chinese imports.
Despite widespread market concerns the Chinese government is putting on a brave face, with the National Development and Reform Commission (NDRC) downplaying the potential impacts of trade fractions.
At a routine press conference held on 18 April, Yan Pengcheng (严鹏程), NDRC spokesperson said “Sino-US trade frictions have a limited impact on the performance of the Chinese economy, and the impact is controllable.”
“The NDRC has the confidence, the conditions and the capability to maintain steady economic performance.”
According to Yan the “Chinese government has sternly expressed its principled position on multiple occasions…we are aware that various sectors of society are highly concerned that Sino-US trade frictions could have a sizeable impact on the macro-economic performance of China.
“With regard to this issue, everyone knows that trade protectionism is a ‘double-edged sword.’
“On the one hand US trade protectionist measures will cause the exports of enterprises in some of China’s industries to be significantly impacted, and pressure on employment will increase.
“On the other hand, US consumers and producers in related industries will also inevitably pay a corresponding price.
“We have already prepared response plans and policy back-ups, and our overall assessment and analysis is that the impact of Sino-US trade frictions on China’s economic performance is limited, this impact is controllable, and we have the confidence, conditions and capability to maintain steady economic performance.
“The reason we have such confidence is that over the past several years we have vigorously promoted adjustments to the economic structure, vigorously shifted the growth model and expedited a shift from old to new drivers.
“Internal demand plays an increasingly important role in driving economic growth, and over the past several years the contribution rate of domestic demand to China’s economic growth has risen to 105.7%…in the first quarter of this year the contribution rate of domestic demand to economic growth reached 109.1%.
“This is because we possess a vast domestic market of nearly 1.4 billion people, and if it’s dark in the east then it’s bright in the west.
“We possess sufficient capacity and measures to respond to any internal or external shocks…because we have accumulated experience in responding to complex conditions over the past few years, there is considerable room to manoeuvre when it comes to macro-economic policy.”