China’s senior-most banking official has weighed in on the ongoing Sino-US trade dispute.
In a speech published by the Chinese central bank Guo Shuqing (郭树清), head of the China Banking and Insurance Regulatory Commission (CBIRC) and party secretary of the People’s Bank of China (PBOC), outlined several reasons that the imposition of extreme tariffs by the US against China will only have an “extremely limited impact” on the Chinese economy.
“Firstly, the vast majority of products exported to the United States are highly suited for domestic sale, and China is currently in a period of rising consumption, rapidly developing a huge market that will absorb a large portion of these products,” said Guo.
“Secondly, market diversification has achieved major progress, and the Belt and Road initiative is seeing results, with markets outside of the United States welcoming more Chinese products.
“Thirdly, a significant percentage of products will still be exported to the United States, some because replacement products can’t be found, and some because profits are ample enough that US importers are willing to split the costs.
“Fourthly, the upgrade of China’s industrial structure requires that a significant volume of production shift abroad, which will accelerate China’s high-quality growth.
“Fifth, China’s financial markets were already excessively impacted in 2018, and at present their resilience has increased markedly, so that further shocks will not be that significant.”
Guo said that China remained committed to further reform of renminbi exchange rate mechanisms and greater opening of the domestic financial market, while also denying accusations that Beijing engaged in “state monopoly capitalism.”