Views:0 Author:Site Editor Publish Time: 2019-05-31 Origin:Site
While the impact of the Sino-US trade dispute on the Chinese economy will be negative, causing more damage to the Chinese economy than to the US economy, they will be manageable for China. I estimate the maximum possible damage, assuming that all Chinese exports of goods to the US are halted, at 2.4 percent of GDP. But the negative impact on China's real GDP and employment can be mitigated through an appropriate increase in domestic aggregate demand.
So there is no need to panic.
The Chinese stock markets have already taken a hit. As of the end of 2018, the shares on Shenzhen Stock Exchange had on average lost 30 percent, Shanghai 20 percent, and Hong Kong 10 percent. In contrast, the S&P 500 Index of US stocks did not suffer any loss on a whole-year (2018) basis.