Editorial: US’ 4.1 % growth far from being trade war weapon
“We’re on track to hit the highest annual average growth rate in over 13 years,” US President Donald Trump tweeted after the US economy grew by 4.1 percent in the second quarter, the highest growth rate since the 4th quarter of 2014.
Analysts believe that this growth rate might boost the confidence of Trump in the trade war against China.
In the second quarter, the US GDP grew by 2.8 percent year-on-year in the upward period, while that of China rose by 6.7 percent year-on-year in a lower position of the economic cycle.
But the 4.1 percent growth was the best the US can do by adopting multiple policies to stimulate the sector while China’s growth rate was a concrete fruit after the country cut overcapacity and reduced public expenditures.
Who holds more confidence? That is an interesting question.
China has entered the era where the growth and upgrading of consumption is largely driven by the country’s expanding middle class group. It can be well explained by the fact that more and more Chinese cities are launching traffic restriction campaign as a result of the soaring number of private vehicles, and the difficulty to buy a high-speed train ticket at weekends and on holidays.
Modern consumption is sweeping the whole China. The ever-developing infrastructure, and especially the Internet, is connecting the 1.4 billion population into an unprecedented huge market. It won’t take a long time before the US becomes ashamed when comparing its market size with that of China.
The American market potential and the energy it provides to propel economic growth in the future cannot compare to those of China. In 2017, China’s retail sales was almost the same as that of the US, which was a turning point in the sector. The US won’t stand a chance to reclaim the crown as the biggest market once losing it.
Without a great market potential, the economic growth won’t stay sustainable. Even when a high growth rate is created, it is nothing but abnormal data inflation, and can be easily destroyed by an economic crisis.
Only by expanding cooperation with China and turning China’s market potential into a long-term impetus for its economic growth can the US economy have a future. Showing off the 4.1 percent growth rate of just one quarter is like holding a lollipop in a sugarcane field.
The Trump administration is wishing to export more soybeans to the European Union in order to mitigate its loss after China raised tariffs on imported US soybeans. However, it cannot fool the US farmers long because the EU has only a few hundreds of millions of people most of whom are overnutritioned, while China is a country with enormous population and is elevating dietary structure toward higher level. Losing the Chinese market, the US agriculture will definitely turn gloomy.
The 4.1 percent growth rate was achieved before the influence of trade war starts to work. It should indeed make the Trump administration feel pressured and worried because the trade war will gradually produce its impact as it goes in full swing, and theoretically the pickup period for the US economy will soon come to an end. In this respect, no one can guarantee that the trade war will not be the last straw to end the US economic bubble.
The US has been the world’s largest market for too long and China is bound to replace it. But the US can still keep its position as the global center of innovation and lead the high-tech development of the world.
Instead of developing a zero-sum relationship with China, the US needs to align with the latter, the largest potential market in the world. By agitating the sentiment of containing China, Trump’s aides are misleading him and will likely lead the US onto a risky path of confrontation.
China’s development advances with time. The new round of rejuvenation is largely supported by people’s strong desire for a better life and the Chinese culture of always pursuing for better future. The leadership of the Communist Party of China has strengthened political cohesion of the country and made it capable of handling all challenges in a calm manner, including the trade war.
The 4.1 percent growth rate has made the White House float on air. But the figure is not extraordinary for China, a country which has seen 40 years of reform and opening-up. China will not envy the figure, and instead, it will analyze the strengths and weaknesses of both sides.
China is not afraid of a prolonged trade war and is confident that the longer the trade war becomes, the higher possibility the US will call for an end to it for being unable to withstand the pressure that comes along.
(People’s Daily/Global Times)
