U.S.-China trade war could benefit China in long run: expert

06/19/2018 10:43 PM
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Hong Kong, June 19 (CNA) A trade war between China and the United States will impact the existing industrial chain in the Asia-Pacific in the short-term, but could benefit China by forcing it to reorganize its industry in the medium to long term, according to an expert Tuesday.

Tse Kwok Leung (謝國樑), head of Policy and Economic Research at Bank of China (Hong Kong), said the industrial chain in the Asia-Pacific includes China, Association of Southeast Asian Nations (ASEAN), Japan, Hong Kong and Taiwan, which have long been linked to the U.S.

Hence, a trade war between the U.S. and China will, in the short term, impact the Asia-Pacific industrial chain which has taken shape over many years, he pointed out.

It now appears that a trade war is highly likely as China will retaliate over the U.S. imposing tariffs on its products, he said, adding that the next step is to see whether the two sides choose to escalate the conflict.

In the short term, both China and the U.S. will lose out and be affected by a trade war, he said, noting that other countries and regions in the Asia-Pacific industrial chain will also be impacted.

However, in the medium to long term, if the trade war is drawn out, China could use the opportunity to adjust its industrial and export structure, which would be good for the country, Tse noted.

As for whether other countries will support the U.S., Tse said most countries in the world respect the rules of the World Trade Organization and use it as a basis for trade with China.

Those countries are likely to continue to observe the rules, he added.

(By Stanley Cheung and William Yen)


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