Here’s why China signed the Trump trade deal: Growth has slowed to a 30-year low

Trump leveraged the massive U.S. market to press for Chinese trade reforms

By Tank Murdoch

(TNS) China’s rise over the past three decades has come mostly from its massive trade advantages with its largest market, the United States, and no one understands that better than President Donald Trump and his economic and trade team.

Year after year, China ran huge trade surpluses with the U.S. to the tune of hundreds of billions per quarter, fueling the Asian giant’s military and geopolitical rise.



And while the Trump administration’s policies towards China do not include containment — the U.S. policy towards the Soviet Union during the Cold War — the president is determined to ensure that the Chinese no longer are free to pick the pockets of American corporations and businesses, while using American consumers to finance their own demise.

That’s what’s at the heart of the president’s tariff strategy with China: To force Beijing to play on a much more level playing field — the same one all great global powers use — or pay a price financially.

By any measure, the president’s strategy is working. In addition to Congress finally passing the historic NAFTA renegotiation — the U.S.-Mexico-Canada Agreement — China sent a trade delegation to Washington, D.C. this week to sign “Phase One” of a new trade deal with America that is, on paper anyway, going to be a boon for American farmers and businesses.

Why would the world’s No. 2 economy feel compelled to essentially destroy its own golden goose? Because Beijing had little choice: It was either sign or continue to see the Chinese economy contract, which would no doubt contribute to domestic unrest, something the Chinese Communist regime continually fears.

The Wall Street Journal reported Friday that the Chinese economy has contracted the most in 30 years, and without some trade tariff relief, the downward trend was likely to continue:

A newly sealed trade truce with the U.S. reduced a key source of anxiety for Chinese policymakers but leaves them with another challenge: a need to boost consumer and business confidence as the country faces more downward pressure on its massive economy.

On Friday, Chinese officials said the country emerged from 2019 with an official economic growth of 6.1%—well within the government’s target range of 6% to 6.5% but the lowest level in nearly three decades.

The outlook remains cloudy, and some private-sector economists warn that growth in the world’s second-largest economy could slip even further this year, to below 6%.

Trade, investment, consumer spending and business confidence are all on retreat, while the economy continues to suffer indigestion from debt that had helped fund its remarkable bulk-up and is proving difficult to slash. The country also faces longer-term stresses like an aging population, which was highlighted by Friday data showing births had fallen to their lowest level since 1961.

Last year’s trade offensive from its chief economic and geopolitical rival, the U.S., in the form of tariffs and a campaign targeting China’s corporate champions, presented a headache for Beijing’s policymakers, taking a toll on exports and business confidence throughout the year. Nomura economists calculate the trade war, coupled with slower global growth, shaved one percentage point off China’s 2019 GDP figure.

Granted, China’s economic growth at about 6 percent is more than double the current U.S. GDP growth rate of about 2.8 percent (Trump want’s 3 percent-plus), but when your economy is still maturing, you’ve got a lot of growth room.

That said, any economist worth his or her salt now has to admit the president’s trade strategy with China has been successful — and, coupled with the signing of the USMCA, two more campaign promises kept.

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.50cal
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.50cal

Hopefully, that new Red chinese cornovirus will prune down their population.

Roger
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Roger

Liberal idiots will never know, lib media will never report it, but that’s why China signed the Trump trade deal. He had them by the balls. He planned it, he took the fall-out – and he won the day.

.50cal
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.50cal

Made in U.S.A. = America First.

Do your part —avoid cheap products that fall apart by design.

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