Economist: U.S. tariffs not hurting Chinese economy as expected

by Roby Brock ([email protected]) 836 views 

University of Arkansas Walton College of Business economist Mervin Jebaraj says China’s economy has been growing slowly for the better part of this decade and that the tariff war started by President Donald Trump isn’t impacting China as much as other factors are.

Appearing on this week’s edition of Talk Business & Politics, Jebaraj said 2010 was the last peak year for growth that China showed when it used to average 10-12% growth annually. Since then, annual growth has been sliding downward to around 6%.

“As the economy matures it tends to grow more slowly and you tend to have growth rates like you see in more developed economies, so China’s not quite there yet to be a developed economy,” he said, noting that developed economies average 2-3% annual growth. “They’re still maturing but they’re a lot more mature than where they used to be 10, 20, and 30 years ago.”

“The trade wars have slowed the Chinese economy down, but that’s not the reason why you see these headlines for the Chinese economy slowing,” Jebaraj added. “The Chinese economy has some long-term growth issues outside of the trade war and the short term impact that it’s having right now. Some of that has to do with the debt load of the companies in China and local governments in China, and the other major important factor in China is that their workforce is aging and some of the hangover effects of the one child policy that they’ve had in place for many years means that there isn’t a lot of young people coming in to replace that workforce.”

Jebaraj said exports have definitely slowed since the U.S. began imposing tariffs on China, but they are benefitting from new trading partners.

“Obviously Chinese exports to the United States are down, but at the same time we’re starting to see Chinese exports to other countries go up, so it’s not entirely clear that they’ve had a huge hit. Of course it has affected them, probably more than it’s affected the United States economy, but it’s not possible to say that the Chinese economy has been pummeled by any means by the trade war,” he said.

You can watch Jebaraj’s full interview in the video below.

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