Fan Gang Talks about Sino-US Trade Tension, Opening Up and Chinese Macro Economy

Any country needs to react on the trade friction or trade war. In the regard of trade deficit, President Trump is not focusing on trade related issues. He is targeting intellectual property rights, China’s high-tech industry, “Made in China 2025” development strategy which are really about growth, development and emergence of China.

In the long-term, Sino-US trade tension definitely will cause negative impact for both America and China, as well as other countries since China is part of the supply chain.

We need to understand that the long-term interest is to enjoy long-term continuous and sustainable growth. In time people will get used to China’s growth. Now they are not used to it yet.

In terms of further opening up of China, it is a fundamental interest. We have been opening up in the past 40 years. As a result, we became stronger, and more used to international market, its risks, fluctuations, and sometimes crisis. As we are more sophisticated in dealing with these risks, we can open further. And as we grow up we need to take responsibilities for human kind and global community. Further opening up implies a lot of tasks at hand, for example, composition of new policy; then afterwards people need to adapt to the new institution. It’s not easy but it’s time.

As to Chinese macroeconomic development trend in the near future, we should know that there is risk in the economy at any given time. We are already at the bottom, part of, not a V curve, but rather a L curve. Now we are on the vertical line at the bottom, which is not long, but we still have some distance to go. In other words, we are in the process of bumping at the bottom and cannot immediately bounce back to high growth. This cycle is a normal process. Hopefully we can use this opportunity to fix our problems, e.g. overcapacity and financial risk, in order to have better growth in the next stage of economic development.