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US-China Trade War: Why the Prospects Remain Low

© REUTERS / Jason LeeUS 100 dollar banknotes and Chinese 100 yuan banknotes are seen in this picture illustration in Beijing, China, January 21, 2016.
US 100 dollar banknotes and Chinese 100 yuan banknotes are seen in this picture illustration in Beijing, China, January 21, 2016. - Sputnik International
Commenting on the recent remarks of high-ranking Chinese officials that Beijing would opt to settle its trade disputes with the US through dialogue and consultations, Chinese economist Chen Fengying explained to Sputnik why the prospects of a trade war between the two countries are now highly improbable.

Chinese President Xi Jinping watches during a gift handover ceremony at the United Nations European headquarters in Geneva, Switzerland, January 18, 2017 - Sputnik International
On Top of the World: China Claims to Lead the Globe While US Gives the Ground
As the US President-Elect prepares himself to be sworn in later on Friday, China has vowed that an economic confrontation with the US would hurt both countries due to their interconnected interests.

The comments came amid growing concern and speculation in global markets about a possible trade war between the two countries. During his election campaign, Donald Trump promised to impose tariffs of up to 45 percent on Chinese imports.

He has also vowed to bring US factories back home and create more job opportunities.

A day before his inauguration, China's Ministry of Commerce spokeswoman Sun Jiwen reiterated that economic cooperation between China and the US benefits both countries.

"We believe that the two countries can solve their trade problems through dialogue and cooperation," Sun said at a press conference on Thursday.

Earlier on Tuesday, Chinese President Xi Jinping acknowledged during his speech at the World Economic Forum in Davos that "no one will emerge as a winner in a trade war."

Yuan banknotes and US dollars are seen on a table in Yichang, central China's Hubei province on August 14, 2015 - Sputnik International
China Hopes to Resolve Trade Disputes With US Through Dialogue
Alibaba founder Jack Ma also addressed the issue at the World Economic Forum. Speaking there on Wednesday, he warned China and America to think very carefully before starting a trade war.

"A trade war would be a disaster for the world," Ma said. "It's very easy to slip into a trade war."

Still, Ma said that the governments of America and China and the business communities of both countries should do whatever it takes to stop a trade war. If he faced a choice between keeping his company alive or averting a trade war, "I would shut Alibaba down," he said.
"Everyone should do everything they have to to make sure that doesn't happen."

Commenting on the recent remarks of the high-ranking Chinese officials, Chen Fengying, Director of the World Economy Institute of China's Institute of Contemporary International Relations told Sputnik that Trump's electoral remarks could have alarmed China some ten years ago, as it was highly dependent on the US in its trade and economy.

"However nowadays both countries are almost equal in their might. China is gaining its economic heft while the US is keeping it at the same very level," she told Sputnik.

The Chinese economist also pointed out that Donald Trump is a businessman, first and foremost. Hence his usual tactic is first to scare his opponent before the start of the negotiation process, to be able to get a psychological advantage.

"His tremendous roar does not mean that he will then undertake any actions," she said.

Chen Fengying further pointed out that trade and economic relationships and mutual profits are deeply intertwined. If the two countries are able to maintain balance between profits and losses, there will be no grounds for any full-scale trade war.

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