At first glance, the US seems to be holding the upper hand in the economic battle with China. However, some interim data on the trade balance proves the opposite. Washington always finds an excuse to underscore its advantage in the trade war. In the meantime, Beijing has learned the lesson from US President Donald Trump’s protectionist rhetoric. His tough anti-China stance assured Beijing to forge ahead with the process of replacing imports with locally manufactured goods that is clearly beneficial to the domestic economy in the long term.
Statistics is like an impartial judge who proves that China is outpacing the US in all key metrics. For example, Beijing ditched its commitments on US imports under the first phase trade deal signed in January 2020. Beijing has increased its trade surplus with the US by almost 25% since the start of Trump’s presidency. China’s economy was the first to expand after restrictive measures had been lifted. Remarkably, it is the only country among the 48 largest global economies where Q2 GDP surpassed the national economic output in the whole 2019. At the same time, the US economy logged the historic slump of 32.9% in Q2 in annual terms. On the forex front, the yuan is extending a steady advance for the second month in a row. Besides, China’s bonds are winning favor with global investors because of their rising yields. Last but not least, China’s manufacturing sector is obviously gaining momentum.
Pursuing the goal of disrupting long-standing ties between the US and China’s economies, Donald Trump eventually nudges Beijing to more independence. Beijing is going to benefit from this strategy in the next 5 years, analysts at Bloomberg comment on China’s economic prospects. This new economic policy is termed “dual circulation”. “Internal circulation” is focused on boosting China’s domestic market whereas “external circulation” refers to trade with other countries.
