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The ongoing China-US game
——Zhu Bin, Economist from Nanhua Futures Co., Ltd.

2020-11-03 13:04:25

Mr. Zhu analyzed the situation of Sino-US trade from three aspects.
1. American issues
The United States is divided in many ways. The first is the division of parties. Since the 1960s and 1970s, the gap between the Republicans and the Democrats in the United States has grown. The second is that the proportion of wealth held by Top 0.1% in the US has been increasing since the 1970s. The third is that the distribution of wealth in the United States is extremely polarized. The top 10% of the population sits on 83% of all equity funds, and the bottom 50% of the population only owns about 2.08 trillion US dollars, accounting for about 2% of the country's overall family wealth. The wealth of the world's richest 2,189 billionaires jumped to 10.2 trillion US dollars in July, far exceeding the 8.9 trillion US dollars at the end of 2017.
The U.S. government is under tremendous pressure to adjust this imbalance. The U.S. fiscal deficit is expected to exceed 3 trillion in 2020, accounting for nearly 15% of GDP, the highest in history. Trump's countermeasures against this are to "slam globalization," "inspire populism," and "pass on domestic contradictions."
2. Sino-US game
Mr. Zhu explained and contrasted some changes in Sino-US relations from many aspects. After going through various crises, Sino-US relations have gradually changed. From the perspective of global power, the power gap between China and the United States is getting smaller and smaller. After the 1960s and 1970s, China's overall power increased, while the United States was in decline. Among the eight major factors affecting China's strength, the military, trade, and innovation and reform rank the top three respectively. At the same time, the nominal economic aggregates of China and the United States are rapidly approaching. In terms of purchasing power, China has surpassed the United States in 2016. The United States has missed the best time to contain China. In general, the difference between China and the US GDP will determine the outcome of the game.
3. China's response
Mr. Zhu explained China's response from the perspective of dual cycles. The double cycle refers to the two major themes of the international cycle and the domestic cycle. China's strong manufacturing capacity, huge consumption power brought about by a huge population, and automobile sales in China and the United States are the basis of the domestic cycle.

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