The Chinese economy has transformed from being exports-oriented to being domestic demand-driven and should hold steady in the ongoing trade friction with the United States, claims Zhou Shijian, a senior researcher at the Tsinghua's Center for US-China Relations.
US President Donald Trump apparently decided to slap tariffs on Chinese goods because he believes China relies more on its exports to the US than the other way around, yicai.com reports. “China will pull through, as its strong domestic consumption has already become the most significant driver of economic growth,” argues Zhou, refuting the American claim.
Zhou told the portal that China had spent the past decade completing its transformation into a domestic demand-driven economy. Its degree of dependence on foreign trade dropped from 64 percent in 2006 to 33 percent last year, lower than the world average of 42 percent. The proportion of its current account surplus to gross domestic product dropped to 1.3 percent in 2017 from 10 percent a decade ago.
China cut tariffs on some imported products – including cars and car parts – early this year. More cuts are yet to come. China also recently moved to relax market entry by reducing restrictions on foreign investment in certain fields, according to Zhou, who predicted this would boost domestic consumption.
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