Welcome to the May 30th Friday edition of “News Insight,” where we uncover the news. Our special guest for this episode is Fan Jiazhong, a professor of economics at National Taiwan University, hosted by Zhang Dongxu.
Today’s focus: Has the U.S.-China trade war ended? Has China escaped the trap? Not quite! Why did Trump invoke the IEEPA? Is China unable to develop domestic consumption? What are the consequences of continuing to rely on a supply-oriented economic model? With China’s dumping spreading like a plague, countries are fortifying their defenses to block it!
Trump’s global tariffs, embroiled in court battles, faced setbacks but then had a dramatic turnaround and became effective again. Will this accelerate Trump’s pressure on China? If tariffs are overturned, can they still prevent China from shifting production globally?
As financial risks loom over China, the six major state-owned banks are facing increasing troubles. Could Communist China be heading towards a era of negative interest rates, and what would that signify?
The US-China trade negotiations have hit a “slight stall.” Will China change its economic direction under pressure and fulfill promises of comprehensive opening up and structural reforms? Observations from The Wall Street Journal suggest that Chinese leader Xi Jinping has already answered by prioritizing manufacturing. How will other countries prevent China’s dumping epidemic in their markets?
On May 28, The Wall Street Journal reported that China might be changing its economic direction under pressure. Chinese leader Xi Jinping has clearly identified manufacturing as a top priority. Previously, Bloomberg reported, based on insider information, that Chinese officials are working on a new 10-year version of Xi Jinping’s “Made in China 2035” plan.
Let’s ask Professor Fan Jiazhong: despite China suffering from monetary tightening, overcapacity, and extreme imbalances while continually pushing for “Made in China 2025,” opposing Trump’s American industrial resurgence. How do you interpret its impact?
In response to China distorting global trade structures, the U.S. has implemented reciprocal tariffs and at least a 10% standard global tariff with 18 major trading partners, which will soon be finalized.
However, on May 28, the US International Trade Court ruled that parts of President Trump’s comprehensive tariffs were “ultra vires.” The White House criticized this as “judicial overreach,” filed an appeal, and the appellate court temporarily reinstated the comprehensive tariffs.
Let’s ask Professor Fan Jiazhong: (1) How do you view this factor? Will Trump’s tariff policy stop because of this? What impact does it have on the US-China tariff trade war and negotiations? (2) The key purpose of Trump’s comprehensive tariffs is to block China from laundering production and reducing its economic penetration into other countries. Will this court ruling affect Trump’s ability to reshape the global trade order?
On May 20, the six major state-owned banks of China, along with 9 joint-stock banks, collectively lowered their deposit rate ceilings, ushering in the era of 1% deposit rates in China. The first-quarter performance of the six major state-owned banks declined, and the non-performing loan ratio for personal loans also rose.
Let’s ask Professor Fan Jiazhong: (1) How do you assess the financial risks in China’s financial system? (2) Some commentators suggest a move towards a “negative interest rate” era, what would this signify?
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