China’s political system – where state power and social control are dominated by the ruling Communist Party – could give Beijing an edge in a new trade war with the United States compared with other countries, experts and insiders have said.
But they warned that Chinese companies and local governments may lack the creativity to respond to a tariff war, as they rely on directives from the powerful central government.
US President Donald Trump stunned the world last week by announcing hefty new tariffs on imports from dozens of countries, including many of America’s closest allies. Chinese goods were hit with 34 per cent tariffs, and Beijing soon pledged reciprocal duties.
Zhu Feng, dean of the School of International Studies at Nanjing University, said China’s state-led administrative system had more room for “macroscopic prevention, adjustment and shifting to deal with the huge impact of the trade war on its economy and industry”.
If the trade war led to a sharp drop in China’s exports to the US, it would “have a catastrophic impact on the economy and damage people’s livelihoods and social stability”, Zhu said.
But China’s system would help the authorities address the challenges, Zhu added.
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