The famous American economist Stephen Roach strongly criticized the US trade policies towards China, describing them as a “serious mistake” that threatens to embroil the two countries in a permanent economic conflict, according to what… Reported by Bloomberg.
In his comments during an event hosted by the Center for China and Globalization, Roach, the former president of Morgan Stanley Asia, expressed: Expressed his concerns about deepening management Biden What he called the “eternal war” against Chinese trade practices.
A protectionist stance has far-reaching consequences
According to Bloomberg, Roach emphasized the potential historical error in the United States adopting a protectionist approach against China, especially in light of China’s role in producing non-carbon alternative energy products that are necessary to combat global climate change.
“Taking a protectionist stance against a country like China that has a comparative advantage in producing the non-carbon alternative energy products that a world in the grip of climate change so desperately needs is a grave mistake, likely of historic proportions,” Roach said.
The United States has erected new trade barriers aimed at limiting China’s ability to control markets such as electric vehicles through what it claims are unfair government subsidies and capacity building, according to Bloomberg.
According to Roach, these measures not only represent an act of protectionism, but also hinder China’s ability to sell key new energy products internationally.
Implications for global trade
Roach’s speech paints a bleak picture for the future of economic relations between the United States and China, suggesting that without major policy changes both countries may be headed toward a prolonged period of trade and economic discord.
Roach asserts that this ongoing conflict has the potential not only to impact the world’s two largest economies but also to disrupt global economic stability and progress toward climate goals.
Economic challenges facing China
Roach criticized Beijing’s recent attempts to stabilize its economy, and despite presenting a strong housing rescue package aimed at revitalizing the market, Roach described these efforts as insufficient.
He said, “The real estate rescue package was a step in the right direction, but it is still too little to cover the housing stock,” as Bloomberg reported.
This criticism comes at a time when China’s economic recovery remains fragile, highlighted by an unexpected contraction in factory activity and ongoing trade frictions with the United States and Europe, which threaten to further weaken the manufacturing sector.
Demographic challenges and state dominance
The expert says that what increases the complexity of the economic scene in China is the demographic transition and the dominance of low-productivity state-owned companies.
Roach expressed doubts about China’s ability to boost productivity to meet these demographic challenges, especially in light of the strict regulatory restrictions faced by the private sector.
