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Investors Aren't Frightened About US-China Trade Rows - Deutsche Economist

Editorial Staff, 28 May 2019

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A senior China economist at the German bank struck a cautiously optimistic note at a recent seminar about the global outlook, saying Beijing will do what is necessary to keep the country's economy humming.

Global investors are not particularly worried about the recent China-US trade escalation's impact on the Chinese economy, Zhang Dewei, chief China economist and head of China Equity Strategy at Deutsche Bank, is reported to have said recently.

According to CGTN, when China is challenged by external forces, the Chinese government will loosen its policies to stabilize the economy, Zhang said at a forum held at Tsinghua University over the weekend. “The Chinese government has great policy space and political measures up their sleeves. With the policy space, the government can stabilize the economy in the short term,” Zhang said.

He added that investors, such as those with medium and long-term horizons, are not worried about the debt ratio in China since, after years of climbing, the overall debt ratio stabilized in recent years. “That's the main reason why global investors are optimistic about China's banking system and macro risks,” Zhang said.

His comments come at a time when equity and other markets have gyrated in response to actions by the Donald Trump and Chinese administrations over trade and tariffs. A number of wealth management firms have reduced exposures to risk assets, concerned that a trade clash will blunt global growth.

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