Trump’s policy shift may be China’s doing

Donald-TrumpChinese pressure explains a shift in stance from the US president, who signalled at the Davos conference that he no longer regards the global economy as a zero-sum game, says an economist. The “surprising development” was likely a response to the efforts of Chinese representatives, who held “intense discussions” at the conference relating to the Belt and Road initiative, which is designed to spread China’s economic power, said Philippe Waechter, chief economist at Natixis Asset Management. “China wants to set up an international network that does not necessarily involve the World Trade Organization,” said Waechter. “Talks with France on the Silk Road seem to have been unilateral rather than bilateral, with China indicating what it sought and wanted. With this in mind, Donald Trump’s attitude with its trade partners could no longer be based on a zero-sum game as that would mean taking the risk of further isolating the US.” Analysts had previously feared that the US president’s confrontational attitude to global trade would ignite a trade war with China, which he had accused of underhand practices such as currency manipulation. However, Trump’s presidency has yet to cause a breakdown in trade relations. ©2018 funds global asia

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