China may be ready to gain an economic downturn to win a better trade deal

Published:

On: Aug 2019

According to the global investors perspective, the China may be inclined to win the trade war and in the process of growing the odds with the American president Donald Trump is a one-term president. Right from suspending the United States of America agricultural product purchases to weaponizing the yuan, all these high-quality measures, which could definitely put the businesses of China at huge risk. These are considered to be a preview of how far China could be expected to go economically in order to set a long-term deal in its favour.

Naka Mastsuzawa, Nomura’s chief rates strategist in Tokyo, said in a note on Wednesday that, “Many investors have recently expressed the perspective that China is assembled to gather an economic downturn and therefore a worldwide economic downturn in order to prevent president Donald Trump’s reappointed.”

While responding against Mr. Donald Trump’s tariffs threat last week, China settled back by stopping purchases of the United States of America’s agricultural products, which mainly hurts farmers in the Midwest, the states that are very significant for Donald Trump’s presidential win in the year 2020.

The UBS’ global chief investment officer, Mark Haefele stated that, furthermore, the China could also restrict purchases of agricultural goods, mostly for undermining the American president’s support base among rural voters ahead of the presidential election which will be held in November 2020.

China’s latest move to weaponize the yuan, is taking them at a high risk because the reduction would lead to an emigration of capital, but it is also said that, it’s a main place for Donald Trump as he has continuously protested the strong dollar.

The DWS Group’s chief investment officer told that, “China might be waiting for a chance of leadership in Washington”. If required, China might respond to the targeted measures generated to damage US president’s re-election, moreover at the risk of collateral destruction to the worldwide economy as well as financial markets.”

The United States president knows it very well that this is China’s intention. And that’s why he also warned China that they could get a much complicated agreement if and when he gets re-elected.