Economic Outlook

U.S. President Donald Trump signed a memorandum Monday, August 14, ordering his trade office to launch a probe under Section 301 of the Trade Act of 1974, of possible Chinese theft of U.S. technology and intellectual property.

Before the Spring Festival people worried there might be a period of fluctuation due to sharp short-term market gains. However, the NPC and CPPCC announced some preferential policies during their annual plenary meetings, known as the “two sessions,” dispelling those fears , and the market  showed strong gains.

Many economists are puzzled by the fact that neither economic growth nor inflation have turned out as expected despite the great efforts by the central banks in the western countries to reduce their interest rates again and again, even to zero. The central banks in the EU and Japan, in particular, even reduced their interest rates to negative values.

While taking a taxi in Shanghai recently the driver asked me about whether the Chinese economy was in a new cycle or an old one. This exemplified the degree of the hot debate on whether the Chinese economy is going into a new cycle or not.