On July 19, the strategic studies team at Tsinghua University’s Center for International Security and Strategy (CISS) made the second stop of its summer research project as AN Gang, DONG Ting, BIAN Yongzu, SU Yanting, and WANG Jingshu visited Guosheng Securities and engaged in exchanges on China-US commercial relations with the company’s chief analyst Dr. XIONG Yuan and analyst LIU Xinyu.
The macro analysis team at Guosheng Securities has a reputation for its professionalism and accurate forecasts. During the session, the two sides compared notes on the dynamics of China-US relations, before the CISS team was briefed by the macro analysts on their analysis and projections of the topical issues concerning China-US commercial ties as well as their interplay with the overall bilateral relationship and the capital markets.
According to Dr. Xiong’s team, the markets are closely following the developments of China-US relations, and it is important to recognize the significantly weakened role of commercial cooperation as the “ballast” of the bilateral ties. As technology decoupling and financial sanctions becomes the centerpiece of the US competitive strategy towards China, the analysts warned against the mounting risk of capital market decoupling. The good thing is that the business sectors in the two countries are still engaging with each other, which, hopefully, would allow both sides to properly manage their conflicts and prevent a total breakdown in the bilateral relations even amidst an “all-out struggle.”
The global macroeconomic landscape in the post-pandemic era does not give much cause for optimism, Dr. Xiong’s team cautioned. The combination of domestic structural problems and external tensions such as the deterioration of China-US ties and technological iterations has further complicated the outlook for China’s economic growth, leaving a potentially short “window of opportunity” for reforms and adjustments. The only way for China to overcome the challenges and stay vigorous in its tug-of-war against the US is to fully realize the potential of its strengths—it has the world’s second largest consumer market and a complete industrial chain and system—and constantly refine its perspective, open up, improve its industrial layout and encourage innovation.