Open Questions | Economist Huang Yiping on trade war redux under Trump and China’s stimulus ‘U-turn’
Huang Yiping of Peking University talks the re-election of Donald Trump and why China needs its own Marshall Plan
Huang Yiping is dean of the National School of Development at Peking University and sits on the Monetary Policy Committee of the People’s Bank of China and the Hong Kong stock exchange’s Mainland China Advisory Group. Previously, Huang was a senior economist with Barclays and Citigroup in Hong Kong.
The debt swap plan can take some immediate pressure off a lot of local governments, and thus lessen their “contraction effects” when it comes to putting Beijing’s stimulus into place.
The “contraction effects” stem from the fact that many financially strapped localities cannot effectively implement pro-growth measures, and their inability to do more due to tight finances is diluting Beijing’s growth push.
My advice is the central government raise its deficit ratio, to bear more debts in next year’s budget and expand the incomes of local authorities.
Donald Trump is very likely to further hike tariffs to target China. Beijing should take precautions by rolling out more measures to stabilise and spur domestic demand.
