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Could Trade War Be A Blessing In Disguise For China?   

What I'm about to write could be controversial for the time we're living in now.  As we all know President Trump's tariffs on China are the means to push China to negotiate a fairer trade -- at least this is how the president promotes to the public.  So far China isn't willing to be a pushover and so they decide to retaliate pound for pound.  This means whoever blinks first would lose a lot more in the long run, but in the end, both the United States and China would lose in the short term -- well, at least this is how the news programs promote this.

Could trade tariffs be many blessings in disguise for China?  How come?  China has been known as the factory for the world since this country opened up its market and joined the World Trade Organization.  This means China can ramp up production of almost anything!  As Trump's tariffs hit China, companies that want to avoid tariffs from the United States and still want to export to the United States would move their operations out of China.  Nonetheless, there are Chinese and foreign companies in China that produce the same stuff but have yet to export their products to the United States and would find the vacuum suddenly a lot more pleasant to navigate and do business with.

The Chinese government could also be more lenient toward companies that decide to keep their operation within China, thus allowing these companies to prosper while China's internal consumer market ought to grow bigger in time.  Remember Google?  Google left the Chinese market a long time ago but now Google has shown signs that it wants to grab a chunk of the Chinese's huge consumer market.  Unfortunately, Google isn't making much progress on this front and allowing similar Chinese homegrown companies to grow unchallenged within China.

Since Chinese companies that are going to stay in China could ramp up their production unchallenged as the trade war between the United States and China heats up, these companies ought to grow bigger in a more empty but lucrative Chinese consumer market.  Perhaps some European companies may want to open up their operations in China to give the Chinese companies some competition.  Anyway, I think Chinese companies could grow unchallenged in their home market and mass produce even cheaper products to saturate the world market even more.  In the end, I think a trade war could only harm a weaker foe who got no means to fight back and could not ramp up production.  In the case of China, I think a trade war could be a blessing in disguise for the reasons I surmised thus far.

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Vinh Nguyen

"Rinse, repeat, born again, a clean slate advantage, but one needs to relearn everything again! Such a case relies on true, noble historians."

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