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Exclusive: US and China "shadowboxing", no fears of a trade war soon, says economist Andy Xie

Updated : May 28, 2018 12:27 AM IST

Fears of a global trade war between the United States and China have so far amounted to "shadow boxing," and so far the US did not know what course of action to follow yet, said economist Andy Xie.

"So, far it is really shadow boxing. Still the United States does not know what to do yet. I don't believe that trade war will happen soon because Chinese products are not exact Chinese products, they are American products and branded by American companies," he said.

"The US hasn't figured out what to do yet. However it is still an issue, the US and China trade imbalance is expanding and I think the frustration will build," he added, and said the situation could evolve into something more in a couple of years, but that so far it was mostly noise.

He further added, "I think China is trying to pile up more energy products even though buying agricultural products is politically important for Trump and for the Republican Party but the amount of value is not there. You cannot make up for the current imbalance."

Speaking about China he said the country needs a lot of energy imports, and so the country will be stocking up.

A lot of Americans did not want to be relegated to a commodity economy and were not happy about being a commodity producer, as the country's economy was focused on technology and manufacturing, said Xie.

Speaking about markets he said, "I think the market is rangebound, it is not a crash. I think the uptrend is being stopped. The US interest rate is now below inflation, real interest rate is still negative but there is expectation that interest rate will rise and real interest rate will become positive."

 
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