Global economic growth is slowing and will continue to slow amid growing threats of a trade war, a leading economist warned the Pacific Asia Travel Association (PATA) Summit in the Philippines.
Andrew Staples, global editorial director of The Economist Corporate Network, said: “The global economy slowed in 2018. It is slowing again in 2019 and will continue to slow in 2020.
“Growth is uneven and starting to deteriorate. China continues to slow although the Chinese state is managing this very well.”
Staples described the outlook as one of “growing risk” and told the PATA Summit: “Trade is the biggest concern. We should all be concerned about the conflict between the US and China.”
He characterised it as “a battle for digital supremacy, about who will set the rules for the next stage of the global economy,” adding: “The battle around 5G is part of this.
“Some of the tension between the US and China is about who will run the global economy.”
Staples identified a number of other risks but said: “We are very concerned the trade war between the US and China could become a global trade war and slow everything down.
“It is creating uncertainty and risks and increasing costs.”
The US and China were due to hold trade talks this week and Staples said: “On Sunday, it looked like they would come together and do a deal.
“On Monday Trump said, ‘The deal is off’ and he would impose another 15% tariff on $200-billion worth of Chinese goods.”
Staples highlighted the issues between the governments but said: “Technology transfer is the tricky one.
“China wants to be global leader in Artificial Intelligence and 5G by 2025. The US does not want to see that happen.”
He warned: “If we don’t get a deal, it will downgrade forecasts for the global economy.”
Staples added: “India might be the next country in US sights. It runs a considerable surplus with the US.
“There is also a report on Trump’s desk on whether EU auto exports pose a national security threat to the US. It’s laughable, but if Trump puts on tariffs, the EU will respond.”
However, amid the warnings on trade, Staples said: “The megatrends are much more positive and what is really driving economic growth.
He advised PATA members: “Position yourself for short-term volatility but long-term growth.”
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