Would the trade war trigger another world finanacial crisis?
文章来源: panlm_2019-09-21 07:21:14

Would the trade war trigger another world finanacial crisis?

Like the one ten years ago starting in the US, and then spreading to the entire world, this is signalled by today's news about the China currency RMB has depreciated over 7.0149 vs the US dollar, leading to the stock opens low this morning.

If such a trend continues, it is hard to avoid another finanacial crisis worldwide, hurting the economies. Unfortunately, people appear to forget the market crash in 2009, causing millions of people loosing houses, jobs, and pension savings. A big blow to economies, indeed.

Nobody wants another financial crisis coming again. However, the ongoing trade war between the States and China has begun to deeply influencing people's life, in particular low-income families both in the States and China, where the US farmers are loosing money because of failing to sell their products and China manufacturing plants are being shut down.

As pointed out by President Trump that China economy is doing bad, millions of China workers are loosing jobs because of reduction in production. Is there a way to change this situation? Depreciation of China currency may promote exporting, but also hurts China economy because of assets in China become cheaper when purchasing from outside of the country by using US dollars. Traveling in China also becomes cheaper.

In the States, common consumers would pay more to buy goods because of the imposed tarrif on the imported goods from China. Also, the US farmers would have difficulties to sell their soybean and porks to China simply because China lacks of foreign reserves to buy the US products.

Obviously, the on-going trade war should be stopped.  Otherwise, another financial crisis would come sooner.