China amidst Trade War

US enkindled the spark against its trailing partner, China early this January and ever since a series of continuous attempts to impose supremacy and the subsequent retaliation has resulted in the trade war. Its nascent stage was just a dual combat but now its ripples have caused catastrophes in the emerging markets too. Afterall when two elephants fight, it's the ants around on the land that die and not the elephants. If we try to monetize ideologies, there is an astonishing fact, that the share of GDP of countries with populism ideology of governance is increasing in the world GDP. US is a net importer, with China as its largest trade partner, they will have to sooner or later either become self sufficient or reverse their sanctions.

Chinese equity markets have already lost $2.4 Billion since the trade spur. China is deleveraging its corporate sector from the last 18 months, baiting its growth potential and is ailing a currency depreciation as a result of regular capital outflows. These factors are stemming the hawkish outlook on the country. Though a currency fall is good for its exports but that also makes its foreign borrowings more expensive at a time when already its $250 Billion goods are under the tariff tussle.