The trade war is an incentive for market expansion

The trade war is good for China because it provides incentives for market expansion in domestic consumption, imports, and exports. One result of the trade war has been China focusing on expanding domestic consumption and encouraging innovation which will strengthen their economy. China has been encouraged by the trade war to focus on growing its domestic consumption. Since the start of the trade war, China has implemented new policies such as tax cuts to redistribute wealth and stimulate its domestic economy.^[1] Starting long before the trade war, China became aware of the problem with relying on the United States for technological and scientific advancement. It has been focused on becoming an industry leader in new technologies such as artificial intelligence (AI) and wireless services. This can be seen by China being the biggest source of scientific research papers, and Chinese companies leading in 5G technology and often beating U.S. companies such as Facebook in AI voice processing.^[1]The trade war is reinvigorating China’s commitment to innovation. The trade war is also requiring China to look into new markets to buy from. Reducing their dependence on the U.S. for agricultural imports will increase China’s food security. Since the trade war, China has been buying more agricultural products from the EU. Looking for other options (such as Russia, Eastern Europe, Africa, and South America) has been an ongoing policy in China; for example, in 2014, China cut its purchase of U.S. corn by 90% and started buying corn from Ukraine instead. If China decides a similar and permanent cut with soybeans, the U.S. economy will suffer.^[2] Finally, the trade war is providing an incentive for expanding Chinese exports to other countries. Chinese exports to South-East Asian countries, such as Vietnam and Malaysia, have grown and China’s exports to Europe surpassed its exports to the United States in 2019. This increase in exports could be caused by the fact that Chinese companies are highly competitive because they invest in research and development or the yuan’s 6% depreciation against the dollar which makes the price of their goods highly competitive.^[3] Either way, Chinese imports are expanding in other markets which will be beneficial to China’s economy regardless of how the trade war ends.

[P1] China is trying to expand domestic consumption. [P2] China is encouraging innovation. [P3] China is importing from new countries. [P4] China is expanding its exports to other countries. [P5] The trade war has encouraged all this. [P6] The trade war is good for China.