China’s economic performance has been inspiring considerable pessimism lately. In the second quarter of 2023, the Chinese economy grew by just 6.3% from a year earlier – a figure that is disappointing because of the low base in the second quarter of 2022, when pandemic restrictions were still suppressing economic activity. And in July, China’s consumer price index (CPI) entered negative territory for the first time since 2021, sparking fears of a deflationary spiral.

The United States has seen consistent monthly growth throughout the year, but certain risk factors are accumulating. The future trajectory of the U.S. economy will depend on the relative development of economic growth drivers and the potential risks. China must respond thoughtfully.

Through sincere efforts by the U.S. and China, it’s possible that the decline in trade will bottom out this year. Strong business relationships can once again serve as a stabilizing factor in the overall relationship, and inure to the benefit of our two peoples and the world.

China's economic slowdown is no longer the main contributor to global growth, but the rising strength of developing Asian economies offers hope for sustained global economic activity in 2023.

At the end of World War II, the United States accounted for more than half the world’s economic output and gold reserves. The United Kingdom was effectively bankrupt, with the remnants of the sterling area bound together by capital and trade controls. Once the British pound became convertible in July 1947, owing to US insistence, it succumbed to overwhelming selling pressure. The dollar, which was pegged to gold at $35 an ounce, was buoyed by America’s privileged position within the newly formed International Monetary Fund and quickly established itself as the bedrock of global trade and finance.

Despite setbacks, the Chinese government is confident that the long-term positive trajectory of the country’s economy will continue uninterrupted. The effects of macroeconomic policy will continue to emerge, market demand will gradually recover and the supply structure will adjust.

Tianjin’s AMNC 23 conference provides positive news. It sent out strong signals that a revival of global growth is on the way and provided reassurance that the world is not moving into a lost decade.

Growing extreme partisanship in the U.S. has deadlocked the debt ceiling raising at a time when the U.S. Dollar is facing its greatest challenge as a global reserve currency. China has sought to increase cross-border transactions in the Chinese yuan and has signed more deals to achieve this with several countries. However, the yuan lacks global adoption of its currency and in alternative systems outside of countries that do significant direct business with China.

The country’s current slowdown in economic growth is a natural reflection of its development at an important moment. It has come to a point where efficiency and quality, rather than quantity, are what will really count in the long run.

Political posturing shifted from “How to avert a debt crisis” to “How to get tough on China.” The squabble also reflected misgivings about China’s growing influence, as countries move away from the U.S. dollar and toward the yuan as a settlement and reserve currency.