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Impacts of Sino-US Trade Frictions and Policy Options: A Case Study on Enterprise Performance in Suzhou City (No.201, 2018)


Research Team on “Impacts of Sino-US Trade Frictions”, DRC

Research Report, No.201, 2018 (Total 5476) 2018-11-22

Abstract: In early September this year, DRC sent a research team to conduct a field investigation in Suzhou city, Jiangsu province, on the impacts of Sino-U.S. trade frictions and made a questionnaire survey on about 300 enterprises in the city. According to the survey results, Sino-U.S. trade frictions have mainly affected enterprises relating to hi-tech electronic products and processing trade exports as well as foreign-funded enterprises, especially those engaged in export trade with the United States. Some export-oriented enterprises have made plans to relocate the production bases overseas and some are ready to cut the workforce. If trade frictions between the two countries become escalated, China will see mounting downward pressure on its economic growth and adverse effects on the economic transformation and high-quality development. To cope with Sino-U.S. trade frictions, China needs to focus on both long-term and short-term effects and take across-the-board measures. The government needs to adopt some contingency measures in the short term to help domestic enterprises dissolve the adverse effects caused by the US tariff increase and China's countermeasures on their production and operation. In the long run, the government needs to focus on expanding domestic market, improving the export of service trade, developing the industrial chain and promoting scientific and technological progress to propel economic transformation and upgrading.

Key words: trade frictions, tariff increase, Suzhou city