Jul 3, 2019, 7:35 PM
Journalist ID: 1844
News Code: 83380477
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Rising GNI gives China ammunition in trade talks

Tehran, July 3, IRNA/ Global Times - China, which is home to the world's largest population, saw its per capita gross national income (GNI) reach $9,732 in 2018, higher than the average of other middle-income countries.

As the reading inches closer to $10,000, a key psychological mark that will allow Chinese people to be more confident and assertive in the trade talks with the US, the negotiations offer a chance to reshape relations between Beijing and Washington as China reorganizes its supply chains in the Asia-Pacific region.

The talks fell into a stalemate earlier, as US President Donald Trump raised tariffs on $200 billion worth of Chinese goods on May 10. The stagnation of trade negotiations is a double-edged sword for the US and Chinese economies, but it also buys time for an economic adjustment. 

China has been trying to develop greater economic endurance against external attacks. Such efforts will help China gain bargaining power in the new round of trade talks with the US.

Since China has nearly 1.4 billion people, even great success such as an increased GDP, when divided by 1.4 billion, comes to a very small figure. As the world's second-largest economy, China has long grappled with issues such as poverty alleviation that are always faced by less-developed countries. 

For decades, China saw labor-intensive manufacturing as a key priority in alleviating rural poverty. But now that's changing. Once China's per capita GNI reaches $10,000, the country can concentrate its resources in developing high-end industries. The reading can be seen as a prelude to the nation's economic restructuring.

One of the most obvious changes will be a shift of its growth model to one relying more on domestic consumption and less on labor-intensive manufacturing, enabling China to reduce its dependence on the US market and fostering greater endurance against external attacks. 

It means China has less motivation to make compromise in the new round of trade talks with the US. 

As per capita GNI inches closer to $10,000, China has nothing to fear. The key issue on the agenda of the Chinese economy is to reorganize its supply chains to push forward its economic restructuring. We believe this will be reflected in the new round of trade talks with the US.


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