Will Putin’s War Slow China’s Growth?
With tensions rising between Russia and China, many are wondering whether the increasing militarization of Russian President Vladimir Putin’s government will have any detrimental effect on the fast-growing Chinese economy. China has recently become a global superpower and its economy has grown remarkably in the past decade. Russia and China share a large border and are increasingly drawing closer to each other in terms of trade relations. It is therefore reasonable to assume that any conflict between the two countries could have potentially damaging effects on China’s economy. In this article, we will look at the potential effects of Putin’s war on China’s growth.
Impacts of Putin’s War on the Chinese Economy
The relationship between Russia and China is of utmost importance to both countries. Recently, Putin has become increasingly militarized, and his actions have occurred in a climate of rising tensions between the two countries. As a result, the economic repercussions of any war between the two countries could be significant.
- Trade Reduction
It is clear that any considerable reduction in trade between Russia and China could be detrimental to the Chinese economy. China’s exports to Russia in 2016 amounted to nearly $40 billion, which represented around 4% of the country’s total exports that year. Any significant disruption to the trade link between the two countries could be damaging for China, especially if Russia imposes any trade restrictions on Chinese establishments.
- Currency Depreciation
Furthermore, the possibility of a military confrontation between the two countries could lead to a significant depreciation in China’s currency. This could be damaging for the economy, as it could lead to a substantial rise in inflation. In addition, it could lead to businesses cutting their prices, resulting in a decrease in income.
- Fear of Instability
Finally, the possibility of a large-scale military escalation between the two countries could cause a sense of fear and instability amongst Chinese citizens and investors. This fear of instability could result in an increase in domestic saving, leading to a reduction in Chinese consumer spending. This could lead to businesses suffering and could prove detrimental for the Chinese economy.
Overall, it is difficult to assess what the exact economic impacts of Putin’s war on China will be. However, it is clear that any disruption in the current trade between the two countries and any instability caused by the conflict could be damaging for China’s economic growth. As a result, it is important that both countries take steps to prevent any conflict as soon as possible.
