The US-China trade

Chinese stocks rose to bull market territory on Monday after the US president Trump said that he would delay a rise in US tariffs on Chinese goods. The delay of US tariffs provided a relief on the US-China trade tension; previously, Trump also softened his tone on Huawei as well. A series of stories are showing the trade issue between China and the US might be possible to be resolved in the very near future. The Chinese economy is still dependent of exporting; actually all countries want to export as many goods and services as possible, as increasing exports can help to increase GDP. The trade tension between China and the US definitely raised concerns about the future performances of these two economies, especially the Chinese economy; the relief of the trade tension will increase people's expectations about the performances of these two economies. Therefore, it is not surprising to see the Chinese stock market rising.

However, it is possible that the market may be too confident about the trade issue between the US and China. The relationship between the US and China has always been very complicated that the two countries often cooperate in some areas but compete with each other in other areas. The current US president is a very unpredictable man who may choose his mind at some point in the future. It is only a delay not a cancellation, which means the tariffs may still be imposed in the future. Moreover, many US politicians see China as the biggest threat to the US's dominating position in the world and they will try their best to impose influence on the US president and direct the US policy in a hostile way towards China. Therefore, there are still many uncertainties ahead of China in terms of its relationship with the US.

It is good to see the delay of the tariffs but I do not think that people should be too optimistic about the current status.