If China’s economic growth were to be hit by trade tensions with the U.S., the effect would be felt only later in this year, JPMorgan said Wednesday.
That’s because extensive negotiations have to be carried out by the two economic giants to iron out frictions that have seen both threatening tariffs on each other’s products, according to Haibin Zhu, JPMorgan’s chief China economist. And they’re likely to head off a trade war.
“We’re expecting a bumpy road to negotiations, so probably not full-scale trade war. But we also don’t expect the trade dispute between the two countries to be resolved very quickly,” he told CNBC’s “Capital Connection.”
“And it probably won’t affect immediate growth outlook, but it may have some net impact — say the end of this year or 2019,” he added.
Among the issues that the two largest economies in the world have to negotiate, it’s the non-tariff agenda — such as intellectual property protection and technology transfer — that would be more challenging, Zhu noted.
China on Tuesday claimed that it saw 6.8 percent growth in the first quarter, exceeding expectations of 6.7 percent.
“If you look at the first-quarter GDP report, the positive news is that China’s growth momentum is still quite assuring at this stage,” Zhu said. “Particularly domestic economic activity is on a very solid growth pace.”