Beijing is in the middle of a years-long effort to transition the country towards relying on consumption for growth, rather than manufacturing. The government has also launched a “Made in China 2025” program to encourage domestic technological innovation.
“I see China as five years ahead of the U.S. when it comes to the extent to which digitalization is integrated into this economy,” Arun Sundararajan, professor at New York University’s Stern School of Business, said during the same panel discussion Thursday.
However, he said, the U.S. is still ahead of China on research and development in artificial intelligence. He also noted that Japan surpasses both countries in industrial robotics.
The Trump administration has said it is targeting the “Made in China 2025” plan, among other complaints against the Asian giant. The latest round of tariffs on $200 billion worth of Chinese imports to the U.S. will initially take effect Sept. 24 at a 10 percent rate, before rising to 25 percent on Jan. 1. Beijing is planning counter-tariffs on $60 billion worth of U.S. imports at 10 percent and 5 percent.
On Wednesday, J.P. Morgan analysts said in a report they expect the tariffs to hit China’s gross domestic product growth by 0.6 percentage points. Such a slowdown would add to existing negative pressure on the economy due to Beijing’s efforts to reduce reliance on debt, and transition towards consumption-driven growth.
“It won’t be easy,” Ulrich said. “The road will be bumpy.”
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