China’s economy big enough to absorb Iran war shocks, says Justin Lin
But top economist cautions that US might not follow through on any agreements reached when Trump visits China in May
China has sufficient capacity to absorb external shocks from the Iran war and meet its annual economic growth target, a prominent economist said, while adding it was also preparing for the possibility that Washington might renege on trade deals.
Justin Lin Yifu, dean of the Institute of New Structural Economics at Peking University and a former chief economist at the World Bank, said on Thursday that no country could be spared from the economic impacts of the conflict in the Middle East, which has sent global oil prices soaring.
But the magnitude of the negative impact would differ for countries of different sizes, he said.
China had “enough space to offset, to moderate, the shock from outside and to maintain our development agenda”, Lin said, referring to this year’s economic growth target of 4.5 to 5 per cent, “as long as we can do things well domestically”.
“If we do well, we can grow even more,” he said. “But it depends not only on us, but also on the global situation.”
Very often, the agreement will be achieved, but may not be implemented by the other side
As the world’s largest trader, China was well positioned to achieve stronger growth amid a less turbulent global environment, Lin said.