LOS ANGELES, March 31, 2020 /PRNewswire/ -- In its annual
report for 2020, the Cathay Bank/UCLA Anderson Forecast U.S.-China
Economic Report focuses on two significant events transpiring
concurrently. The first is the 2020 COVID-19 global pandemic. The
second is the Phase One trade agreement between the United States and China, which both nations claim will increase
trade between the two countries.
The report, authored by UCLA Anderson Forecast economist
William Yu and Forecast director
Jerry Nickelsburg, notes that there
is clearly uncertainty with respect to the length and severity of
the coronavirus pandemic. It is possible, the report says, that it
is early in the life cycle of this epidemic and that the peak is
yet to come.
"To be sure, a fall-off of global tourism and transportation and
the stalled production and consumption of goods and services are a
blow to both the U.S. and Chinese economies," says Yu. "Indeed, the
nascent global recession will dramatically affect trade between the
two countries. It is this latter event that will dominate the
U.S.-China economic landscape
through 2020, with any impact of the Phase One trade agreement
pushed into 2021."
The report provides a preliminary estimate of some of the
economic costs, including a direct monthly international tourism
loss of $21 billion to the U.S.
economy.
The report also looks in detail at the Phase One agreement and
its ultimate economic impact. The agreement covers seven subjects:
intellectual property, technology transfer, food and agricultural
products, financial services, macroeconomic policies and exchange
rates, expanding trade, and bilateral evaluation and dispute
resolution. If China and the U.S.
follow through, it would mark a milestone for a less acrimonious
and more sustainable economic relationship between the two
countries. However, if Washington
perceived that China was not
living up to the agreement, then there could be a return to the
trade war mode.
Yu and Nickelsburg consider the Phase One deal a reset in
relations between the two countries, saying that, thus far, it has
prevented the U.S. and China from
engaging in a full-blown trade war. That said, there remain many
areas of economic tension, such as technology, where the
telecommunications industry remains a key arena of competition.
The economists conclude that 2020 will be a crucial year for
both the U.S. and China. It is the
U.S. presidential election year, and turbulence from the public
health emergency and the economic recession will be Washington's focus. For China, the early 2019 warning from the Chinese
press "(to) be on guard against black swans and keep watchful for
gray rhinos" was prescient. Navigating the restructuring of the
Chinese economy while managing the course of the pandemic presents
challenges to coping with expected and unexpected issues, replete
with related domestic political overtones. Overlaid on this
landscape is the many-faceted strategic competition between the
U.S. and China, as well as the
restructuring of supply chains with likely near-term negative
costs. Thus, there is heightened uncertainty with regard to
U.S.-China economic relations for
the coming 12 months, creating both risks and opportunities.
Read the full Cathay Bank/UCLA Anderson Forecast U.S.-China
Economic Report
About UCLA Anderson Forecast
UCLA Anderson Forecast is
one of the most widely watched and often-cited economic outlooks
for California and the nation, and
was unique in predicting both the seriousness of the early-1990s
downturn in California and the
strength of the state's rebound since 1993. More recently, the
Forecast was credited as the first major U.S. economic forecasting
group to declare the recession of 2001. Visit UCLA Anderson
Forecast at uclaforecast.com.
About Cathay Bank
Cathay Bank, a subsidiary of Cathay
General Bancorp (Nasdaq: CATY), offers a wide range of financial
services through nine states in the U.S. as well as a branch in
Hong Kong and representative
offices in Beijing, Shanghai and Taipei. Founded in 1962 to support
Los Angeles' growing Chinese
American community, in the past half-century the bank has expanded
and grown with its customers, providing them with the tools and
services they need to achieve their goals. Learn more at
cathaybank.com. FDIC insurance coverage is limited to deposit
accounts at Cathay Bank's U.S. domestic branch locations.
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@UCLAAnderson
Media Contacts:
Rebecca Trounson – (310)
825-1348
rebecca.trounson@anderson.ucla.edu
UCLA Anderson School of Management
Paul Feinberg – (310)
794-1215
paul.feinberg@anderson.ucla.edu
UCLA Anderson School of Management
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SOURCE UCLA Anderson Forecast