China remains unshaken amid a drop in its stock market due to ongoing trade rift with the U.S.
The Shanghai Composite Index fell 1.3 percent on Monday, extending its plunging strip to four successive trading sessions. Its index has been on bottom 18 percent since the start of the year, an opposite drive from that of U.S. S&P 500's six percent gain. China's benchmark is also down by 25 percent from its high index last January.
This development, however, did not adversely affect China's confidence in the world market. China is not to give up in its seemingly ongoing trade war with the U.S.
Some market specialists believe that the trade rift between two of the world's major markets will not be resolved any time soon.
"At this point, both sides seem to be digging for a long fight," said BofAML Economist Helen Qiao. Merrill Lynch of the Bank of America also predicted that the trade war between China and the U.S. will take some time to be settled. The J.P. Morgan also shared the same sentiment on the unreconciled trade requirements between China and U.S.
"Given the huge gap between the two sides, the outlook remains extremely unclear. Negotiations, even if resumed, will likely involve a bumpy and lengthy process," said J.P. Morgan's China Equity Strategist Haibin Zhu.
Zhu added that China's stock market will not recover until its trade war with the U.S. will be resolved. Zhu said that the China-U.S. trade tension will continue to bring uncertainty which, in effect, will lead sentiments to remain cautious. This state will prolong until there is clarity from both sides when it comes to trade requirements.
The J.P. Morgan China Market predicted that the GDP growth rate of China will weaken to 6.3 percent in the second half of 2018, an opposite to its 6.8 percent grown during the first half of the year.
The Chinese Government is taking proper measures to address this concern straightforwardly and calmly. It does not take into pressure from the country's population.
Huaan Securities Analyst Zhang Quan said that investors need not to be overly pessimistic on the situation. He believes that China is taking steps to prevent the risks from trade rifts with the U.S., including "monetary and fiscal policy easing."
Meanwhile, the Chinese Government released a statement, in its official People's Daily Newspaper, and assured its people that the Chinese Government is observing brilliant wisdom and utmost skill in managing the country's economy despite signs of weakening the currency and plunging market.
