Economy

He is a self-styled “anarcho-capitalist” with no government experience but is running one of the world’s boldest economic experiments, advised by his sister, his English mastiffs, and a social media guru.The fate of 46mn people in a country that is one of the world’s biggest food exporters lies in his hands. Hedge funders hail him as a beacon of pure capitalism in a “woke” business world, while leftists dismiss him as a loathsome manifestation of the global far right.So how is Argentina’s unconventional President Javier Milei performing after nearly 11 months in office? And can he transform a country that is synonymous with economic crisis into a success story?Inflation, Milei’s top priority and Argentina’s eternal bugbear, is down from 25.5 per cent a month when he took office last December to 3.5 per cent in September — although prices have still more than doubled since the start of the year.Milei has fulfilled his campaign pledge to “take a chainsaw to the state”, eradicating years of hefty government deficits and money-printing by halting capital spending, shrinking the government payroll and increasing pensions and state sector salaries by less than inflation.Government finances moved into the black by 0.3 per cent of GDP in the first eight months of this year, compared with a 4.6 per cent deficit at the end of 2023. One international financial official describes it as “the most drastic fiscal adjustment ever seen in a peacetime economy”.But austerity has deepened a recession which began last year, with the IMF predicting the economy will shrink 3.5 per cent in 2024. While there are some signs that economic activity has bottomed out — it grew 1.7 per cent month-on-month in July according to the latest government data — consumer spending, industry and construction remain deeply depressed compared with 2023. The number of Argentines in poverty has swelled to 53 per cent, the most in 20 years. Unemployment in the second quarter of this year stood 1.4 percentage points above the same quarter last year.“The worst is now past,” Milei insists in an interview with the Financial Times. “More than 80 per cent of [economic] indicators have turned positive . . . real wages have been growing for the past four months.” He concludes: “We are laying the foundations for strong growth.”Economists, diplomats and pollsters are less certain, praising Milei’s achievements in extraordinarily difficult circumstances but pointing to big risks that remain.“The starting point was terrible,” says Alfonso Prat-Gay, who served as finance minister between 2015 and 2016 in the centre-right government of Mauricio Macri and is now a consultant. “But the government is too triumphalist . . . It’s admirable what Milei achieved on the fiscal side this year, but there’s a big question about how sustainable it is.”Some confidence is returning. The gap between the black market dollar and the official rate — a closely watched barometer of sentiment — has shrunk to just under 20 per cent this month from levels as high as 60 per cent in January.But most foreign investors want to see how durable the Milei experiment proves before opening their cheque books. Domestic industry is being squeezed by the increasing strength of the peso, which also makes it harder for the government to save up the dollars it needs for debt payments.When it comes to stimulating growth, Prat-Gay says of the government: “They want it to happen, but they aren’t doing anything to make it happen.”Argentina also faces external financial pressure, with more than $14bn of debt repayments due next year and no chance of borrowing fresh cash on international markets until the economy is stronger.The government rests on a fragile legislative base. With only a small minority of seats in congress and no state governors, Milei is betting that he can govern by decree and borrow enough votes from Macri’s bloc of lawmakers to veto laws that increase spending. He hopes to elect many more legislators in midterm elections next October. Whether or not he succeeds, some argue he has already permanently reshaped Argentine politics.“Maybe we underestimated him,” says one senior diplomat in Buenos Aires. “He has kicked over the entire political playing board and, for now, he has neutralised the opposition . . . Even if he doesn’t succeed, I doubt the country will go back to where it was before.”Perhaps the biggest question amid all the uncertainty is how long the patience of the Argentine people with Milei’s drastic economic shock therapy will endure.Milei’s popularity has dipped since taking office but, at about 44 per cent, his approval rating is holding up well for a leader presiding over tough austerity measures. In a country with a long tradition of big, noisy street protests, the relative lack of mass demonstrations so far has been striking.“The government is having successes in some areas,” admits Héctor Daer, leader of the powerful health workers’ union, on the quieter than expected streets. “People want their problems solved and they don’t want to be protagonists [in protests] for fear of losing their jobs.”This may change: Milei’s veto of a bill restoring inflationary increases for university budgets brought an estimated 250,000 people on to the streets earlier this month, uniting the left and centre-right and prompting some to suggest the president had miscalculated.But, for now, one of Milei’s biggest advantages is the lack of alternatives. “People who voted for him are saying: ‘Let the madman get on with it,’” political analyst and consultant Sergio Berenzstein says. “Ultimately, his success will be defined by the speed and the perception of economic recovery.”Argentina’s Peronist movement, which has dominated government over the past 40 years, is on the back foot after leaving the economy to Milei in a dire state and suffering a series of corruption scandals.Axel Kicillof, governor of Buenos Aires province and the Peronists’ most powerful elected official, accuses Milei of deceiving voters. “They thought the spending cuts were for others [like the elite], not for them,” he says. But when asked about the Peronists’ message now, he is more vague, talking of the movement’s nationalist values and the need to build consensus around the worth of the state.Former president Cristina Fernández de Kirchner, still Argentina’s dominant leftist, has announced her intention to return to the presidency of the Peronist party in what is seen as an attempt to stamp her brand of populist socialism on the movement before next year’s midterm elections.But “Cristina”, as she is universally known, is fighting a series of court cases over corruption allegations and is almost as polarising a figure as Milei, so it is unclear to what extent her return will help the left.Martín Lousteau, a leader in the centrist Radical party, compares Argentines faced with a choice between Milei and the Peronists to long-suffering passengers on a 12-hour flight from Buenos Aires to Madrid offered a meal choice between chicken and pasta.“The last five times the chicken has given me food poisoning, so I’m going to ask for pasta,” he says. “When the pasta comes, it’s going to be horrible, nobody likes it . . . but there’s nothing else to eat and 10 hours to go before landing. And then Cristina comes out and says: ‘I’ve got some chicken for you.’” More

Argentina is one of the world’s serial defaulters, having failed to meet its international debt obligations nine times. This time, insists economy minister Luis Caputo, will be different.Mired in recession and short of dollars, the South American nation is due to pay more than $14bn to bondholders and multilateral lenders in 2025. Could there be another default?“Of course not, never,” the former Wall Street trader tells the Financial Times in a joint interview at the presidential palace with President Javier Milei. “Our commitment to pay our creditors is absolute, total.”Milei, the libertarian economist who became Argentina’s president last December, is more than 10 months into a free market reform drive to remake the notoriously crisis-prone economy.However, while he has slashed inflation and balanced the government’s books, Milei has been unable to rebuild the country’s scarce foreign exchange reserves or restore access to international capital markets, raising questions about how Argentina will make next year’s repayments.But Caputo claims both will soon be achieved as the government’s programme improves the economy and boosts market confidence.Economists estimate that the central bank’s hard currency reserves are still roughly $4.5bn in the red, after discounting a loan from China, private deposits and other liabilities. The build-up of reserves has been slowed as the government spends dollars on maintaining the peso’s official exchange rate, in order to prevent a spike in inflation. Low global prices for soyabeans and corn, Argentina’s main exports, have also contributed.Argentina’s economy minister Luis Caputo says the country will meet its debt obligations More

After 50 years of failing to balance its budget, France wants to narrow its deficit next year with €60bn-worth of tax rises and spending cuts. But the belt-tightening poses a risk to growth, analysts and businesses say, in an economic climate that may be as fragile as the country’s government. That, in turn, creates a headache for the Eurozone, where France’s relative health has acted as a bulwark against a sharp slowdown in Germany.New conservative premier Michel Barnier this month unveiled a fiscal package that aims to narrow its deficit from 6.1 per cent this year to 5 per cent by the end of 2025. Barnier believes his proposals will not only put France on track to reach the European Union’s 3 per cent deficit limit by 2029, but also leave the Eurozone’s second-largest economy able to expand by 1.1 per cent in 2025 — a level similar to what the government anticipates for this year. While they say spending cuts will be considerable, ministers also claim tax increases on large companies and the wealthy will be “targeted and temporary”, insulating jobs and growth. “In the current, urgent situation, we have no choice but to reduce public spending and the deficit,” said Barnier, who has also warned that France faces a financial crisis if the problems are not addressed.French forecasts fall as budget bitesPredicting the budget’s impact on the economy is challenging since Barnier lacks a parliamentary majority and risks facing a no-confidence vote, meaning he will have to compromise with lawmakers.However, many economists believe the impact of fiscal restraint, which amounts to as much as 2 per cent of output, will almost certainly be more dismal than the government expects. Even before the budget’s impact was factored in, France was expected to be one of the worst performers among large, developed economies. Some content could not load. Check your internet connection or browser settings.Some economists now predict that growth in gross domestic product could drop to as low as 0.5 per cent next year.“This period will be difficult for all: not only businesses and the wealthy whose taxes will rise, but also for households and local governments,” said Bruno Cavalier, chief economist at Oddo, a bank that is among the most bearish. “Everyone will feel some pain.”OFCE, a Paris-based research group, forecasts GDP will grow by 0.8 per cent, with tight fiscal policy blunting the positive effects of lower energy prices and the European Central Bank’s interest rate cuts. François Villeroy de Galhau, the governor of the Bank of France, said recently on France Inter radio the impact would be manageable. He called the OFCE forecast “a bit pessimistic” given other “favourable elements”, such as a high level of savings available to cushion consumption. An already fragile economyOther economists warn that demand is already fragile, with households still choosing to save rather than spend even as their wages start to catch up with inflation. “Without government spending, consumption would have been falling already last year,” said Gilles Moëc, chief economist at insurer Axa, who thinks GDP growth could be as low as 0.6 per cent in 2025. Higher interest rates have already done damage, despite the ECB’s recent cuts. Bankruptcies are at their highest level in years as the cushion from Covid-19 aid programmes fades. Some content could not load. Check your internet connection or browser settings.Catherine Geurniou, the owner of a small business that makes windows for homes and offices, has seen her revenues fall by a fifth this year. She fears a further slowdown from the trimming of government subsidies for energy-efficient renovations.“I’m thinking about cutting back on investment in my company,” Geurniou said.The proposed budget may also hit jobs. Generous subsidies worth up to €6,000 a year to companies who hire apprentices — subsidies which helped spur a million more people to join France’s workforce — are set to be trimmed. Other tax breaks given to employers to incite them to hire low-income workers will be cut back. Some content could not load. Check your internet connection or browser settings.That will almost certainly put President Emmanuel Macron’s goal of reaching 5 per cent unemployment out of reach, and raise the jobless rate from the current level of 7.3 per cent. Bruno Castagne, who owns a small cleaning company with eight employees, said his business would be hurt by the lower tax breaks on entry-level salaries and apprenticeships. “It could take off almost half of my 6 per cent profit margin,” he said. “I feel that it’s getting harder and harder to handle the uncertainty, and our market is also getting more competitive.”As the Macron era ends, challenges deepenThe budget shows that Macron’s era of business-friendly reforms are on the backburner as cleaning up public finances becomes a priority both for Brussels and investors. Concerns over France’s fiscal situation have contributed to a sell-off in its long-term debt this year, taking its 10-year yield to just above 3 per cent and crossing above Spain’s for the first time since the 2008 financial crisis.Some content could not load. Check your internet connection or browser settings.The Barnier government proposed €15.6bn in new levies on large companies and the wealthy. He has repeatedly promised that the hikes will only last two years, but few observers believe that.Moëc said the government had little choice in the short term but to target wealthy people and businesses who could “take it on the chin”. In the longer term, France will struggle to use its habitual method of using taxation to plug the deficit hole because its tax burden already represents a bigger share of GDP than in any other OECD country.Some content could not load. Check your internet connection or browser settings.While the government claims the package is two-thirds spending cuts and one-third higher taxes, the independent Haut Conseil des Finances Publiques budget watchdog contests their methodology. Barnier’s calculations do not use a baseline of 2023 spending, but the counterfactual of what spending would have been in 2025 if nothing was done. The Haut Conseil estimated that the real fiscal straitjacket was much looser — more like €42bn than €60bn — with 70 per cent of the restraint coming from tax hikes. Economists agree. “The unusual method that the government used makes it seem like they are doing more than they are, and that the package includes more spending cuts than taxes,” said Silvia Ardagna, a Barclays analyst. “The opposite is true.” Barnier’s perceived sleight of hand, and the fact that France has not balanced its budget since 1974, speak to the scale of the challenges facing the Eurozone’s second-largest economy. Some content could not load. Check your internet connection or browser settings.His minority government has little political capital on hand to enact the unpopular policies that France needs to address its persistent deficits. First among these would be cutting its enormous pensions bill that amounts to 14 per cent of GDP annually — a political third rail given the voting power of the elderly. Public services, from health to education, have also received hundreds of billions in extra money since 2017 without always delivering better results. “They are doing what’s politically possible . . . but it’s a sticking plaster,” said Andrew Kenningham, at the consultancy Capital Economics. “It’s widely recognised that they need to reduce the cost of the state. They just haven’t got a mandate to do it.”Additional reporting by Ian Smith in London More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Investors are piling into emerging market funds that exclude China despite a recent blistering rally in Chinese stocks, amid concerns over escalating tensions between Beijing and the west.Investment firms told the Financial Times that clients increasingly see the world’s second-biggest economy as too large or risky to manage alongside other developing economies such as India, leading to one of the biggest shifts in emerging markets investing in decades.Franklin Templeton became the latest manager to launch a so-called “ex-China” emerging markets vehicle on Tuesday, adding to a class of funds that has increased assets by 75 per cent this year to more than $26bn, according to data from Morningstar.“When investors are keen to avoid a certain sector or region, the industry is happy to oblige,” said Michael Field, European equity strategist at Morningstar. “This has certainly been the case with funds that have excluded China from their make-up.”China is classed as the world’s largest emerging market, with its companies making up a quarter of a benchmark MSCI index for developing-economy stocks. That weighting is down from a peak of more than 40 per cent during the global pandemic. But it is still considered too large by many investors concerned that it is drowning out exposure to more promising economies, or is saddling them with risk over tensions between China and the west.This has led to “what is essentially a new asset class” as investors carve out Chinese stocks into separate allocations and build portfolios that allow greater exposure to India, Taiwan and other markets, said Naomi Waistell, a portfolio manager at Polar Capital, which also has an ex-China fund.A surge in Chinese shares since Beijing unveiled stimulus measures last month has not changed this calculus, as the country’s volatile stocks have become a bet on the scale of government action, Waistell added. “China is a different type of market — it does have those idiosyncratic risks, and perhaps needs to be looked at by specialists.”So-called “ex-China” equity funds have received $10bn of net inflows so far this year, according to JPMorgan — outstripping the total amount of money that has gone into broader emerging market equity funds. The number of such funds globally has nearly doubled to 70 in the past two years, according to Morningstar data.Some content could not load. Check your internet connection or browser settings.Some investors are also worried about the potential for further sanctions against Chinese companies, partly because of memories of the collapse of investments in Russia after Moscow’s invasion of Ukraine, fund managers said.Countries in Europe have clamped down on Chinese entities accused of supporting Russia’s war effort, while the US has proposed restricting investment into parts of China’s tech sector.Larry Fink, chief executive of BlackRock, told a conference in Berlin this month that China was the “biggest supporter” of Russia “and that has to be at least discussed”.Fund managers say political reasons for going “ex China” are mostly still concentrated among US investors, where large pension funds have axed exposure to the country citing national security risks.Last year trustees of the Missouri State Employees’ Retirement System voted to sell Chinese shares. Vivek Malek, the state’s treasurer, said that “investments in China simply carry a level of risk that is contrary to the interests of our retirees”.Florida’s governor Ron DeSantis signed a law earlier this year requiring the state’s investment board to offload existing direct holdings in China “to ensure foreign adversaries like China have no foothold in our state”.Thomas Schaffner, who manages emerging-market stock funds at Swiss asset manager Vontobel, said: “Overall US investors have a more negative view of China, while Europeans are more pragmatic and in the middle.”Some investors have questioned whether moving emerging market investments to an “ex-China” basis alone can mitigate political risks.Yves Choueifaty, founder of TOBAM, a manager that seeks to cut out “autocracy risk” in investments, said this risk also lay in shares in companies in developed economies that had their largest market in China. “Russia and China are the same qualitatively speaking, but quantitatively speaking, the exposure to China is simply enormous,” Choueifaty added.Additional reporting by Brooke Masters in New York More

The Washington, D.C.-based organization highlighted that China’s property sector contracting by more than expected is one of many downside risks for the global economic outlook.
China last week reported third-quarter gross domestic product growth of 4.6%, slightly higher than the 4.5% that economists polled by Reuters had been expecting.
In a report published Tuesday, the IMF trimmed its forecast for growth in China for this year to 4.8%, 0.2 percentage points lower than in its July projection.

Chinese flags for sale on Nanjing East Road in Shanghai, China, on Wednesday, Oct. 2, 2024.
Qilai Shen | Bloomberg | Getty Images

The International Monetary Fund (IMF) warned of a possible worsening of the state of China’s property market as it trimmed its growth expectations for the world’s second-largest economy.
In a report published Tuesday, the IMF trimmed its forecast for growth in China for this year to 4.8%, 0.2 percentage points lower than in its July projection. In 2025, growth is expected to come in at 4.5%, according to the IMF.

The Washington, D.C.-based organization also highlighted that China’s property sector contracting by more than expected is one of many downside risks for the global economic outlook.
“Conditions for the real estate market could worsen, with further price corrections taking place amid a contraction in sales and investment,” the report said.
Historical property crises in other countries like Japan (in the 1990s) and the U.S. (in 2008) show that unless the crisis in China is addressed, prices could correct further, the IMF’s World Economic Outlook noted. This in turn could send consumer confidence lower and reduce household consumption and domestic demand, the agency explained.

China has announced the introduction of various measures aimed at boosting its fading economic growth in recent months. In September, the People’s Bank of China announced a slate of support such as reducing the amount of cash banks are required to have on hand.
Just a few days later, China’s top leaders said they were aiming to put a halt to the slump in the property sector, saying its decline needed to be stopped and a recovery needed to be encouraged. Major cities including Guangzhou and Shanghai also unveiled measures aiming to boost homebuyer sentiment.

China’s Minister of Finance then earlier this month hinted that the country had space to increase its debt and its deficit. Lan Fo’an signaled that more stimulus was on its way and policy changes around debt and the deficit could come soon. The Chinese housing ministry meanwhile announced that it was expanding its “whitelist” of real estate projects and speeding up bank lending for those unfinished developments.
Some measures from the Chinese authorities have already been included in the IMF’s latest projections, Pierre-Olivier Gourinchas, chief economist at the IMF told CNBC’S Karen Tso on Tuesday.
“They are certainly going in the right direction, not enough to move the needle from the 4.8% we’re projecting for this year and 4.5% for next year,” he said, noting that the more recent measures were still being assessed and have not been incorporated into the agency’s projections so far.

“They [the more recent support measures] could provide some upside risk in terms of output, but this is the context in which the third quarter of Chinese economic activity has disappointed on the downside, so we have this tension between, on the one hand, the economy is not doing as well, and then there is a need for support. Is there going to be enough support? We don’t know yet,” Gourinchas said.
China last week reported third-quarter gross domestic product growth of 4.6%, slightly higher than the 4.5% that economists polled by Reuters had been expecting.
In its report, the IMF also noted potential risks to the economic measures.
“Government stimulus to counter weakness in domestic demand would place further strain on public finances. Subsidies in certain sectors, if targeted to boost exports, could exacerbate trade tensions with China’s trading partners,” the agency said. More

GUANGZHOU, China (Reuters) – If Donald Trump wins next month’s U.S. presidential election, Mike Sagan’s toy-making company will halve its China supply chain within a year.KidKraft, which also makes outdoor play equipment, had already shifted 20% of its production out of China to Vietnam, India and elsewhere after Trump introduced 7.5%-25% tariffs in July 2018, midway through his first term.Now Trump threatens blanket 60% tariffs on China, which Sagan sees as a game-changing “blunt” tool.He expects Kamala Harris to be less aggressive, but still likely to keep confronting China on trade.”The writing is on the wall that it’s going to be difficult,” said Sagan, vice-president for supply chains and operations at KidKraft. The firm has reduced its Chinese suppliers to 41 from 53 at the start of this year.”Question is: is it going to be extremely difficult or just difficult?”The tariff threat alone is rattling China’s industrial complex, which sells goods worth more than $400 billion annually to the U.S. and hundreds of billions more in components for products Americans buy from elsewhere. Of the 27 Chinese exporters with at least 15% of sales to the U.S. Reuters spoke with, 12 were planning to accelerate relocation if Trump returned to the White House. Four others, still fully in China, said they would open factories overseas if Trump raised tariffs. The other 11 had no specific plans around the election result, but most expressed concern they might lose U.S. market access.The producers expected higher tariffs on the world’s largest exporter to disrupt supply chains and further shrink Chinese profits, hurting jobs, investment and already sagging growth. A trade war would raise production costs and U.S. consumer prices even if factories relocated, they said.China’s ministry of commerce did not respond to Reuters’ questions on the impact of the U.S. election outcome on its economy, trade and diplomatic relations with Washington.Matt Cole, who co-founded m.a.d Furniture Design in 2010, is among those who haven’t moved production yet.His due diligence in Southeast Asia in 2018 showed he would still need to import 60% of furniture components from China. The costs of logistics and other inefficiencies were roughly the same as those added by a 25% tariff.Though he saw little value in moving six years ago, he now feels exposed.If Trump wins, he would move as much product to the U.S. as possible ahead of the tariffs, buying himself time to explore other bases.”Some people made a good decision going into third countries. I’m pretty sure they are not as worried about the U.S. election as I am,” said Cole. “I might be on a flight to Malaysia or Vietnam very, very soon.”KidKraft’s Sagan says his production costs outside China are about 10% higher and likely to rise. But lower standards are the bigger worry.If Harris wins, the relocation would proceed at a more considerate pace to reduce that risk.Quality is “one of the biggest trade-offs that you make in the very beginning because it takes time to secure the sub-supply chain” and “find the right people,” he said.”You really risk your integrity.”SURVIVAL THREATThe 2018 tariffs benefited Southeast Asia, which emerged as the preferred assembly point for U.S.-bound products that rely on Chinese supply chains.But they did little damage to Chinese growth and nothing to alter global economic reliance on U.S. consumption and Chinese production.China has in fact grown its share in global manufacturing since the tariffs, as it redirected credit to factories from the property sector, as part of President Xi Jinping’s push for new productive forces.The tariffs had a smaller impact on the U.S. trade deficit with China than the latter’s 2022 COVID-19 lockdowns, further evidence of their economic interdependence.But a Trump trade war 2.0 would be a moment of reckoning for many Chinese exporters, whose profits are dwindling under heavy deflationary pressure, caused by state-directed investment into factories at the expense of consumers.”If it’s 60% tariffs, nobody can handle it,” said Zeng Zhaoliang, the head of Guangzhou Liangsheng, which sells 30-40% of its low-margin cookers to the U.S.Tariffs also push costs higher elsewhere, says GL Wholesale president Lance Ericson, who has been sourcing goods from China for 30 years and is now scouting suppliers in India, Vietnam and Cambodia to replace the 40% in business lost since Trump’s presidency.”The Indians are already raising prices by 10%,” he said. “It’s going to be bad for China. It’s going to be bad for me.”Exports where China has an edge, such as electric vehicles, face high tariffs in the U.S., Europe, and elsewhere. Trump threatens to chase Chinese EV makers with 200% tariffs if they sell to the U.S. from Mexico, where BYD (SZ:002594) plans new factories.While backlash against Chinese exports targets mainly solar panels, EVs and batteries, some markets such as Indonesia and India are raising tariffs on China-made clothing, ceramics or steel.Other industries are taking notice.”We’re building factories overseas not just because of the U.S. market, but to prepare for changes in the global landscape,” says Cheng Xinxian, an executive at appliance-maker Hangzhou Yongyao Technology.CHINA RESPONSEThe earliest a 60% tariff could come into force would be mid-2025, economists say, reducing Chinese growth by 0.4-0.7 percentage points next year through diverted investment and jobs and output cuts.Beijing can mitigate this with more stimulus, export controls and a weaker currency, although these steps carry risks such as capital flight, debt and further trade conflict.”If Beijing is planning on giving rebates to factories and things like that, the tariffs are just going to go higher and higher,” said Larry Sloven, who has been sourcing and manufacturing products across Asia for international companies since the 1970s.”If you’re not spreading yourself, you’re dead, you’re in great danger.” Almost all exporters hoped Trump would moderate his stance if he wins.Yang Qiong, an executive at Chongqing Hybest Tools Group, which makes hand-drills, air nailers and staplers, says her firm would expand Vietnam facilities if Trump returned, but stay put if Harris became president.Mark Williams, chief Asia economist at Capital Economics, says a second Trump term would undermine China’s near-term growth through “challenges to a global economic order that has helped China prosper.” But it also risks splintering a U.S. coalition of allies from Europe to east Asia that are increasingly like-minded on Beijing.If Harris kept allies onside, “China would probably be more constricted economically over the medium term,” he said. More