China-US trade friction won't derail global economic recovery

Trade frictions between China and the United States are unlikely to derail the global economic recovery and a relatively stable external demand could support China's exports to grow by around 7 percent this year, a Morgan Stanley economist said on Tuesday.

Robin Xing, chief China economist at Morgan Stanley Asia, said that China's GDP growth this year may slow to around 6.5 percent, led by slower infrastructure investment, but the country will see higher quality growth driven by greater spending in technology, a steady increase in family income and the continuous rise of domestic consumption.

China's nominal retail sales grew by 10.1 percent year-on-year in March, beating economists' expectation and underscoring the country's resilient domestic consumption, official data showed on Tuesday.

Growth of investment in transportation, storage and postal services will likely slow to 7 percent this year and further to 5 percent in 2019, down from 14.8 percent last year, according to the US investment bank's forecast.

Meanwhile, China's latest plan to further open the country's financial sector and capital markets could generate more capital inflows, and a more balanced capital account may prompt regulators to loosen restrictions on outbound investment, Xing said.

The annual growth rate of investments related to the Belt and Road Initiative could rebound to 14 percent in the next three years, according to Xing.