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- US-China phase one trade deal won’t lead to "economic nirvana" - Larry Summers
US-China phase one trade deal won’t lead to "economic nirvana" - Larry Summers
The so-called phase one trade deal that the U.S. and China are expected to sign won’t solve all the problems the global economy faces right now, former U.S. Treasury Secretary Larry Summers said.
U.S. President Donald Trump said both countries were looking for a location to sign the partial deal, which could take place this month. That development has fueled recent optimism in financial markets.
“I’m all for it,” Summers told CNBC from the Credit Suisse China Investment Conference in Shenzhen, China.
“But I think we’ll be kidding ourselves if we thought we were one signing ceremony away from some kind of economic nirvana. There are deeper and larger issues that are holding back rapid global expansion,” he added.
Summers said even if both sides sign the partial deal as planned, “there will still be large tensions and uncertainties” between the two countries — which would weigh on the global economy.
In the coming years, structural changes within the Chinese economy means the country would contribute less to global growth than it did before, according to Summers.
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