“Chinese export firms need to pay export taxes but can get a rebate once the products are sold overseas,” says Mu. One is to file additional complaints against American tariffs with the World Trade Organization (WTO). Another way Beijing can fight the trade war is by weakening the yuan further, offsetting the impact of tariffs. “NASDAQ 100 is already showing some signs of a top,” says Mu.“A trigger, such as escalated trade war, could make it happen.”And there’s the yuan-dollar rate, which is stable for now, with the PBOC’s support. But this stability may not last, if China decides to use it as a weapon in the trade war.

Source: Forbes September 15, 2018 18:11 UTC