A widely-expected early resolution to the US-China trade dispute has yet to materialize, but China’s market (on the MSCI index) is up 24% this year. China’s bounce-back occurred despite the lagging trade negotiations and despite the trade recession and world economic downturn.

What China has demonstrated is that its palette of policy tools – monetary, fiscal, and infrastructure – is capable of replacing the lost export demand. The pain for China’s trading partners has been greater than for China itself.

Read more: South Korea, Taiwan benefit most from trade deal

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