Likewise, we should not succumb to the temptation to sacrifice the achievement of a level playing field for innovative advances that are aimed at regulatory arbitrage. But I don’t want to sound too negative. It is not unknown for new innovations to bring about euphoria, which in turn fuels bubbles that eventually burst.
The second factor is developments in the U.S.-China trade friction, which is particularly crucial among various economic policy uncertainties. Chart 4 shows the impact of the trade friction on GDP for the United States and China, estimated by the IMF in June 2019. The left-hand bar graph represents the deviations from baseline projections of the real GDP levels for the two countries.