What are the impacts of the current China-U.S. trade war on the Chinese economy? An analysis shows that while the immediate direct impacts on the Chinese economy are certainly negative, they are small in real terms, affecting less than 0.5 percent of Chinese GDP, and quite manageable. The full impact, including both direct and indirect effects, may be estimated at a maximum of a loss of 1.1 percent of Chinese GDP. For an economy growing at an average annual rate of 6.5 percent, a reduction of 1.1 percent to 5.4 percent is still a very respectable rate. The Renminbi is not likely to be devalued as a result of the trade war. However, there are also longer-term underlying forces at work. It is important for China-U.S. relations, and China’s relations with the rest of the world, in particular with the European Union and Russia, to be carefully managed going forward.