China will keep driving the world economy

In a year when the US economy accelerated, it is worth bearing in mind that it was still China that drove the world economy, delivering an estimated 25 percent-plus of total global growth in 2018. That is a reality we will have to get used to, with a range of estimates forecasting that China will eventually overtake the United States as the largest and most influential economy in the world within the next 10 years.

But as we move into 2019, near-term challenges, such as trade tensions, debt and the sustainability of reforms, dominate the outlook. We (UBS) do not underestimate the importance or scale of these challenges, but we feel that, if properly managed, China still has undoubted potential to grow sustainably over the longer term.

Looking at trade, we estimate US policy measures will slow China's growth to 6.1 percent this year. China's response here will be crucial.