A white paper published by China last month revealed that the country can economically withstand the effects of a long, drawn-out trade war with the United States, but it took extra measures for preparation when the Chinese central bank cut the amount of reserves held by banks.

The move was announced on Sunday when the People’s Bank of China instituted a 100 basis points cut to the reserve requirement ratio for a majority of banks, resulting in a capital injection of 750 billion yuan or $109.2 billion to help shore up the banking system. The central bank confirmed that this latest policy move was done in accordance with the pace of the economy as opposed to an accommodative move.

Nonetheless, the words alluding to resiliency may be just that, according to some experts and that the situation is more dire than China is leading the markets to believe.

“China is probably facing its worst period since the global financial crisis. All news is against it,” said Fraser Howie, an independent analyst who has covered China and its financial system.

“They certainly want to play down any talks of panic or near panic … but they’re clear it’s not business as usual in China,” Howie added.

Related: Japan ETFs Brush Off Escalating Trade War Fears

JP Morgan Predicts Trade War Goes ‘Full-Blown’

If the current tariff-for-tariff tradeoff between the United States and China resembles a mere scuffle, multinational investment bank J.P. Morgan expects it to escalate into a full-blown trade war. Just recently, the firm lowered its ratings for Chinese stocks from neutral to overweight, citing that the trade wars will heighten to a point where its economy is substantially impacted.

“A full-blown trade war becomes our new base case scenario for 2019,” emerging market strategist Pedro Martins Junior said in a note. “There is no clear sign of mitigating confrontation between China and the US in the near term.”

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