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China May Be Running Out Of Cards To Play In A Bid To Avoid A Trade War With U.S.

F-22Raptor

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If such thing as a consensus surrounding President Trump exists today, it is that 2018 promises significant action against China's protectionist economy. Some favor it, some are opposed, but most seem to concede it is likely. Last week's announcement of 30% tariffs on solar panels and 20% on washing machines, coming ultimately from Robert Lighthizer–Trump's Trade Representative and a notable China hawk–has been greeted not with shock, but expectation, and as a harbinger of much more to come.

Not to be outdone, China has been talking up its own potential for disrupting U.S. trade, but has yet to act. Again the consensus, if there is one, probably leans towards China having much more to lose than the U.S. from a straight trade fight. But it is against this backdrop that China's actions in its border zones and contested maritime domains should be examined.

The past as guide to the present

It used to be unfashionable to discuss Mao in the context of modern China, but such has been his rehabilitation by the current leadership, it seems churlish not to recall a few of his strategic insights. On the question of Taiwan, Mao was thought at one time to have been ambivalent to their independence (from Japan), but came to see the nationalist occupied island as a tool with which to navigate the superpower rivalry between the Soviet Union and the United States. China could, during periods of rapprochement or detente between the USSR and the U.S., ensure that cross straits tensions flared, obliging the U.S. to restate their support for Taiwan in some way, necessitating a few communiques from the USSR, leading to an inevitable diplomatic chilling.





For many years it was thought, and still is by many, that North Korea fulfilled a similar role today, as a temperature control on U.S.-China policy. If things get frosty, China would ensure that North Korea would become problematic. Solutions would then be sought, and China just happened to be able to help, restoring friendliness between the two big powers and reminding the U.S. that keeping China happy has ancillary benefits. Over the last year, for example, how often has Trump–not necessarily altogether sincerely–lauded Chinese help on the Korean peninsula. Yet Trump is either indifferent to this "help" or is merely playing China at their own game.

By the same token, China has been probing hubristically towards India, with border incidents springing up in both Doklam and Arunachal Pradesh. In the South China Sea, Chinese language has grown harsher. A recent U.S. "innocent passage" near Scarborough Shoal or Panatag (ironically also called "Democracy Island") provoked a response that suggested China might reluctantly have to start militarizing the SCS as a precaution, despite having been militarizing them since 2016.


In yet another show of power, China has been appearing in Japanese air and maritime space more frequently than usual, not to mention conducting increasingly assertive unilateral action in relation to Taiwanese airspace. Across the strategic board, therefore, China is on manoeuvres. And whereas in the past, these sorts of flare ups used to be localized and uncommon, now China appears engaged in all theatres at once. They are even talking up their interest in the Arctic, which will likely confuse, or possibly even infuriate, their sometime friends in the Kremlin.

It's the economics, stupid.

The real question is why? Why has China suddenly scaled up its provocations, pressed harder on the raw nerves of each of its regional rivalries? One simple answer is that they are now more powerful, no longer content to "hide their strength, bide their time," according to Deng Xiaoping's well known dictum. A more concerning answer is that their long standing habit of raising the temperature in their traditional hotspots, fully expecting the U.S. to worry about the chaos that might ensue and ease off on the economic pressure, no longer works. Trump, in other words, whether by intention or accident, is calling their bluff.

Of course, some will argue that China is not to blame for worsening relations with India, diplomatic spats with Japan and Taiwan, and broken promises in the South China Sea, but they all share one important factor, which is Chinese assertiveness. Equally, North Korea is routinely portrayed as a problem China can do little about, yet when it comes to it, sanctions agreed with the U.S. (either to shut off coal imports or reduce oil exports) always seem to be reneged upon, as the Kim regime struggles from one provocation to the next.

Now, as the sanctions begin to bite, first on steel and aluminium, then on washing machines and solar panels, and soon with respect to intellectual property violations, China will find itself no longer able to dangle progress on wider strategic matters as a way of forestalling a potential trade war, and will instead have to make good on their threats. It is in this light that China's escalating strategic challenge should be seen, not as a coherent vision of China's future, but an attempt to raise the stakes in a game of strategic poker rapidly coming to an end.

https://www.forbes.com/sites/dougla...w-how-rattled-they-are-by-trump/#758117f3a397
 
China annually exports about $2.1 trillion dollars of merchandise goods.

The US only imports 18.3% of China's total exports.

China’s Top Trading Partners | World's Top Exports (November 24, 2017)
"Below is a list highlighting 15 of China’s top trading partners in terms of export sales. That is, these countries imported the most Chinese shipments by dollar value during 2016. Also shown is each import country’s percentage of total Chinese exports.

United States: US$388.1 billion (18.3% of total Chinese exports)"
----------

Even if the US stopped ALL Chinese imports, China would retain 81.7% of its exports.

$2.1 trillion - $0.388 trillion = $1.7 trillion

Instead of $2.1 trillion in exports per year, China would have $1.7 trillion.

Not a big deal.

China's exports grew by 7.9% in 2017. To make up for the loss of America's 18.3%, it will only take China 3 years.

China's 2017 exports rose 7.9% in dollar terms — imports jumped 15.9% | CNBC (January 11, 2018)
"China reported a 7.9 percent jump in exports and 15.9 percent rise in imports — both in dollar terms — for 2017."

Smaller $1.7 trillion export base (with US excluded) x 7.9% annual trade export growth x 3 years = $2.1 trillion Chinese merchandise exports annually
 
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If such thing as a consensus surrounding President Trump exists today, it is that 2018 promises significant action against China's protectionist economy. Some favor it, some are opposed, but most seem to concede it is likely. Last week's announcement of 30% tariffs on solar panels and 20% on washing machines, coming ultimately from Robert Lighthizer–Trump's Trade Representative and a notable China hawk–has been greeted not with shock, but expectation, and as a harbinger of much more to come.

Not to be outdone, China has been talking up its own potential for disrupting U.S. trade, but has yet to act. Again the consensus, if there is one, probably leans towards China having much more to lose than the U.S. from a straight trade fight. But it is against this backdrop that China's actions in its border zones and contested maritime domains should be examined.

The past as guide to the present

It used to be unfashionable to discuss Mao in the context of modern China, but such has been his rehabilitation by the current leadership, it seems churlish not to recall a few of his strategic insights. On the question of Taiwan, Mao was thought at one time to have been ambivalent to their independence (from Japan), but came to see the nationalist occupied island as a tool with which to navigate the superpower rivalry between the Soviet Union and the United States. China could, during periods of rapprochement or detente between the USSR and the U.S., ensure that cross straits tensions flared, obliging the U.S. to restate their support for Taiwan in some way, necessitating a few communiques from the USSR, leading to an inevitable diplomatic chilling.





For many years it was thought, and still is by many, that North Korea fulfilled a similar role today, as a temperature control on U.S.-China policy. If things get frosty, China would ensure that North Korea would become problematic. Solutions would then be sought, and China just happened to be able to help, restoring friendliness between the two big powers and reminding the U.S. that keeping China happy has ancillary benefits. Over the last year, for example, how often has Trump–not necessarily altogether sincerely–lauded Chinese help on the Korean peninsula. Yet Trump is either indifferent to this "help" or is merely playing China at their own game.

By the same token, China has been probing hubristically towards India, with border incidents springing up in both Doklam and Arunachal Pradesh. In the South China Sea, Chinese language has grown harsher. A recent U.S. "innocent passage" near Scarborough Shoal or Panatag (ironically also called "Democracy Island") provoked a response that suggested China might reluctantly have to start militarizing the SCS as a precaution, despite having been militarizing them since 2016.


In yet another show of power, China has been appearing in Japanese air and maritime space more frequently than usual, not to mention conducting increasingly assertive unilateral action in relation to Taiwanese airspace. Across the strategic board, therefore, China is on manoeuvres. And whereas in the past, these sorts of flare ups used to be localized and uncommon, now China appears engaged in all theatres at once. They are even talking up their interest in the Arctic, which will likely confuse, or possibly even infuriate, their sometime friends in the Kremlin.

It's the economics, stupid.

The real question is why? Why has China suddenly scaled up its provocations, pressed harder on the raw nerves of each of its regional rivalries? One simple answer is that they are now more powerful, no longer content to "hide their strength, bide their time," according to Deng Xiaoping's well known dictum. A more concerning answer is that their long standing habit of raising the temperature in their traditional hotspots, fully expecting the U.S. to worry about the chaos that might ensue and ease off on the economic pressure, no longer works. Trump, in other words, whether by intention or accident, is calling their bluff.

Of course, some will argue that China is not to blame for worsening relations with India, diplomatic spats with Japan and Taiwan, and broken promises in the South China Sea, but they all share one important factor, which is Chinese assertiveness. Equally, North Korea is routinely portrayed as a problem China can do little about, yet when it comes to it, sanctions agreed with the U.S. (either to shut off coal imports or reduce oil exports) always seem to be reneged upon, as the Kim regime struggles from one provocation to the next.

Now, as the sanctions begin to bite, first on steel and aluminium, then on washing machines and solar panels, and soon with respect to intellectual property violations, China will find itself no longer able to dangle progress on wider strategic matters as a way of forestalling a potential trade war, and will instead have to make good on their threats. It is in this light that China's escalating strategic challenge should be seen, not as a coherent vision of China's future, but an attempt to raise the stakes in a game of strategic poker rapidly coming to an end.

https://www.forbes.com/sites/dougla...w-how-rattled-they-are-by-trump/#758117f3a397
This analyst is totally laughable.
This tarrif by Trump is nothing. Xi will loss no sleep over it.
China solar panels contribution to US market is not big. Neither is washing machine which are mostly your ally Korea's Samsung.

First of all. US solar manufacturing will not be able to ramp up production fast or high enough. US will still have to import from China. Except you the consumer will now pay the higher price.

This tarrif is just Trump making you think he is tough on China. :disagree:
 
Again the consensus, if there is one, probably leans towards China having much more to lose than the U.S. from a straight trade fight. But it is against this backdrop that China's actions in its border zones and contested maritime domains should be examined.

In a trade war, the one who can sustained the most will be the winner. A recovering US economy is in no shape to start a trade war. Yes, its the economy stupid. If a trade war tanks the US economy, it will certainly be the last straw that break the current administration, and Trump knows that well. That's why tariff are raised on items that are of little significance for the China trade, a symbolic move. And China will certainly respond, symbolically as well.
 
I do not remember americans talking and posting in internet these much just 10 years ago.
In last 10 years,North korea and China happened and grabbed americans by their pu$$y.
Now americans are being more like little Indian baby girls.
All day whining in internet.
 
China has 10x industry than the US, and actually roughly comparable to the combine industry of the entire rest world.

It seems that the US still don't get that the real power balance (or the lack of it) is so one-sided between the two, to the degree now China vs US is almost identical to the US vs some European colonial power right before WW2, it is only the west fake news that try to fool the world as if the US is still have much competition with China.The quicker the US try to show hand with China now, the sooner China will replace the US, and with a dotard and conman as your president (fit your country well), it will make China an even easier job.

Just bring it on, in an open trade war China will simply destroy the dollar-based system, which is the live-holding system of your Ponzi scheme economy, China has been the world largest natural resource buyers since years ago, has almost 50% of world industry, and being the largest trading partners to almost all countries in the world, it is long-overdue that RMB become the world currency instead of Ponzi worthless dollars.:lol:
 
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Some people just never learn. Notice how China snubbed Obama by forcing him to step down his Airforce One from the a*s of the plane? That's how China can treat the mighty USA. Trump didn't receive a royal welcome from Xi just because China is afraid of the US :rofl: , it's because China is giving him some face and rewarding him like how Chinese Emperors used to reward our friendly tribute states since ancient times. If he is executing the same Obama policies he too will experience the same kind of humiliation Obama had to go through, it's that plain simple.

Many are so dumb to think that if China is dumping the $1 trillion worthless piece of paper it's gonna hurt China, guess again. China has the world's largest foreign reserves $3 trillion as of now. US current debt is gonna accumulate to over $40 trillion by 2049 or perhaps even more, it's gonna end up with a BOOM. :lol:
 
I do not remember americans talking and posting in internet these much just 10 years ago.
In last 10 years,North korea and China happened and grabbed americans by their pu$$y.
Now americans are being more like little Indian baby girls.
All day whining in internet.
Well. There was a very popular us military forum that shutdown several years ago. Maybe some of them move here?
 
Trade war with America will sting for China, but not as much as Americans like to believe. Short term wise, some businesses will have to lay people off, but long term wise, companies will find substitute market. On the other hand, Americans will have to pay more for the same stuff, and American domestic workers are simply too lazy, too demanding and too unskilled, so its lack of productivity would further drive up product cost. China is pivoting away from export driven economy anyway and domestic consumption is growing. The largest Chinese companies now are technology, innovation driven instead of capital intensive manufacturing driven.

I welcome a trade war and I just want to watch American corporations lose their collective mind when they are locked out of the big Chinese market.
 

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