China locked and loaded as trade tensions escalate

[xunzi]

They are going to channel that hatred elsewhere especially China.

It's a scare tactic. That all there is to it. Expect Trump to scrap this tariff nonsense soon. So many US manufacturers bought stuff from China ready made and put their on brand logo to sell 4x to the US consumers. It's their bread and butter money making scheme. Trump rising tariff will only hurt these very own businesses and the consumers pay the price higher for nothing.

 

[Yingluck]

Believe me, being in the USA, there is going to be a war if commodity price went up all of sudden. This is life and death for most Americans. LOL

They are going to channel that hatred elsewhere especially China.

When China stop subsidizing USA, the 1% will be lynch in revolution. The USA elites know that.

For decades, USA elites have been shipping production to China, hollowing USA industries -- while Wall Street profit like nobody business. When Walmart is empty, rouge intellect will inform the people what is going on. Then angry people will storm Parklane, DC, SF.

USA elites will fly out in private chopper on their roof top, towards their super yacht -- and flee to New Zealand.

 

[xyxmt]

Chinese don't make a move without calculating effects of their move, they have calculated these moves from US and they are well in the position to counter it

 

[TaiShang]

There should be structural change in China economy. Why must USA consumerism be the main engine of demand pull economic growth?

Why not China consumer?

In 2017, consumption accounted for 60% of China's GDP. Export's share (in which the US holds some 14%) was 9.7%.

So, yes, I believe, China is moving fast toward a manufacturing, innovation, and consumption economy.

But, China will, I believe, continue to be a major export economy, as well, to make sure that consumption would not be generated by low savings and foreign debt.

They are going to channel that hatred elsewhere especially China.

That's difficult given the nuclear deterrence. So, they, in absence of failure to channel anger overseas, will most likely find other domestic scapegoats.

The deep division in US society can explain the ongoing build-up of such anger that cannot be diffused in a war overseas.

 

[powastick]

In 2017, consumption accounted for 60% of China's GDP. Export's share (in which the US holds some 14%) was 9.7%.

So, yes, I believe, China is moving fast toward a manufacturing, innovation, and consumption economy.

But, China will, I believe, continue to be a major export economy, as well, to make sure that consumption would not be generated by low savings and foreign debt.



That's difficult given the nuclear deterrence. So, they, in absence of failure to channel anger overseas, will most likely find other domestic scapegoats.

The deep division in US society can explain the ongoing build-up of such anger that cannot be diffused in a war overseas.

US is unable to reform, their corporate interest too strong. Caving into US demands is just kicking the can down the road. Eventually will hit everyone harder.

 

[Beast]

They are going to channel that hatred elsewhere especially China.

But they are not foolish to start WWIII or nuke war.

 

[Speeder 2]

Trump’s tariffs miss the mark as China changes
GLENDA KORPORAAL
The Australian12:00AM April 5, 2018


The site requires password, here’s a copy/paste version:


While US President Donald Trump is turning up the heat on Beijing with escalating tariffs against Chinese exports to the US, the long-term result may be the opposite of what he intended.



The changing structure of the Chinese economy — from manufacturing to consumption, from cheap production to more sophisticated value-adding — means that the Chinese economy is now rooted in expanding trade ties with the rest of the world.

“Made in China” and its image of the factories of Guangdong province over the border from Hong Kong is being replaced by an new policy of “Made by China”, where China increasingly outsources the production of its own brands to lower-cost counties in Asia, while its own increasingly sophisticated consumers have become a key market for locally made products.

Increased pressure from the US will only accelerate Chinese economic ties with the rest of the world, further validating President Xi Jinping’s Belt and Road trade and infrastructure initiatives, from China west to Europe and south and west to the rest of Asia.

The Trump tariffs may cause short-term pain for exports of Chinese hi-tech products and machinery to the US, but they will only fuel China’s determination to push its own production up the value chain.

The US trade war will hurt US consumers — who will pay more for the products they buy in local stores such as Walmart and Costco — and US manufacturers using Chinese-made capital equipment.

A report just produced by economists at the ANZ Bank, Raymond Yeung and Betty Wang, admits that a trade war between the US and China will hurt China.

But it shows the changing nature of the Chinese economy means that its growing domestic sector is an increasingly important source of demand for Chinese-made products, including electronics.

And, as global supply chains become more complex, any impact on demand for Chinese goods will flow through to demand for inputs sourced from the region, including Australia.

Offsetting that will be a determination by China to look elsewhere for its markets of increasingly sophisticated goods.

The report shows that US imports from China are worth $US505 billion ($656bn) a year, while US exports to China are worth $US130bn a year — leaving a trade deficit of $US375bn in China’s “favour”.

But behind that is the changing nature of the Chinese economy.

“China was a net importer of raw materials and exporter of consumer goods,” it notes.

“But the last decade has seen a rapid rise in net exports of capital goods, such as machinery.

“The local manufacturing sector is growing increasingly sophisticated to challenge developed countries.”

If the US tariffs bite, it could encourage Chinese manufacturers to look to Europe for new markets for their capital goods. In this context, Xi’s proactive Belt and Road initiative looks increasingly prudent — a diversification by China from its reliance on trade with the US.

The ANZ economists point out that while China is moving up the value-added chain in terms of production, China’s exports of hi-tech products as a percentage of its total exports have actually eased, from around 32 per cent in 2011 to around 28 per cent today.

“China has benefited from vibrant global supply chains in the last decade,” it says, “mainly by providing assembly services to foreign tech companies.

“Contrary to common perceptions, the share of hi-tech components in China’s exports has stagnated.”

This could be because more tech products are being produced and exported from cheaper countries in Asia. At the same time an increasing amount of the market for tech products is now in China itself.

The report homes in on the smartphone industry, which it notes is witnessing a shift from “Made in China” to “Made by China”.

“Chinese brands like Oppo and Huawei have joined the competition in recent years, supported by a national 4G (soon to be 5G) network. The size of the domestic network allows for rapid expansion.

“China has been the world’s factory for a long time. But by developing its own brands, the country can optimise the economic benefits from finished products such as research and development and marketing.”

The report argues that China’s goal is to become like Japan and Germany, producing increasingly high-quality products and allowing its citizens to consume high-quality foreign goods.

It points out that the Chinese government has actually been cutting tariffs on imported consumer products from baby formula to wine, to help its consumers access products not produced in China.

“Trade tensions with the US will not undermine China’s determination to be a champion of globalisation,” the ANZ report argues. “China will continue to champion globalisation just as the US and Japan did decades ago,” it adds.

As President Trump ramps up the protectionist rhetoric from Washington, Chinese president Xi Jinping is expected to use his speech to the opening of the Boao forum next week to confirm China’s view of the virtues of a more open global trading system — along the lines of his message delivered to the Davos forum in January of 2017.




GLENDA KORPORAAL
Associate Editor (Business)@GlendaKorporaal
Glenda Korporaal has been covering business and finance in Australia and around the world for more than thirty years. She has worked in Sydney, Canberra, Washington, New York, London, Hong Kong and Singapore and has interviewed many of Australia’s top business executives. Her career has included stints as deputy editor of the Australian Financial Review and business editor for The Bulletin magazine.

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[Clutch]

Increased pressure from the US will only accelerate Chinese economic ties with the rest of the world, further validating President Xi Jinping’s Belt and Road trade and infrastructure initiatives, from China west to Europe and south and west to the rest of Asia.

Bingo... Long run good for China, good for Pakistan, good for rest of the world... Bad for Amerikkka

 

[MultaniGuy]

Bingo... Long run good for China, good for Pakistan, good for rest of the world... Bad for Amerikkka

Lets hope China does what is in her best interests and for the rest of the world.

 

[Nan Yang]

Trump blink first

Trump softens on China as Beijing ramps up rhetoric in show of toughness over trade spat

Trump says China ‘will take down’ trade barriers as Beijing’s mouthpieces accuse Washington of abusing national security reviews and warn that Beijing has plenty of ammunition for a fight


PUBLISHED : Sunday, 08 April, 2018, 10:37pm
US President Donald Trump sent a friendly message to China on Sunday as Chinese state media ramped up their rhetoric in the trade dispute with the US, recalling China’s Korean war mettle and warning Washington that it was becoming the enemy of a multipolar world.
“President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do,” the US president tweeted.

“Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!” Trump added.
Trump’s message came as the US and China are teetering on the brink of trade war and the Chinese side is putting a tough face.

In a commentary on Sunday, Xinhua News Agency said the trade tensions were a “fight between unilateralism and multilateralism, and a fight between protectionism and free trade”.

“The US is set to become a public enemy of global multilateralism,” it said.

The Global Times, a nationalist tabloid in the People’s Daily stable, called on China to prepare for the worst as the US sought to stop China’s rise.
“The same sort of strategic resolve that China had in the Korean war is being built up across the country to beat the Trump administration’s trade attack,” it said in an editorial on Saturday.

The comments follow the White House’s decision to impose 25 per cent punitive tariffs on more than 1,300 Chinese goods after the Office of the US Trade Representative accused China of forced technology transfers, discriminatory intellectual property policies and government involvement in outbound acquisitions.
Trump threatened on Friday to slap tariffs on additional US$100 billion worth of Chinese products.

China has responded with duties on more than 100 US products, including soybeans, cars and aircraft, and says it has drafted other detailed countermeasures.

Citing State Intellectual Property Office senior official Zhang Zhicheng, Xinhua said the US’ accusations over technology transfers, IP and innovation were groundless and the tariffs would damage the US economy as well as that of the wider world.
Trump has also ordered the US Treasury Department to work on measures to address China’s acquisitions of US technology. Separately, the US Congress has been working on revising the rules of the Committee on Foreign Investment in the United States to expand its power to scrutinise overseas investment, especially from China, on national security grounds.
Communist Party mouthpiece People’s Daily quoted Ministry of Commerce researcher Zhou Mi as saying the US had abused national security reviews to block Chinese investment in the US and the administration’s intervention had become “increasingly frequent and direct”.

The US had not only set up “iron door” to limit the market access of foreign capital but also played tricks to hamper investors’ post-investment operations, putting Chinese investors in a weak position and offering them few solutions, People’s Daily said.
But China had ample weapons and ammunition to fight a trade war, the Global Timessaid.

“The suffering from a trade war will stimulate China to … innovate, which may offer a chance for China to more quickly narrow the gap in national power with the US,” it said.
Meanwhile, the China Chamber of International Commerce said that since the US tariff announcement its members had reported greater problems with honouring trade contracts and sharp rises in default risks.

“The US has severely disturbed the normal order in global trade and caused immeasurable losses to both countries’ industrial and business sectors,” the chamber said in a statement on Friday.

Source
http://www.scmp.com/news/china/econ...na-beijing-ramps-rhetoric-show-toughness-over

 

[TaiShang]

Trump blink first

Trump softens on China as Beijing ramps up rhetoric in show of toughness over trade spat

Trump says China ‘will take down’ trade barriers as Beijing’s mouthpieces accuse Washington of abusing national security reviews and warn that Beijing has plenty of ammunition for a fight


PUBLISHED : Sunday, 08 April, 2018, 10:37pm
US President Donald Trump sent a friendly message to China on Sunday as Chinese state media ramped up their rhetoric in the trade dispute with the US, recalling China’s Korean war mettle and warning Washington that it was becoming the enemy of a multipolar world.
“President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do,” the US president tweeted.

“Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!” Trump added.
Trump’s message came as the US and China are teetering on the brink of trade war and the Chinese side is putting a tough face.

In a commentary on Sunday, Xinhua News Agency said the trade tensions were a “fight between unilateralism and multilateralism, and a fight between protectionism and free trade”.

“The US is set to become a public enemy of global multilateralism,” it said.

The Global Times, a nationalist tabloid in the People’s Daily stable, called on China to prepare for the worst as the US sought to stop China’s rise.
“The same sort of strategic resolve that China had in the Korean war is being built up across the country to beat the Trump administration’s trade attack,” it said in an editorial on Saturday.

The comments follow the White House’s decision to impose 25 per cent punitive tariffs on more than 1,300 Chinese goods after the Office of the US Trade Representative accused China of forced technology transfers, discriminatory intellectual property policies and government involvement in outbound acquisitions.
Trump threatened on Friday to slap tariffs on additional US$100 billion worth of Chinese products.

China has responded with duties on more than 100 US products, including soybeans, cars and aircraft, and says it has drafted other detailed countermeasures.

Citing State Intellectual Property Office senior official Zhang Zhicheng, Xinhua said the US’ accusations over technology transfers, IP and innovation were groundless and the tariffs would damage the US economy as well as that of the wider world.
Trump has also ordered the US Treasury Department to work on measures to address China’s acquisitions of US technology. Separately, the US Congress has been working on revising the rules of the Committee on Foreign Investment in the United States to expand its power to scrutinise overseas investment, especially from China, on national security grounds.
Communist Party mouthpiece People’s Daily quoted Ministry of Commerce researcher Zhou Mi as saying the US had abused national security reviews to block Chinese investment in the US and the administration’s intervention had become “increasingly frequent and direct”.

The US had not only set up “iron door” to limit the market access of foreign capital but also played tricks to hamper investors’ post-investment operations, putting Chinese investors in a weak position and offering them few solutions, People’s Daily said.
But China had ample weapons and ammunition to fight a trade war, the Global Timessaid.

“The suffering from a trade war will stimulate China to … innovate, which may offer a chance for China to more quickly narrow the gap in national power with the US,” it said.
Meanwhile, the China Chamber of International Commerce said that since the US tariff announcement its members had reported greater problems with honouring trade contracts and sharp rises in default risks.

“The US has severely disturbed the normal order in global trade and caused immeasurable losses to both countries’ industrial and business sectors,” the chamber said in a statement on Friday.

Source
http://www.scmp.com/news/china/econ...na-beijing-ramps-rhetoric-show-toughness-over

SCMP is talking talking like a US-regime mouthpiece NYT or WashPo. But, that aside, I do not think Trump has had a sudden change of heart.

He is just playing Tweets and forcing others to dance to his tune.

I do not think China will soften up or give in to groundless accusations of IP theft or closed markets.

***

http://www.globaltimes.cn/content/1097016.shtml

It is worth noting that China said recent negotiations among trade officials from both countries have not happened. This news alone caused panic throughout US investment communities.

Several major financial indexes have been falling since the China-US trade dispute first started to escalate. Meanwhile, Trump has faced criticism within the Republican Party, and opposition voices in the agriculture and automobile industries are getting louder - trends that are unfavorable to the White House.

All things considered, Washington did not expect such strong reaction from China following the Section 301 investigation into China's trade practices, which has caused incredible discomfort for the Trump administration.

The White House wanted to use the new tariffs as a way to pressure and sideline China. With the support of right-wing media, the Trump administration tried to create a narrative where negotiations were underway, and Beijing would succumb to US demands.

As the possibility of a China-US trade war increases, American pessimism is on the rise. It seems Trump is hoping to inspire the American public with his latest trade tweet.

In speaking with the Global Times, scholars have mentioned the multitude of information and opinions are part of America's political culture. Since the China-US trade friction began, part of Washington's tactic has been to change tones erratically, ranging from "war cry" to using a more careful language. However, we can conclude that Beijing's strategy by sticking to its principles regardless of room temperature has proven to be an effective strategy.

 

[ashok321]

Trump’s China Trade War: Which States Will Suffer?

 

[TaiShang]

Trump’s China Trade War: Which States Will Suffer?

Aside from the regions that do export to China, another major casualty may be those US interests that are already invested in China and exporting from China to the US.

They will be targeted as well, if this turn into a full blown trade war.

This will also hit the US economy hard because a GM out of China will surely go bankrupt and Trump will find a giant state-owned company at hand.

The fact is the US is more embedded in China's market than vice versa. China has a much wider and deeper global trade penetration. There are few Chinese business interests in the form of greenfield investment in the US.

 

[ashok321]

China Trade War Latest: Trump Raises Stakes by $100 Bn

 

[TaiShang]

China Trade War Latest: Trump Raises Stakes by $100 Bn

That's old news. For Trump, even hours may bring about two conflicting policy decisions (twitter posts)



**

Wall Street, right-wing policies a blind spot for US

By Chen Gong Source:Global Times Published: 2018/4/8 21:18:40

Illustration: Xia Qing/GT

At a Senate Finance Committee hearing on March 22, US Trade Representative Robert Lighthizer provided a list of 10 high-tech Chinese industries that the US could target for tariffs, such as aeronautics, modern rail transport equipment and new-energy vehicles, "all of which he says China has said it plans to dominate in its 2025 plan," CNBC reported.

It is believed that from the viewpoint of the US Trade Representative, the US' goal is not to trade, but instead to take aim at China's overall industrial sector. This is equivalent to total suppression.

Japan, also in the firing line of US sanctions, understands this point well, and has said it will retain its previous sanctions on some steel imports from China.

In fact, even though it is the US imposing sanctions on Japan, and Japan should retaliate in kind, it will not do so.

Instead it also targets China, revealing that Tokyo has an essential understanding of US politics and has judged the international situation precisely. Japan balances its trade deficit with the US mainly by investing in the US.

In the past, we also suggested China should pay back part of the trade deficit to the US market through industrial investment, by using the capital account to balance the current account.

However, if a comprehensive US blockade is implemented, this path will not work, because they would rather block investment than receive it, and will insist on retrieving it from the current account. Thus crucial time will have been lost by going down this road.

However, there is also a blind spot in the current US strategy to block China - Wall Street. I have often pointed out that the main battleground of the trade friction between China and the US is Wall Street, not just in the trade arena.

The US financial market is now in turmoil. Almost all financial research institutions are warning that a global financial crisis is brewing.

The crisis awareness is now a consensus. Except for a few eternal optimists, almost everyone recognizes this huge danger, but no one knows when this major crisis will erupt.

If China were to one day issue a statement that shook the market, it is not beyond the realm of possibility that Wall Street's financial index may slump by 20 percent within a week. As a result, a global financial crisis will be detonated, and the effects will be felt worldwide. Who should be held to blame in such a scenario? None but the right-wing anti-globalization hawks of the Trump administration.

By triggering a trade dispute with China, the US is juggling with knives. As we know, the blind spot in the US policy is Wall Street, so let's imagine what the world market will experience if it loses its two major trading nations.

In the face of the trade friction brought on by the US, we must look at the real problem with clarity, as well as take Trump's right-wing strategy into consideration. This is the pain point for the US and its partners, and also the moment all investors who want to short-sell are waiting for.