Released on April 4th, the United States to China tax products recommended list, China unveiled the same strength of counter-measures (in accordance with our "a trade war with China: causes, effects, outlook and deal with" in "precision strike back U.S. agricultural products, cars, planes, etc., to promote peace" strategic anticipation). At present, China and the United States are facing each other in a tit-for-tat way. The us has cracked down on China's strategic emerging industries, and China has returned fire to America's dominant industries and to the midterm elections. At the same time, China and the us have left room for further negotiations.
Plans in the future a trade war with China situation, there are two main scenarios: 1) short-term play while talking, to "upgrade - contact test - and then upgrade - contact test again - compromise" possibility is big, the end of the play is to at the negotiating table for a good price, bucket and not broken. But in the medium and long term, with the economic strength of China and the United States and economic and trade competitiveness, trade frictions are long-term and increasingly serious. 2) as control misconduct, a trade war with China comprehensive upgrade, do not rule out further expanded to battle the financial, economic, resource wars and geopolitical battle, "come on, hurt each other," the hegemony of the United States will use it since world war ii to establish system from trade, finance, foreign exchange, military, etc to contain China, new iron curtain will be falling over the Pacific Ocean. We believe both sides should strive for the first, the end of the trade war only gu gu, China is in great revival period of strategic opportunities, don't want to play will not be afraid, American public opinion does not support a trade war escalation also hurt their own interests.
The subsequent response options include: around the "made in China 2025" expanding the scope of a trade war with China, Chinese residents to travel and study abroad, checks on the Chinese enterprises to direct investment, further tightening of China's high-tech products exports and intellectual property rights transfer, surrounded by coalition Allies to contain China, expanded to finance wars, currency wars, economic, resource wars, etc. America's declining economic power and still exist a strong military hegemony, China's rising economic power and still childish military power, a major challenge will be the future of global governance and unstable factors.
China's subsequent response options include: accurate response to us agricultural products, cars, aircraft, etc., to promote and promote; Joint eu, Asia, Africa and other countries and regions to expand One Belt And One Road; Exchange rate depreciation; Selling U.S. debt; Limiting U.S. corporate investment; Develop a new country strategy. The external hegemony is an extension of internal strength, and a trade war between China and the United States. Our best response is to push for a new round of reform and opening up with greater determination and courage.
If a trade war next upgrade, considering the agricultural products involving people's livelihood, suggest we concentrate superior forces at the inlet of alternative strong interest of our core cars and communication products hit the United States, "than a man's ten fingers is broken one", differentiation trump's support.
Mr Trump's launch of a trade war is intended to open up the Chinese market, seek midterm elections and contain China's rise, taking advantage of the anti-globalisation trend of domestic populism and trade protectionism. We in the root of the sino-us trade imbalance: common knowledge "to trump a trade that seven deep cause of the sino-us trade imbalance has long-term and fundamental, primary responsibility in the United States, a trade war cannot solve the: economic structure of China and the United States and the global value chain division of labor status difference, international reserve currency, dollars exorbitant privilege, the low savings and high consumption, restrict high-tech exports to China, the United States a large number of multinational companies investing in China.
We don't have a trade with the United States, the war years ago was the visionary reformer that have embraced globalisation has won, and decades ago excessive consumption, unrestrained by the United States to send $exorbitant privilege abuse and lost, lost to 60-70 s Europe, lost to Japan in the 80 s, and now lost to China, the future will also be lost to India, Indonesia, Vietnam, etc. In 2017, China's trade surplus with the United States was $275.8 billion, accounting for 65.3 percent of China's trade surplus. If America does not change, it will continue.
According to the international political rule for a long period of time, the change of the global economic pattern then sooner or later, will trigger a reshuffle of the global political pattern, a trade war with China just opened the prelude of global leadership change. This is not simply a trade war, but a competition for who is more committed to reform and opening up. At the same time as the United States is offering protectionist and populist flags, China has announced to the world that it will push for a new round of reform and opening up with greater and greater resolve. Now is the time to test both sides' strategic wisdom and strength.
Let us light the candlelight, step out of the dark moment of china-us economic and trade relations, abandon trade protectionism and cold war thinking, and bring more openness to the benefit of our people and the world!
Related articles of Evergrande institute "sino-us trade war" :
Sino-us trade war: causes, effects, prospects and responses
A trade war between China and the United States: what does the United States think, what do we do?
The root of sino-us trade imbalance: a common sense of trade for trump
First, China and the United States trade war into the second round: tough test the other side.
In the early hours of April 4, the U.S. trade representative's office released a list of proposals for a $50 billion tax on China's 301 survey, with a proposed tax rate of 25 percent. That afternoon, the Chinese government released a list of the same amount and scale of tariffs on the us. In the second round of trade war between China and the United States, there are three noteworthy features:
1. The confrontation between China and the United States, the time is highly connected, and the intensity and scale are completely equal. In the first round, the United States announced on March 8 that it would impose tariffs of 25 percent and 10 percent on imports of steel and aluminum products from March 23. On March 23rd China announced that it would impose tariffs of 15 per cent and 25 per cent on imports of $3bn worth of fruit and pork from the us, starting on April 2. In the second round, the United States said on March 23, will be announced within 15 days recommended list $50 billion commodity imposing a 25% tariff on China, April 4, after the United States published suggested list in the morning, China announced on the afternoon of the same size the same strength of the duty list. Unlike in the past, the stronger China has been more confident and confident in the sino-us trade conflict.
2. China and the United States have tested each other's CARDS, and the United States has cracked down on China's strategic emerging industries, and China has returned fire to the U.S. advantage industry and the field of ticket sales. America's China tax products recommend listing involving China aerospace, information and communication technology, robotics and mechanical industries, covering key areas of "made in China 2025", designed to weaken China's strategic emerging industries, to contain China Renaissance. The U.S. secretary of commerce said on April 4 that the United States would not lose a trade war.
Chinese counter listing involving U.S. soybeans and other agricultural products, automobile, chemical, aircraft, etc., are areas of trade advantages of the United States, major soybean producing areas is also the last trump constituency election, this is completely in line with us on March 24 in Japanese "a trade war with China: causes, effects, outlook and deal with" suggested in precision strike back. For example, in the case of soybeans, the United States exported 32854 million tons of soybeans to China in 2017, accounting for 62% of all U.S. soybean exports, accounting for 34.4% of China's total imports. The Chinese government says it will stay with the United States if it wants to fight a trade war.
3. Both China and the United States leave room for follow-up negotiations. In the previous on March 28, the U.S. trade representative's office said it would announce tax listing a public-comment period from 30 days to 60 days, which means that the United States to China tax listing not implemented before early June. China announced on April 4 that the final measures and effective time would be announced separately.
2. Trump's intention: to open the Chinese market, seek midterm elections and contain China's rise, but the responsibility for deficit is mainly in the us, and a trade war cannot solve the fundamental problem.
1, the trump to provoke trade war is the direct cause of sino-us trade imbalance, trying to further open the Chinese market, trade war deeper reason lies in maintaining the American hegemony to suppress the rise of China.
According to the us statistics, the us trade deficit with China in 2017 was $337.2 billion, up 9%, accounting for 59.3% of the us. Among them, the us trade deficit with China reached us $375.7 billion, an increase of 8.2 percent, accounting for 46.3% of the U.S. trade deficit, more than the sum of the nine economies. China's trade surplus with China was $38.5 billion, up 1.2 percent, accounting for 15.9 percent of the U.S. trade surplus.
The trump administration believes China's market distortions lead to unfair competition. In October 2017, the Commerce Department memo about China's non-market economy status, the United States based on the role of China in the economy and the relationship between the role and the market and the private sector, think that China is not fully practice the market principle, fundamental to the economic distortions. Disputes over intellectual property rights have long been an important issue in sino-us relations and sino-us economic and trade relations. China has long been listed as one of the countries with the most serious ipr infringement. One of the main reasons why the trump administration has launched a 301 investigation and provoked a trade war is to accuse China of "stealing" intellectual property rights and forcing us companies to transfer technology. The current U.S. government believes that China's entry into the WTO is a mistake, and that China is moving further away from the market economy.
Under this background, the duties, such as the United States has asked China to further reduce auto open agricultural markets such as energy, financial services such as investment barriers, improve the market environment, and as soon as possible to take concrete measures to cut down the trade surplus of $100 billion. On April 4th Mr Trump tweeted that the us had a $500bn trade deficit with China and stole $300bn from China's "theft" of intellectual property.
At a deeper level, the United States is trying to re-enact the U.S. -japan trade war of the 1980s to contain China's resurgence. In 2017, China's GDP is $12 trillion, or 63 percent of the U.S. economy, and China's economy is growing at 6.9 percent, well above the 2.3 percent rate in the United States. If GDP growth of around 6% is about a decade or so, around 2027, China is poised to overtake the United States as the world's largest economy and return to the top of the world. In the face of China's revival, the United States has a strong sense of crisis. The essence of the trade war between China and the United States is that the reigning hegemon is suppressing the emerging powers.
2, different, the trump to provoke a trade war with China took advantage of the domestic populism and protectionism against globalization trend, both to carry out the campaign promises more seeking re-election in the future.
As emerging economies such as China's rapid development, the relative decline, especially its traditional manufacturing industry gradually lose competitiveness, "rust belt" (refers to) of the old industrial bases from prosperity to decline. After the us subprime mortgage crisis in 2007, long-term implementation of quantitative easing and although low interest rate policy to stimulate the U.S. economic recovery, but also that the underlying earnings deteriorated, further widening the gap between rich and poor. Dario believes that American society is divided into two parts: one is the upper class with more wealth, and the other is 40% of the total population. The other is the underprivileged, which makes up 60% of the population.
Under this background, the American unilateralism, populist flush, 2017 to trump "America first", "let us once again great manifesto" wins the presidency, and reflecting in its guidelines, trump presidential campaign counter attack response silence most of the calls. Is the United States in 2018 mid-term election year, will usher in the mid-term elections in November, may will enter the electoral vote of dense phase, also intent to play trump BaoHuPai "trade" to seducing voters, to continue to maintain the republican dominance in both the house and senate, and re-election for the future.
And, unlike in the past, when the sino-us trade war broke out, American companies in China, Boeing aircraft and other big interests in China did not lobby the us government against a trade war.
3. The seven deep-rooted reasons for china-us trade imbalance are long-term and fundamental, and the responsibility lies mainly with the us, which cannot be solved by a trade war.
On April 1, the root of sino-us trade imbalance: a common knowledge course on trade in trump:
1) global value chain division, leading to "export in China, value-added in Europe and America; The traditional accounting system overestimates the trade surplus between China and the United States.
2) the status of the international reserve currency of the us dollar, it is necessary to maintain the trade deficit to export the us dollar and provide the international liquidity (triffin dilemma).
$$3) exorbitant privilege, the international reserve currency status gives us a privilege, which can be unrestrained, relying on the dollar, sending U.S. debt way access to goods and resources in other countries, large deficits under this inevitably leads to trade and capital under a financial surplus. The superprivilege of the dollar amounts to the imposition of seigniorage around the world to maintain its hegemonic system.
4) low savings and high consumption in the United States inevitably lead to large external trade deficits, and the underlying causes are the high welfare system, low interest rate environment, and dollar financial hegemony.
5) the huge labor cost difference between China and the United States determines China's comparative advantage in low-end manufacturing, but the United States has blocked the export of high-tech products to China. The U.S. manufacturing sector accounts for only 11.7 percent, and the service sector accounts for about 80 percent. The industrial structure of the United States determines that production will not meet domestic demand, which requires a large amount of imports.
6) the United States restricts high-tech exports to China, which accounts for nearly 40 percent of the deficit in China, but the U.S. has a surplus in high-tech exports to other countries.
7) the huge export trade of foreign-funded enterprises and the contribution of 57% of China's goods trade surplus by foreign-funded enterprises are the important beneficiaries.
Don't change the root cause of the sino-us trade imbalance, even if the U.S. can unilaterally reduce the trade deficit with China, but its overall trade deficit would still continue, only the deficit from China to India or Vietnam and so on. Like the trade war between Japan and the United States in the 1980s, the trade imbalance in the United States was not resolved, but instead shifted to China and Germany.
Three, the sand table puts forward the future situation: short-term edge to talk, the two sides compromise after many temptations, but must deeply understand the sino-us trade friction long-term and increasingly serious.
The future situation a trade war with China there are two main types of plans: 1) short-term play while talking, to "upgrade - contact test - and then upgrade - contact test again - compromise" possibility is big, the end of the play is to at the negotiating table for a good price, bucket and not broken. But in the medium and long term with the economic strength of China and the United States, trade frictions are long-term and increasingly serious; 2) as control misconduct, a trade war with China comprehensive upgrade, do not rule out further expanded to battle the financial, economic, resource wars and geopolitical battle, "come on, hurt each other," the hegemony of the United States will use it since world war ii to establish system from trade, finance, foreign exchange, military, etc to contain China, new iron curtain will be falling over the Pacific Ocean. We think that the first possibility is larger, the end of a trade war with China can only gu gu, China is in the great Renaissance of period of strategic opportunities, don't want to play, the American public opinion does not support a trade war escalation also hurt their own interests.
1. In the short term, we will talk about the possibility of "escalation -- contact testing -- re-escalation -- re-contact testing -- compromise between the two parties".
Although some high-end manufacturing in China has formed a competitive relationship with the us, the overall complementarity between China and the us is still strong. According to the trade structure of midea, China mainly exports electric audio-visual equipment (including home appliances, electronics) and textile clothing to the United States.