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China warns of 'necessary response' in event of trade war with US [Copy link] 中文

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Post time 2018-3-8 18:49:31 |Display all floors


BEIJING: China will respond as necessary in the event of a trade war with the United States, Foreign Minister Wang Yi said on Thursday, while warning that such a war would only harm all sides.
US President Donald Trump is expected to establish tariffs of 25 per cent on imported steel and 10 per cent on imported aluminum this week, but the White House has said there could be a 30-day exemption for Mexico and Canada and some other countries based on national security.
Such a move aims to counter cheap imports, especially from China, that Trump says undermine US industry and jobs.
Trump’s administration has faced growing opposition to the tariffs from prominent congressional Republicans and business officials worried about their potential impact on the economy.
Trade tension with the United States has jumped to the top of the list of risks facing China this year, Zhou Hao, senior emerging markets economist at Commerzbank, told the Reuters Global Markets Forum this week, and its latest data showed exports surging 44.5 per cent in February from a year earlier.
Wang, speaking on the sidelines of an annual meeting of China’s parliament, said China and the United States did not have to be rivals, and history showed that trade wars were not the correct way to resolve problems.
“Especially given today’s globalisation, choosing a trade war is a mistaken prescription. The outcome will only be harmful,” Wang said.
“China would have to make a justified and necessary response,” he said.
Wang said China had a long way to go on its path of modernisation, and that it “will not and need not displace the United States”.
Trump addressed trade with China in tweets on Wednesday, demanding that it lay out plans for reducing its trade surplus with the United States by $1 billion, which appeared to have been raised during a meeting with a top Chinese official last week.
“China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States,” Trump tweeted, without saying where the message had been conveyed.
In the tweet, Trump mistakenly referred to a deficit where China runs a surplus. It was also not clear if he meant that amount, which would only be about 0.27 per cent of the record $375.2 billion goods trade surplus China had with the United States last year.
Trade tensions between the world’s two largest economies have risen since Trump took office in 2017, and although China only accounts for a small fraction of US steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.
‘Few alternative sources' The US tariffs are expected to go into effect in two months, though economists see little immediate impact on China.
Capital Economics estimates China’s exports of steel and aluminum to the United States account for less than 0.1 per cent of its gross domestic product, as both are already limited by anti-dumping measures.
“On paper, China has more to lose from a trade war – it exports far more to the US than it imports. But there are few alternative sources for the main products the US buys from China,” the research firm said in a note on Wednesday.
US soy beans, aircraft and cars are widely seen as vulnerable to possible retaliation from Beijing.
Trump is also considering trade sanctions against China under a “Section 301” investigation into its intellectual property practices and pressure on foreign companies for technology transfers.
Diplomatic and US business sources say the United States has all but frozen a formal mechanism for talks on commercial disputes with China because it is not satisfied it has met its promises to ease market restrictions.
China’s latest trade data released on Thursday showed its February exports up 44.5 per cent from a year earlier, beating market expectations, while imports grew 6.3 per cent.
That left it with a trade surplus of $33.74 billion for the month, and a January-February trade surplus with the United States of $42.92 billion.
China’s trade performance rebounded in 2017 and logged a strong start this year thanks to robust demand at home and abroad.
But the tensions with the United States are clouding the outlook for exports, while a cooling property market may curb domestic demand for imported raw materials such as iron ore.

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Post time 2018-3-8 20:30:32 |Display all floors
This may well be a great opportunity for China to develop trade with the other countries Trump is at war(trade) with.

Anger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured. Mark Twain

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Post time 2018-3-8 20:37:47 |Display all floors
Which side has the divisions best-arrayed to bring victory in this conflict?

One lesson from real warfare is that battles tend to be won and lost on the home front -- and in that respect, the U.S. is laboring under a significant handicap. Its major imports from China are overwhelmingly consumer goods, where the predictable effect of tariffs will be to increase costs to American citizens, as Gadfly's Tim Culpan points out. The largest categories are computers, phones, knitwear, other clothing, and toys.
It won't be easy for U.S. retailers to replace these goods. In every one of the consumer sectors where Chinese exports to the U.S. were worth more than $5 billion in 2016, China accounted for more than one-third of U.S. imports by value. Global supply chains can't source from rival regions fast enough to avoid a tax on shoppers' wallets, should further tariffs be imposed.

The ideal solution, from Trump's perspective, would be for domestic production to come to the rescue -- but that horse has long bolted.

In clothing manufacturing, the U.S. production-line workforce has shrunk by more than 90 percent since 1990, and the electronics industry has lost almost 40 percent of its jobs. With China itself seeing industries quitting for cheaper locations in South and Southeast Asia and Africa, the chances of those jobs coming back to the U.S. are slim.

By contrast, China imports mainly intermediate products and parts from the U.S., led by soybeans, aircraft, cars, integrated circuits and plastic. The cost of any retaliatory tariffs on those products will pass through a number of producers before any citizens feel it in their hip pockets -- and dictatorships don't have to worry so much about popular backlash, anyway.

If Xi Jinping chooses to fight back, watch what happens to the semiconductor industry. A quarter of U.S. chip exports go to China, but that constitutes just 3.8 percent of the People's Republic's total imports of integrated circuits. A relatively small shift in Chinese business patterns could deliver a devastating blow to one of America's most successful export trades.
Soybeans, too, could come in the firing line. China swallows up more than 60 percent of America's exports of the legume. Putting levies on those imports will turn up the heat at a time when global soybean prices are at a two-year high, raising pressure on the processors and farmers who use soy for animal feed -- but prices for pork, the most critical end-use sector in China, have been declining for 12 straight months, so they could afford to rise a little.

Bloomberg
Anger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured. Mark Twain

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Post time 2018-3-9 01:42:39 |Display all floors
Saul Post time: 2018-3-8 20:37
Which side has the divisions best-arrayed to bring victory in this conflict?

One lesson from real w ...

Too bad, the only super power will lose in this round of game.

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Post time 2018-3-10 03:14:10 |Display all floors
This post was edited by HailChina! at 2018-3-10 03:15

So the best China has got is to say that China will not and need not replace the united states? For goodness sake. Why not use this opportunity to argue for true open trade as opposed to protectionist capitalist 'free trade' in the name of consumer rights? Chinas production advantage driving down prices is good for business and consumers. Nobody is forcing US consumers to purchase cheap Chinese goods. Plus most US companies themselves want to set up factories \industry in China to take advantage of Chinese industrial advantage. This is a debate that China can win yet all China does is tell us that China will never displace USA? Not everyone in the west wants to hear that anyway - Harley Davidson's, bourbon and blue jeans". There is hate behind that comment. Hate. Hate for the Americans. Can't China see that? We do not all love the $%$%ing Americans and want to see them maintain their status for eternity. Hate. Harley Davidson's, bourbon and blue jeans. It is not right for these stupid Americans to be on top and we all know it.

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Post time 2018-3-10 03:35:49 |Display all floors
First thing you need to do is give me a job. Not in propaganda ministry. I need my own ministry.

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Post time 2018-3-10 14:39:08 |Display all floors
HailChina! Post time: 2018-3-10 03:35
First thing you need to do is give me a job. Not in propaganda ministry. I need my own ministry.

Give you a job? Why don't you go out and earn one?

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