China-US relations are not in a new cold war but in a situation of intertwined competition in which their interests are tangled. This cold wrestle is aimed at finding a new equilibrium of interest between China-US through each issue.
The US, long the world’s largest destination of FDI inflows, lost the top position for the first time in decades. Its ranking slid to third, with total FDI inflows of $46.5 billion, less than China ($70.2 billion) and the UK ($65.5 billion).
China does not need and will not seek a release of pressure on commodity exports by guiding the RMB to unilaterally depreciate sharply. In fact, this is also unfavorable to China in its efforts to attract foreign investment and enhance its import capacity.
It’s impossible for the US be merciful to China, and China is certain to lower its expectations regarding cooperation with the US.
China had never owed anything to the US and was full of goodwill towards the US.
It is easy to take sides politically or ideologically, but politicization of trade issues is itself a poison pill that no one will be able to escape. The poison pill as embedded in USMCA is after all poisonous, not only for China, but also the world at large.
The short-term dividends of Trump’s new fiscal, trade and financial policies will gradually be exhausted, and the structural factors that limit economic growth and the negative effects of the trade war will begin to emerge.
China now is clearly on the edge of anger, what will be the final card on the table? Let’s find out.
Talks are always better than no talks. Ultimately, no one really cares who took the first step because the essence of the whole matter is to contain the increasing damages to both economies.
United States Secretary of the Treasury Steven Mnuchin sent a proposal to China on September 12, seeking the initiation of a new round of trade negotiations. Gao Feng, spokesman of China’s Ministry of Commerce, responded the following day that China had received the proposal and welcomes talks. Beijing and Washington are now working out the negotiation details. Escalating trade conflict is not in line with interests of either party, Gao emphasized. Since the trade war was first waged by the US in July, the US has already levied tariffs on $50bn of Chinese products, while China has retaliated with measures worth an equivalent amount. Now, Trump’s government is considering a duty increase on $200bn of Chinese products. With these factors in mind, how should we interpret the signal for talks the US has sent out at this crucial time? Does it indicate a turnaround? Increasing Domestic Pressure on Trump’s Government From running a presidential election campaign to taking office, Trump has always held a tough position on trade issues. He has placed the blame for US trade imbalances on other countries, saying they take advantage of the US. Hence, by bearing the torch of trade protectionism, Trump has shaped himself in the image of a strongman who fears no international pressure and always safeguards US interests. This image has won […]
It is not hard to find cases where the United States unilaterally imposed pressure on China on issues such as human rights, Tibet or Taiwan. These problems have all ultimately been settled, but never by means of China making one-sided concessions.
With the ongoing trade friction between China and the United States, the Port of Los Angeles has added its voice to those calling for a negotiated settlement rather than imposing tariffs, believing the latter could halt the port’s booming business built up over the past two fiscal years.
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