"The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board," Chairman Eric Xu told reporters at the launch of Huawei's annual report.
"Why wouldn't the Chinese government ban the use of 5G chips or 5G chip-powered base stations, smartphones and other smart devices provided by American companies, for cybersecurity reasons?"
To be sure, China and the United States are not without their troubles. Both countries are showing stubborn growth in their carbon footprints and military spending, to name just two disturbing trends. But the data of the last 25 years portray U.S.-China commerce as the most synergistic bi-lateral relationship in world history, bringing peace along with mutual prosperity.Putting another myth to rest – other than for the zombies – and there are lots of them.
In the run up to the Iraq War, then-US Vice President Richard Cheney declared that even if the risk of weapons of mass destruction falling into terrorist hands was tiny, say 1%, we should act as if it were certain by invading. The US is at it again, creating a panic over Chinese technologies by exaggerating tiny risks....With all respect due, Professor Sachs is simply wrong about the logic here. The logic for attacking Iraq had to do chiefly with control of the Middle East, the center of global energy. The logic for "containing" China the ultimate goal of which is to force China into the same fate as the USSR, is the Wolfowitz doctrine of permanent global domination.
This comes amid US President Trump's announcement that the signing site of the 'phase one' trade deal with China would be announced 'soon'.Sputnik International
A World Trade Organization’s arbitrator ruled Friday that China could impose $3.6 billion worth of tariffs on US goods over its unfair anti-dumping practices."We determine that the level of nullification or impairment of benefits accruing to China as a result of the WTO-inconsistent methodologies used by the United States in anti-dumping proceedings concerning products imported from China is 3,579.128 million USD per annum," the ruling read.The latest announcement by the WTO focuses on a case dating back long before the current trade dispute. It has to do with a complaint filed by China almost six years ago when it sought more than $7 billion in retaliation. Under this ruling, China can introduce higher tariffs against the US than is currently allowed in accordance with WTO rules. Beijing will also be able to choose which US products and sectors to target....
The real problem with the phase one accord announced on October 11 is the basic structure of the deal into which it presumably fits. From trade to currency, the approach is the same – prescribing bilateral remedies for multilateral problems.Project Syndicate
Of course, nuclear war is extremely unlikely. Although the Bulletin of the Atomic Scientists has placed the hands of its famous clock at five minutes to midnight, that doesn’t mean very much and never has. The fact of the matter is that world nuclear inventories, led by reductions in the United States and Russia, have never been lower, and none of the major powers expects a nuclear conflict in the way they did during the Cold War. To crib a line from Captain Jack Sparrow, however, nuclear war is not impossible, it’s improbable, and a nuclear war could take place in more ways than you might think, sparked by any number of occurrences from a pure accident to an intentional strike.
I’m going to focus here on a war that could involve the United States and its allies on one side, and Russia or China on the other. Nuclear conflict between India and Pakistan, or between a future nuclear-armed Iran and Israel, is unlikely but far easier to imagine than a global nuclear conflict. Indeed, this is one reason Americans don’t think about nuclear war very much anymore: they think it will happen somewhere else. (If a regional limited war takes place, however, you’ll know it: even a small exchange of nuclear weapons will create a global environmental catastrophe that will dwarf Chernobyl or Fukushima.)...A Top Expert Just Told Us 5 Ways a Nuclear War Could Start (Think Billions Dead)
New fourth round of tariffs on Chinese goods will hit US consumers and firms especially hard, just as the US enters an election season.Who blinks first?
...with no trade deal in sight, at 12:00am on Sunday, the Trump administration slapped tariffs on $112 billion in Chinese imports, the latest escalation in a trade war that’s ground the global economy to a halt, sent Germany into a recession, and given the market an alibi to keep rising because, wait for it, "a trade deal is imminent."
Only, it isn't, and 1 minute later, at 12:01am EDT, China retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods. The target list strikes at the heart of Trump’s political support - factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down....Zero Hedge
"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA."
The bottom line: It should go without saying that Trump doesn't have the authority to order U.S. companies to look for alternatives to China....Axios
For the first time since March 2008, PBOC fixed the yuan weaker than 7 per USD....
“I think the expectation is that this is going to escalate and get worse rather than coming to a place of agreement or just going away,” said Putri Pascualy, managing director at investment firm PAAMCO Prisma. “The risk in the market is political and political risk for investors is very difficult to handicap.”….
Basically, what he’s trying to do is blame China and blame foreigners for the fact that a lot of Americans are really hurting. They’re not doing better. They’re not earning enough to break even. They’re going further into debt. But Trump is really saying that it’s not our fault. It’s China’s fault. Don’t blame the financial mismanagement. Don’t blame the corporations. Blame China.
He pretends that they’ll pay instead of Americans. But when you levy a tariff, import prices are going to go up. Americans will pay more. The demands he’s making on China are nonsensical. No country is going to give away their autonomy and abolish their socialist economy and say, all right, we’re going to become an American satellite. We’re going to follow Thatcher and Reagan policies and let America buy our companies out and push us back into the 19th century Opium Wars.
The Opium Wars are over and so it’s now Trump’s trade war. So this is nonsense.What's going on now is that each side is playing a charade to convince that it is not to blame for the fallout from the faux trade war that is really a piece in the hybrid war that the US has directed at China, ultimately in the interest of regime change there.
On the weekend of July 19-21st, 2019, the University of Manitoba became the venue for the 14th Forum of the World Association for Political Economy (WAPE). This annual event represents a gathering of Marxist economists from around the globe, and aims to utilize current understandings on the subject to analyze and study the world economy, reveal its laws of development, and offer policies to promote economic and social progress on national and global levels.
One of the keynote speakers at this event was Michael Hudson. He had presented on his most recent paper, detailing how the world could defend itself from U.S. economic warfare.
China remains committed to its 40-year-old process of reform and opening up. But following through on this commitment will require China's leaders to find ways to manage escalating tensions with the US and avoid a costly – and potentially devastating – reconfiguration of the global economy....Project Syndicate
The trade imbalance part is relatively easy to tackle if China adopts an ‘open wallet’ approach to buy more from the US and resort to the ‘soybean strategy’ (commitment to purchase US agricultural products.) But then, how far this helps the US to tackle its multilateral trade problem is a different matter. (The US ran trade deficit with 102 countries in 2018.) Fundamentally, the problem lies in the US economy’s widening federal deficit over the next decade. In sum, tariff war with China can only backfire by shifting US imports to higher-cost foreign producers.India Punchline
On the other hand, the structural issues — causing tensions in agriculture, services, technology, intellectual property, technology transfer, non-tariff barriers — are much for formidable and no solution is in sight. To be fair, Trump acknowledged it saying the US ‘does not feel rushed to do a deal’. In order to get a sense of the multiplicity and complexity of structural issues that divide these two very different systems — the US and China — it is useful to dip into the pre-Osaka Chinese white paper released in Beijing on June 2 titled China’s Position of the China-US Economic and Trade Consultations.
The salience of the document lies in Beijing’s determination not to give in on its commitment to indigenous innovation, the important role played by State-owned enterprises, and the country’s strategic focus on emerging industries such as artificial intelligence, fintech, e-commerce, and health science technologies.
The above are non-negotiable principles for China, whereas, the US regards them to be existential threat to American prosperity and the US’ dominance of the world economy. Trump’s China advisor Peter Navarro starkly posed the existential challenge: “China has targeted America’s industries of the future… If China successfully captures these emerging industries, America will have no economic future.”
Crack open an iPhone and you’ll begin to see why President Donald Trump’s ongoing trade war with China doesn’t make sense.
On paper, imports of the popular smartphone and other goods from China look like a big loss to the U.S. The president certainly thinks so and has often cited the massive U.S.-China bilateral trade deficit – US$420 billion in 2018 – as a reason to fight his trade war.
When an iPhone X arrives in the U.S., it adds about $370 – its factory cost – to the deficit. All told, iPhones add tens of billions of dollars a year to the U.S. deficit with China, which is the gap between imports and exports. But, thanks to the globe-spanning supply chains that run through China, trade deficits in the modern economy are not always what they seem.…
Start with the most valuable components that make up an iPhone: the touch-screen display, memory chips, microprocessors and so on. They come from a mix of U.S., Japanese, Korean and Taiwanese companies, such as Intel, Sony, Samsung and Foxconn. Almost none of them is manufactured in China. Apple buys the components and has them shipped to China; then they leave China inside an iPhone.
So what about all of those famous factories in China with millions of workers making iPhones? The companies that own those factories, including Foxconn, are all based in Taiwan. Of the factory-cost estimate of $237.45 from IHS Markit at the time the iPhone 7 was released in late 2016, we calculate that all that’s earned in China is about $8.46, or 3.6% of the total. That includes a battery supplied by a Chinese company and the labor used for assembly....The National Interest
World trade is in deceleration mode.Real-World Economics Review Blog
