Exclusive: Trump calls Chinese ‘grand champions’ of currency manipulation


U.S. President Donald Trump is interviewed by Reuters in the Oval Office at the White House in Washington, U.S., February 23, 2017. REUTERS/Jonathan Ernst

U.S. President Donald Trump is interviewed by Reuters in the Oval Office at the White House in Washington, U.S., February 23, 2017. REUTERS/Jonathan Ernst

By Steve Holland and David Lawder | WASHINGTON Thu Feb 23, 2017 | 6:55pm EST

President Donald Trump declared China the “grand champions” of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing’s foreign exchange practices.

In an exclusive interview with Reuters, Trump said he has not “held back” in his assessment that China manipulates its yuan currency, despite not acting on a campaign promise to declare it a currency manipulator on his first day in office.

“Well they, I think they’re grand champions at manipulation of currency. So I haven’t held back,” Trump said. “We’ll see what happens.”

During his presidential campaign Trump frequently accused China of keeping its currency artificially low against the dollar to make Chinese exports cheaper, “stealing” American manufacturing jobs.

But Treasury Secretary Stephen Mnuchin told CNBC on Thursday he was not ready to pass judgment on China’s currency practices.

Asked if the U.S. Treasury was planning to name China a currency manipulator any time soon, Mnuchin said he would follow its normal process of analyzing the currency practices of major U.S. trading partners.

The Treasury is required to publish a report on these practices on April 15 and Oct. 15 each year.

“We have a process within Treasury where we go through and look at currency manipulation across the board. We’ll go through that process. We’ll do that as we have in the past,” Mnuchin said in his first televised interview since formally taking over the department last week. “We’re not making any judgments until we go continue that process.”

A formal declaration that China or any other country manipulates its currency requires the U.S. Treasury to seek negotiations to resolve the situation, a process that could end in punitive tariffs on the offender’s goods.

The U.S. Treasury designated Taiwan and South Korea as currency manipulators in 1988, the year that Congress enacted the currency review law. China was the last country to get the designation, in 1994.

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The current situation is complicated because China’s central bank has spent billions of dollars in foreign exchange reserves in the past year to prop up the yuan to counter capital outflows.

The International Monetary Fund said last year that the yuan’s value was broadly in line with its economic fundamentals. The U.S. Treasury also said in its last currency report in October that its view of China’s external imbalances had improved somewhat.
Trump’s pronouncements about the yuan could also complicate matters for Mnuchin as he prepares for his first meeting next month with his Group of 20 finance minister counterparts in Baden Baden, Germany.

(Reporting by David Lawder and Steve Holland, Writing by David Lawder; Editing by Paul Simao)

Source: Reuters “Exclusive: Trump calls Chinese ‘grand champions’ of currency manipulation”

Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China overtakes U.S., France as Germany’s most important trading partner


By Rene Wagner and Michael Nienaber | BERLIN Thu Feb 23, 2017 | 6:18pm EST

China for the first time became Germany’s most important trading partner in 2016, overtaking the United States, which fell back to third place behind France, data showed on Friday.

German imports from and exports to China rose to 170 billion euros ($180 billion) last year, Federal Statistics Office figures reviewed by Reuters showed.

The development is likely to be welcomed by the German government, which has made it a goal to safeguard global free trade after U.S. President Donald Trump threatened to impose tariffs on imports and his top adviser on trade accused Germany of exploiting a weak euro to boost exports.

German Vice Chancellor Sigmar Gabriel has even suggested that the European Union should refocus its economic policy toward Asia, should the Trump administration pursue protectionism.

“Given the protectionist plans of the new U.S. president one would expect that the trade ties between Germany and China will be further strengthened,” Germany’s BGA trade association said in response to the shift.

Neighboring France remained the second-most important business partner with a combined trade volume of 167 billion euros. The United States came in third with 165 billion euros.

In 2015, the United States became the top trading partner for Germany, overtaking France for the first time since 1961 thanks to an upturn in the U.S. economy and a weaker euro.

Looking at exports alone, the United States remained the biggest client for products “Made in Germany” in 2016, importing goods from Europe’s biggest economy worth some 107 billion euros.

France remained the second-most important single export destination for German goods with a sum of 101 billion euros, the data showed. Britain came in third, importing German goods worth 86 billion euros.

Britain accounted also for the biggest bi-lateral trade surplus: Exports surpassed imports from Britain by more than 50 billion euros, the figures showed.

The United States came in second with a bi-lateral trade deficit: German exports to the U.S. surpassed imports from there by 49 billion euros.

This means that Britain and the U.S. together accounted for roughly 40 percent of Germany’s record trade surplus of 252.9 billion euros in 2016.

The figures are likely to fuel the debate about Germany’s export performance, its trade surplus and global economic imbalances ahead of a meeting of G20 finance ministers and central bank governors in Baden-Baden mid-March.

(Editing by Jeremy Gaunt)

Source: Reuters “China overtakes U.S., France as Germany’s most important trading partner”

Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Trump Succeeds in Having China Pressure North Korea Harder


North Korean leader Kim Jong Un watches a performance given with splendor at the People's Theatre on Wednesday to mark the 70th anniversary of the founding of the State Merited Chorus in this photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on February 23, 2017. KCNA/via REUTERS

North Korean leader Kim Jong Un watches a performance given with splendor at the People’s Theatre on Wednesday to mark the 70th anniversary of the founding of the State Merited Chorus in this photo released by North Korea’s Korean Central News Agency (KCNA) in Pyongyang on February 23, 2017. KCNA/via REUTERS

In the above photo, Kim did not smile with a light heart perhaps due to China’s reduction of coal import from his country.

Reuters says in its report “Trump wants to make sure U.S. nuclear arsenal at ‘top of the pack’” yesterday that in an interview with Reuters, US President Donald Trump says that Beijing may rein in Pyongyang “very easily if they want to”.

I said in my post “The Conundrum of China-North Korea Relations 2” on February 21, “China does not want to punish North Korea too hard for fear of the collapse of North Korea’s Kim Jong-un regime” as it “may give rise to flood of hundreds of thousands North Korean refugees into China” or US and South Korea’s annexation of North Korea and thus depriving China of a buffer that separates the two from China.

Now by banning import of coal from North Korea, China has really pressured North Korea hard in accordance with Trump’s demand.

Judging by North Korea’s angry response, the ban really hurts. Reuters says in its another report titled “North Korea raps old ally China after China’s ban on coal” yesterday, “The North’s state-run KCNA news agency did not refer directly to China by name but in an unmistakable censure it accused a ‘neighboring country’ of going along with North Korea’s enemies to ‘bring down its social system’.

“‘This country, styling itself a big power, is dancing to the tune of the U.S. while defending its mean behavior with such excuses that it was meant not to have a negative impact on the living of the people in the DPRK but to check its nuclear program,’ KCNA said in a commentary.”

North Korea is shrewd in describing China as a big power losing face in obeying US demand, but Chinese leaders simply do not care because they are wise honest leaders. They do not mind losing face as long as their nation is much benefited in losing face.

They let the US take the lead in the dance as long as China and the US cooperate well in dancing to US tune that greatly benefit China. They know win-win cooperation with the US is too important for China’s economic prosperity and national security.

The reduction in coal import from North Korea does not hurt China as China has much excessive coal production capacity to cover the loss of import. North Korea will suffer losses less than US2 billion in lost coal export, but if China provides it with loan for paying import of food and other daily necessities from China, North Korean people will not suffer and North Korea’s political stability will not be affected. Only, Kim Jong-un will have less money for nuclear and missile development, which is good for not only the US but also China.

Comment by Chan Kai Yee on Reuters’ reports, full text of which can respectively be viewed at http://www.reuters.com/article/us-usa-trump-exclusive-idUSKBN1622IF and http://www.reuters.com/article/us-northkorea-china-idUSKBN1621G2.


China’s Homegrown Aircraft Carrier to Be Launched Soon


Airbus Defence and Space imagery dated 13 January showing China's Type 001A aircraft carrier hull nearing completion at Dalian shipyard. Prior to launch, remaining supports will be removed, as will objects within the dry dock. Source: CNES 2017, Distribution Airbus DS/2017 IHS Markit

Airbus Defence and Space imagery dated 13 January showing China’s Type 001A aircraft carrier hull nearing completion at Dalian shipyard. Prior to launch, remaining supports will be removed, as will objects within the dry dock. Source: CNES 2017, Distribution Airbus DS/2017 IHS Markit

Sean O’Connor, Indianapolis – IHS Jane’s Defence Weekly

23 February 2017

Key Points
•China’s Type 001A aircraft carrier is nearing completion, with most external structural work visibly complete.
•Following the addition of a red anti-fouling coating to the lower hull, little work remains before the 001A hull can be launched.

Airbus Defence and Space imagery captured on 13 January shows progress being made with China’s Type 001A aircraft carrier (CV) at the Dalian shipyard in northeastern China, where the carrier hull is progressing towards being launched.

Jane’s previously examined the status of the shipbuilding programmes at Dalian in August 2016. Since then the superstructure of the Type 001A CV has been installed, along with the aircraft elevators, and the remaining decking has been put in place. Minor work remains visible on deck, with a portion of decking seen temporarily removed in November 2016.

On 20 February state broadcaster China Central Television (CCTV) reported that some of the support equipment, possibly including support bracers or scaffolding around the upper surfaces, had been removed and that red paint had been applied to the hull. Red anti-fouling paint is used beneath the waterline to prevent the growth of marine organisms on the hull, which can affect performance.

The lack of major external components remaining to be installed on the Type 001A CV hull, and the presence of the red anti-fouling paint on the lower hull, indicates that it is nearing launch. The only major exterior work remaining involves surfacing and painting the flight deck. It may be possible to perform this task following launch, should the dry dock be required for another shipbuilding programme. A key indicator that the Type 001A is preparing for launch will be removal of extant support bracers currently in place within the dry dock, as well as any remaining equipment or materials residing on the dry dock floor.

Meanwhile, the 13 January satellite imagery also shows that the second Dalian-produced Type 052D guided-missile destroyer (DDG) is receiving weapons and sensors.

Source: IHS Jane’s 360 “China’s Type 001A CV makes progress at Dalian”

Note: This is IHS Jane’s 360’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Electronic Weapons: China Builds Its Way Into The Big Leagues


February 18, 2017: In January 2017 China put into service its sixth modern AGI (Auxiliary General Intelligence, or electronic reconnaissance) ship into service. This one was much different from the four earlier Type 815Gs Dongdiao class vessels and thus the latest ship is confusingly called the Type 815A. This vessel apparently displaces over 5,000 tons and has a mix of new and updated electronics.

The Type 815Gs entered service between 2009 and 2005 and obviously had new and improved electronics installed. Actually each 815G seemed to have some new gadgets, or an old ones that were modified. The first of these new AGIs entered service in 1999 as the Type 815 and it was very obviously a new kind of AGI ship for the Chinese in part because it was equipped with modern electronics similar to those found in Western (and Russian) AGIs

The Type 815Gs were 4,800 ton vessels are 119 meters (390 feet) long and with a crew of about a hundred sailors and technicians. These ships featured several domes protecting antennae and the ship is crammed with computers and signals processing gear. The Dongdiao class replaced older AGI type ships that entered service in the 1970s. Some of those these older ships have had their electronics and other information gathering gear upgraded but China felt a new design was required and that led to the development of the Type 815 in the late 1990s. China has about a dozen AGIs of varying sizes and ages. The Dongdiaos have been the largest and most modern.

AGI ships are mainly about electronic reconnaissance and collection. Just keeping track of the enemy’s electronic devices has become a major operation, especially since no one knows exactly how everyone’s electronic equipment will interact until there is a sustained period of use. Such use does not occur in peacetime, when the EW equipment is used infrequently for training and testing. All electronic equipment has a unique electronic signature. Even equipment that is not broadcasting will appear a certain way to various sensors like radar or sonar. Thus a critical peacetime function is to determine what these signatures are. For this reason navies and air forces devote a significant amount of their time tracking other nation’s capabilities.

As a counter to ESM (Electronic Support Measures), equipment is disguised where possible. Signals can be varied in some circumstances. For equipment that is detected by shape and composition, like aircraft and ships, their shape and substance can be designed to minimize detection. This is the essence of the stealth technology that the United States is applying to a number of vehicles, especially aircraft. Small ships, aircraft, helicopters and vehicles loaded with sensors do most of the collecting. Low flying satellites are useful for catching signals deep inside a nation’s territory. Drones and RPV aircraft are used also, plus robotic sensors that are left on the ground or sea bottom. Collection involves more than sensors. Recording devices, foreign language interpreters and signal processing equipment also come into play.

Computers are increasingly crucial in sifting through the ocean of data swept up. Huge libraries of signals are collected, analyzed and boiled down to manageable amounts of data friendly troops and weapons can use. ESM has been so successful that one entire class of sensors, active sensors, has become endangered. Active sensors detect things by broadcasting a signal. When this signal bounces off something, the sensor detects the bounce back and knows something is out there. This is the basis of radar, which broadcasts microwaves, and sonar, which broadcasts sound. Because of the signal being broadcast, a passive sensor can detect it.

Passive sensors just listen. Because active sensor signals must reach an object in sufficient force to bounce something back, a vehicle carrying a passive sensor will detect a vehicle carrying an active sensor first. This is what happens you use a radar detector in your car to detect police speed trap radars. You usually have time to slow down before you illegal speed is detected by the police radar. As users of these devices well know, there is constant competition to come up with better radars and countermeasures. Passive sensors are the hot item in research and development these days, and for obvious reasons. Passive sensors are nearly impossible to detect. Passive sensors can also pick a wide variety of signals. Infrared sensors can detect heat, including something as faint as body heat or the hot skin of an approaching jet aircraft.

The basic task of an AGI is to be within range, as often as possible, when “the subject” (whoever they are monitoring) “radiates” (transmits). The Chinese AGIs will also use Chinese warships as subjects. In part this is for training and in part it gives the Chinese a sense of what foreign AGIs encounter when they go after Chinese ships.
The modern Chinese AGIs have been increasingly active in the South China Sea and off the coasts of South Korea, Japan and Taiwan. For example in mid-2016 a Chinese AGI, for the first time, entered territorial waters off the Japanese Senkaku islands. The Chinese AGI was following two Indian warships that were in the area for joint training exercises with Japanese and American warships. The Chinese AGI moved away after about an hour. China says it was a legal intrusion because the spy ship was unarmed and thus not a warship. That is not how international law interprets “free passage” because anything closer than 22 kilometers to the coast is sovereign territory that requires explicit permission for foreign ships to enter. Chinese AGIs have already been spotted as far afield as Africa and South America.

Source: Strategy Page “Electronic Weapons: China Builds Its Way Into The Big Leagues”

Note: This is Strategy Page’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.


Chinese Navy to acquire new trimaran hull frigate


The trimaran vessel, as displayed by CSSC at IDEX. (Richard D Fisher Jr)

The trimaran vessel, as displayed by CSSC at IDEX. (Richard D Fisher Jr)

CSSC also displayed a model of a 700 tonne derivative of the PLAN's Type 022 catamaran FAC. (Richard D Fisher Jr)

CSSC also displayed a model of a 700 tonne derivative of the PLAN’s Type 022 catamaran FAC. (Richard D Fisher Jr)

Richard D Fisher Jr, Abu Dhabi – IHS Jane’s Defence Weekly

21 February 2017

The China Shipbuilding Trading Corporation (CSSC) has revealed a new trimaran-hulled frigate concept at the IDEX show held in Abu Dhabi, telling Jane’s that a version was being built for China’s People’s Liberation Army Navy (PLAN).

The specifications provided by CSSC for the trimaran vessel state that it displaces 2,450 tonnes, has a length of 142 m, a width of 32.6 m, a cruising speed of 25 kt, and an endurance of 30 days. A CSSC official added that its top speed is between 30-35 kt and that it has a crew of more than 100.

CSSC officials said the vessel uses diesel engines that power a “marine electric propulsion system” that in turn drive three pump jets. It does not have a secondary propeller propulsion system.

Although lighter than China’s Type 054A frigate, the trimaran carries a similar armament of one 76 mm main gun, vertical launch tubes for 16 or 32 missiles, eight anti-ship missile launchers, two close-in weapon systems, and hangar space for two helicopters.

CSSC also revealed a concept for a 700 tonne derivative of the PLAN’s Type 022 catamaran fast attack craft (FAC). It is armed with a 76 mm gun and four anti-ship missile launchers. CSSC officials said the PLAN has so far shown no interest in this version and there are no plans to build it.

Source: IHS Jane’s 360 “Chinese Navy to acquire new trimaran hull frigate”

Note: This is IHS Jane’s 360’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

This blogger’s comment: The frigate is similar to US littoral combat ship but with greater fire power.


ASEAN Worried by Latent South China Sea China-US Confrontation


Association of South East Asian Nations (ASEAN) Foreign Ministers link arms during the ASEAN Foreign Ministers' Retreat in Boracay, central Philippines February 21, 2017. L-R: Saleumxay Kommasith, Minister of Foreign Affairs of Laos; Anifah Aman, Minister of Foreign Affairs of Malaysia; U Kyaw Tin, Minister of State for Foreign Affairs of Myanmar; Don Pramudwinai, Minister of Foreign Affairs of Thailand; Pham Binh Minh, Deputy Prime Minister and Minister of Foreign Affairs of Vietnam; Philippine Foreign Secretary and AMM Retreat Chair Perfecto Yasay; Dr. Vivian Balakrishnan, Minister of Foreign Affairs of Singapore; Lim Jock Seng, Second Minister of Foreign Affairs and Trade of Brunei; Prak Sokhonn, Minister of Foreign Affairs and International Cooperation of Cambodia; Retno L.P. Marsudi, Minister of Foreign Affairs of Indonesia; Le Luong Minh, Secretary-General of ASEAN. Malacanang Photo/Handout via Reuters

Association of South East Asian Nations (ASEAN) Foreign Ministers link arms during the ASEAN Foreign Ministers’ Retreat in Boracay, central Philippines February 21, 2017. L-R: Saleumxay Kommasith, Minister of Foreign Affairs of Laos; Anifah Aman, Minister of Foreign Affairs of Malaysia; U Kyaw Tin, Minister of State for Foreign Affairs of Myanmar; Don Pramudwinai, Minister of Foreign Affairs of Thailand; Pham Binh Minh, Deputy Prime Minister and Minister of Foreign Affairs of Vietnam; Philippine Foreign Secretary and AMM Retreat Chair Perfecto Yasay; Dr. Vivian Balakrishnan, Minister of Foreign Affairs of Singapore; Lim Jock Seng, Second Minister of Foreign Affairs and Trade of Brunei; Prak Sokhonn, Minister of Foreign Affairs and International Cooperation of Cambodia; Retno L.P. Marsudi, Minister of Foreign Affairs of Indonesia; Le Luong Minh, Secretary-General of ASEAN. Malacanang Photo/Handout via Reuters

Reuters says in its report “Exclusive: China finishing South China Sea buildings that could house missiles – U.S. officials” yesterday that two US officials told it that China is nearly finished building quite a few structures for housing long-range surface-to-air missiles. on its artificial islands in the South China Sea.

US Secretary of State Rex Tillerson said something harsh about China’s island building in the South China Sea before his formal appointment, but according to Reuters’ report “Tillerson affirms importance of constructive U.S.-China ties” I have reblogged today, he now wants constructive ties with China and the statement of his department on his telephone conversation with China’s top diplomat Yang Jiechi simply does not mention the South China Sea.

Trump and Tillerson’s silence on China’s deployment of missiles and US navy’s patrol in the South China Sea make people guess what Trump’s real China policies are.

As a result, Reuters says in its another report “ASEAN unsettled by China weapon systems, tension in South China Sea” yesterday, Philippine Foreign Secretary Perfecto Yasay said after ASEAN foreign ministers’ meeting in the Philippines yesterday that Asian countries saw China’s installation of weapons in the South China Sea as “very unsettling” and have urged dialogue to stop an escalation of “recent developments.”

Obviously, ASEAN believes China’s deployment of missiles on those islands is to deal with US aircraft carriers battle group that has announced it will conduct freedom of navigation operations near the islands. In its report, Reuters quotes Yasay as saying that the 10-member Association of South East Asian Nations (ASEAN) hoped China and the United States would ensure peace and stability.

According to Yasay, ASEAN were confident a framework for a code of maritime conduct could be agreed with Beijing by June. As a result, tension among various South China Sea claimants will be eased. However, tension will remain between China and the US there. That is why ASEAN hoped that China and the US would ease tension between them to ensure peace and stability.

Comment by Chan Kai Yee on Reuters’ reports, full text of which can respectively be viewed at http://www.reuters.com/article/us-china-usa-southchinasea-exclusive-idUSKBN161029 and http://www.reuters.com/article/us-asean-philippines-idUSKBN1600I3.