China to cut import tariffs on wide range of products


September 30, 2018

BEIJING (Reuters) – China will cut import tariffs on textile products and metals, including steel products, to 8.4 percent from 11.5 percent, effective Nov. 1, the finance ministry said on Sunday.

Beijing has pledged to take steps to increase imports this year amid rising tension with some of its biggest trade partners, such as the United States.

Earlier in July, China reduced import tariffs on a range of consumer items including apparel, cosmetics, home appliances, and fitness products to fulfil pledges to further open China’s consumer market.

Import tariffs on wood and paper products, minerals and gemstones will be cut to 5.4 percent from 6.6 percent, the ministry also said in its statement.

Average import tariffs on over fifteen hundred products will be lowered to 7.8 percent from 10.5 percent, the ministry said.

“Reducing tariffs is conducive to promoting the balanced development of foreign trade and promoting a higher level of opening up to the outside world,” the ministry said .

China’s cabinet has announced plans to cut tariffs on machinery, electrical equipment and textile products beginning on Nov. 1, as the country braces for an escalating trade war with the United States.

The overall tariff level will be reduced to 7.5 percent in 2018 from 9.8 percent in 2017 as a result, the cabinet has said.

Reporting by Kevin Yao; Editing by David Goodman and Jane Merriman

Source: Reuters “China to cut import tariffs on wide range of products”

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

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China Tests Wide-Speed-Range Hypersonic Space Plane, Nuclear Missile


Researchers tested three different design shapes and monitored the performance of each, CCTV reported. Photo: Sina.com.cn

SCMP says in its report “China takes step towards precision warheads for unstoppable nuclear weapon, state media says” yesterday that according to China’s state TV media CCTV on September 21 China tested three scalled-down models of “wide-speed-range vehicles that can fly from hypersonic to lower than sound velocity.

The three models are China’s differently shaped designs that China tests for its hypersonic plane and unstoppable nuclear-capable precision weapons.

Hypersonic speed ensures that the hypersonic missile is unstoppable but such high speed allows affects the precision in hitting the target. The variable range of speed enable the missile to reduce its speed for adjusting its trajectory and position to ensure precision hit.

Two of the three models are shaped similar to the waverider Starry Sky 2 China tested last month but the third one is different in shape.

The third one’s shape is called “I” shape, which the Institute of Mechanics of Chinese Academy of Sciences claimed in a paper published in February could produce 60 per cent higher lift coefficient than the waverider.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be viewed at https://www.scmp.com/news/china/military/article/2166298/china-takes-step-towards-precision-warheads-unstoppable-nuclear.


‘Turbulence’ in ties threatens U.S.-China security meeting


Ben Blanchard, Michael Martina September 29, 2018

BEIJING (Reuters) – A key diplomatic and security meeting between China and the United States next month may not take place due to tensions in relations, sources briefed on the matter said, potentially the latest casualty of worsening ties.

Beijing and Washington are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other’s imports.

Friction between the world’s top two economies is now moving beyond trade, with U.S. President Donald Trump accusing Beijing this week of seeking to interfere in congressional elections, marking what U.S. officials told Reuters was a new phase in an escalating campaign by Washington to put pressure on China.

On the military front, China has been infuriated by the United States putting sanctions on the People’s Liberation Army (PLA) for buying weapons from Russia, and by what Beijing sees as stepped up U.S. support for self-ruled Taiwan, claimed by China as its sacred territory.

Two Beijing-based diplomatic sources familiar with the plans said U.S. Secretary of State Mike Pompeo and U.S. Defense Secretary Jim Mattis were both due in Beijing next month for the U.S.-China Diplomatic and Security Dialogue, which first took place last year in Washington, a reboot of earlier high-level talks under previous administrations.

However, both sources said that this meeting was now in doubt.

“There is a lot of uncertainty because of the turbulence in the relationship,” said one the sources.

The second source said that the People’s Liberation Army was especially unhappy with the United States at the moment because of the U.S. sanctions on the Chinese military and U.S. support for Taiwan, including approving a new round of arms sales this week.

“The PLA is fed up over the Taiwan issue. They’re increasingly hardline on this,” the source said.

Both sources spoke on condition of anonymity as the trips have not been made public. They also cautioned the meetings may still take place as planned, and that no final decisions have been reached.

China’s Defence Ministry said it was talking to the United States about the dialogue.

“China and the United States have all along maintained communication about the diplomatic and security dialogue,” it said in a statement to Reuters, without elaborating.

China’s Foreign Ministry said in a short statement sent to Reuters that the two countries were in “close contact” about the dialogue, and that if it had any other information it would release it in a timely manner.

The U.S. Embassy in Beijing declined to comment, as did the U.S. State Department. The Pentagon said it does not discuss future travel plans.

DECOUPLING?

In his latest broadside on Wednesday, Trump accused China of seeking to interfere in the Nov. 6 U.S. congressional elections, saying that Beijing did not want him or his Republican Party to do well because of his pugnacious stance on trade.

While China has denounced what it called his “slander”, it has so far held off taking any direct steps to retaliate.

However, prior to Trump’s remarks Beijing canceled a previously set round of military talks with Washington over the sanctions on China’s military, and has denied a U.S. warship permission to visit Hong Kong in October.

The Chinese government’s top diplomat, State Councillor Wang Yi, said on Friday there was “no cause for panic” over friction between Beijing and Washington, but warned that China would not be blackmailed or yield to pressure over trade.

President Xi Jinping said this week that, with the rise of unilateralism and trade protectionism, China should embark on a path of self-reliance, a startling aim for a country that has sought to project itself on the world stage and touts the benefits of global free trade.

China had already been trying to reduce its reliance on foreign technology through its Made in China 2025 initiative, though it stopped openly touting the plan earlier this year in the face of blowback from the United States.

“Divorce is the word I use,” Tu Xinquan, a trade expert at Beijing’s University of International Business and Economics who has advised the Chinese government, told Reuters recently.

“Now, most people believe Trump is trying to contain China. Many government officials think this way.”

Last week, Jack Ma, chairman of Chinese e-commerce giant Alibaba, said bilateral trade frictions could last two decades, and that the firm could no longer meet its promise to create 1 million American jobs.

“I think there are leaders in the U.S. government who believe that so long as the Chinese system is not willing to change, then the next best scenario for the United States is a gradual decoupling of the economies,” Tim Stratford, managing partner of law firm Covington & Burling’s Beijing office and a former senior U.S. trade diplomat, said in a recent podcast.

China has insisted it wants to resolve all its disputes with the United States.

Ruan Zongze, a former Chinese diplomat now with the China Institute of International Studies, a think-tank affiliated with the Foreign Ministry, called it unrealistic to think the two countries could “decouple” considering how inter-connected they were.

“It’s like two people having an argument,” said Ruan. “Can you really resolve it if you stop speaking to each other?”

Editing by Tony Munroe and Alex Richardson

Source: Reuters “’Turbulence’ in ties threatens U.S.-China security meeting”

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 says ‘no cause for panic’ over U.S. ties, but won’t be blackmailed


David Brunnstrom, Rodrigo Campos

September 29, 2018

UNITED NATIONS/NEW YORK (Reuters) – The Chinese government’s top diplomat, Wang Yi, said on Friday there was “no cause for panic” over friction between Beijing and Washington, but warned that China would not be blackmailed or yield to pressure over trade.

At a U.N. Security Council meeting on Wednesday, U.S. President Donald Trump escalated tensions with Beijing by accusing it of seeking to meddle in the Nov. 6 U.S. congressional elections to stop him and his Republican Party from doing well because of his China trade policies. At the same meeting, Wang rejected the charge.

“Protectionism will only hurt oneself, and unilateral moves will bring damage to all,” Wang said in a speech at the United Nations General Assembly on Friday.

“Regarding trade frictions, China stands for a proper settlement based on rules and consensus through dialogue and consultation on an equal footing. China will not be blackmailed or yield to pressure.”

Trump, who accuses China of stealing U.S. intellectual property, limiting access to its own market and unfairly subsidizing state-owned industries, has escalated his trade war with China and U.S. tariffs on $200 billion worth of Chinese goods kicked in on Monday, prompting Beijing to retaliate with additional tariffs on $60 billion of U.S. products.

Wang earlier told the Council on Foreign Relations in New York that concrete actions had to be taken to maintain relations between the United States and China.

“The closer our engagement, the more closely entwined our interests, maybe various suspicions and even frictions may ensue,” Wang said.

“This is not surprising and it is also no cause for panic. What is important is how these differences should be viewed, evaluated and handled.”

Wang, who holds the twin titles of foreign minister and state councilor, dismissed any suggestion there was forced technology transfer from foreign firms in China and played down complaints by some U.S. firms about market conditions in China.

“A small number of companies that are not so satisfied may speak up louder, but I don’t think they represent the majority of the companies in the Chinese market,” he said.

Further cooperation between the United States and China was key in pursuing denuclearization of its ally North Korea, Wang said, while urging the creation of a peace mechanism and for the United States to give North Korea more incentives.

“We believe it is … right for the U.S. to make timely and positive responses so as to truly meet North Korea halfway,” Wang said in his U.N. speech.

U.S. Secretary of State Mike Pompeo warned members of the United Nations Security Council on Thursday that they must “set the example” by enforcing sanctions on North Korea as China and Russia suggested the council consider easing the tough measures because progress had been made.

Wang warned that scrapping the 2015 Iran nuclear deal, which China and other powers are fighting to save after Trump pulled out of it in May, could lead to a regional arms race.

He said China was fostering closer economic ties with Russia as the two economies were complimentary and Moscow and Beijing were also on the same page on international issues.

“We want to build a new kind of relationship featuring non-confrontation, non-conflict and no targeting any third country,” he said. “Russia is our largest neighbor, and there’s need for normal and friendly ties between neighbors.

“Certainly, the two economies are highly complementary. We need the Russian energy like oil and natural gas and they need Chinese processed goods … and inexpensive Chinese goods.”

Wang said China had exercised “utmost restraint” in the South China Sea and seeks peaceful solutions to disputes there. He said Beijing’s sovereignty over the South China Sea islands was “very clear” and that people there felt the need for enhanced defenses given “heavy” U.S. military patrols, Wang said.

China claims most of the South China Sea, through which about $3 trillion worth of trade passes every year. Malaysia, Vietnam, the Philippines and Brunei also claim parts of the sea, which has oil and gas deposits and rich fishing grounds.

Wang said that while Asia belonged to the people of Asia, China did not seek a closed continent or to create “a new order” or hegemony.

China’s Foreign Minister Wang Yi addresses the United Nations General Assembly at U.N. headquarters in New York, U.S., September 28, 2018. REUTERS/Carlo Allegri
“China will not, repeat, not repeat the old practice of a strong country seeking hegemony,” Wang said. “I don’t think China will become the United States and China will not challenge the United States, still less will China take the place of the United States.”

Reporting by David Brunnstrom and Rodrigo Campos; writing by John Irish and Michelle Nichols; editing by Grant McCool and Jonathan Oatis

Source: Reuters “China says ‘no cause for panic’ over U.S. ties, but won’t be blackmailed”

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 tells U.N. it will not be ‘blackmailed’ or yield to trade pressure


September 28, 2018

UNITED NATIONS (Reuters) – The Chinese government’s top diplomat Wang Yi said on Friday Beijing would not be blackmailed or yield to pressure over trade and criticized unilateral moves by some states that China believes would bring harm to all.

China’s Foreign Minister Wang Yi addresses the United Nations General Assembly at U.N. headquarters in New York, U.S., September 28, 2018. REUTERS/Carlo Allegri

“Protectionism will only hurt oneself, and unilateral moves will bring damage to all,” Wang said in a speech at the United nations General Assembly. “Regarding trade frictions, China stands for a proper settlement based on rules and consensus through dialogue and consultation on an equal footing. China will not be blackmailed or yield to pressure.”

Reporting by John Irish; editing by Grant McCool

Source: Reuters “China tells U.N. it will not be ‘blackmailed’ or yield to trade pressure”

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


Xi Happy at Tariff Hikes, Trump Furious to Place All-round Pressure


We have two very interesting reports on US-China trade war. The first is SCMP’s report titled “Xi Jinping says trade war pushes China to rely on itself and ‘that’s not a bad thing’” on September 26.

The report quotes Xi as saying, “Internationally, it’s becoming more and more difficult [for China] to obtain advanced technologies and key know-how. Unilateralism and trade protectionism are rising, forcing us to adopt a self-reliant approach. This is not a bad thing.”

By trade protectionism, Xi obviously refers to Trump’s trade war attacks at China.

However, Xi did not stop at technology self-reliance. The report quotes him as saying that China was a big country which must “depend on itself for food supply, depend on itself for economic development, and depend on itself for manufacturing”.

Now food ranks first in Xi’s self-reliance. It means Xi is determined to free China from its dependence on US exports of agricultural products. Sorry, US farmers.

Trump thought he would have brought China down to its knees by his high pressure of tariff hikes. Xi’s firm response, the first ever of Xi’s response to Trump’s trade war, makes Trump furious. Trump sees that he has limited ammunition in tariff hikes. What if he has imposed tariff hikes on all Chinese goods but still fail to subdue China?

He has to find other means. That is reflected in Reuters’ report today titled “Trump’s election meddling charge against China marks U.S. pressure campaign”. It says that according to senior US officials, Trump’s “accusation of Chinese meddling in upcoming U.S. elections marks a new phase in an escalating pressure campaign against Beijing that Washington is pursuing on multiple fronts”

The accusation is not supported by any evidence. Reuters says, “The only specific action by China that Trump cited was that it was ‘placing propaganda ads’ in U.S. newspapers, referring to a Chinese government-run media company’s four-page supplement in the Sunday Des Moines Register promoting the mutual benefits of U.S.-China trade.

The ad may has some influence on Iowa farmers but Reuters says, “However, the practice of foreign governments buying space in U.S. newspapers to promote trade is common and differs from a clandestine operation run by a national intelligence agency.”

Trump’s accusation proves what US senior officials said about Trump, being furious, resorting to all-round pressure on China to force it to surrender.

It is also proved by recent flights of US B-52 bombers in East and South China Seas, US planned sale of weapons to Taiwan, etc.

In my previous posts I said that a soldier may fight with emotion but a commander must fight with wisdom. It seems that Trump is now fighting with emotion while Xi, with wisdom. Trump’s accusation, B-52 flights and weapons sales to Taiwan cannot hurt China but Xi’s self-reliance may hit the US hard.

Tariff hikes are but frontal confrontation, according to Sun Tzu’s teaching, to win the war China shall have ingenious surprise move. Now, self-reliance is Xi’s ingenious surprise move.

Xi wants China to rely on itself in food, manufacture and technology. If so China will not import food, airliners, electronics, chips, etc. from the US. With self-reliance on China’s huge market, China will no longer rely on its exports to the US. Then what will be the use of tariff hikes?

Xi’s self-reliance will ensure Trump’s failure in trade war.

Comment by Chan Kai Yee on SCMP and Reuters’ reports, full text of which can respectively be viewed at https://www.scmp.com/economy/china-economy/article/2165860/xi-jinping-says-trade-war-pushes-china-rely-itself-and-thats and https://www.reuters.com/article/us-usa-china/trumps-election-meddling-charge-against-china-marks-u-s-pressure-campaign-idUSKCN1M72VQ.


Breakingviews – Trump lands too late to spoil China’s Africa party


Ed Cropley September 26, 2018

LONDON (Reuters Breakingviews) – Donald Trump has discovered Africa. After years of paying scant attention to the continent’s economic development, Washington is trying to counter China’s pervasive influence. Yet doubling financing to poor countries to $60 billion – the same amount Beijing pledged to Africa this month – sounds worryingly Cold War. If a desire to trump his Chinese counterpart, rather than solid financials, is the U.S. president’s main objective, American taxpayers will pay the price.

Western governments have grown increasingly worried about so-called Chinese ‘debt diplomacy’ – offering African and other poor-country governments cheap loans for things they might not need or be able to afford, like shiny new railroads. Some of the loans, whose terms are often closely guarded secrets, are secured against minerals such as cobalt or iron ore.

Beijing denies ill-intent, saying it is simply helping Africa develop and filling a gap in the sovereign lending market. Borrowers say Chinese loans come with better terms than, say, those offered by the World Bank or commercial lenders. Washington’s misgivings are now shifting to action. A bill wending its way through Congress would double the firepower of the Overseas Private Investment Corporation (OPIC), and allow it to buy shares in projects, rather than just lend them money.

The agency run by Ray Washburne – a Trump backer who founded a restaurant group including the Mi Cocina and Taco Diner outlets – prides itself on turning a profit. In the last decade OPIC has paid back $3.7 billion to government coffers. This suggests its terms may be less generous than the concessionary rates granted by Beijing. Forgive African governments for not rushing to sign up.

Offering more favourable terms on its loans will elicit cries of hypocrisy: that Washington risks adding to the burdens of a continent already drowning in debt from poorly conceived initiatives dreamt up by equally poor leaders. Yet by taking stakes, OPIC assumes more risk. Equity ranks below debt in the capital structure. If a project goes belly-up – not unthinkable given the many African governments now trying to reschedule Chinese loans – shareholders may be wiped out.

In the end, then, OPIC’s change of tack could end in handouts, rather than development. That’s just the sort of critique an America First political candidate might make of Trump’s new Africa deal.

Source: Reuters “Breakingviews – Trump lands too late to spoil China’s Africa party”

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