From Harmony to Struggle, China’s Fight against Encirclement


Xi pursues harmony as that is China’s traditional way. That is why he seeks win-win cooperation in his Belt and Road initiative. However, he did not expect that his efforts for win-win cooperation with the US has entirely failed.

At first, Trump also wanted win-win cooperation with China to facilitate US eocnomic development. His daughter diplomacy and efforts to establish personal friendship with Chinese President Xi Jinping prove that. However, when most Americans have fallen into Thucydides trap, Trump will become very unpopular and not be able to be reelected if he fails to follow the popular trend of hostility towards China.

Other Western developed countries are also afraid of China’s rise as they are uncertain what China may do when it has become a superpower stronger than the US. Therefore, they believe that it is safer to follow the US in encircling China.

Though they do not join US in its trade and tech wars against China in order to be free from the harm to their own economies, they have joined the US in attacking China’s Belt and Road initiative and anti-terrorist and anti-extremist policies in Xinjiang and provoking China in the South China Sea.

To counter such attacks, China hs no choice but to fight back as it would not surrender. It wouldnot surrender even when it was very poor and backward when it was invaded by Japan in 1930s and 1940s. How can it surrender now when it is much stronger. China has set the great goal of national rejuvenation and Xi will make every effort to realize that China Dream.

SCMP’s article “Forget Lam’s extradition U-turn, Xi’s channelling of Mao shows he’s about to get tough on Hong Kong” mentions Xi’s speech to a group of young and middle-aged senior officials enrolled in a training course at the central party school. The article says “In the nine-minute speech, Xi used the word ‘struggle’ nearly 60 times”. It reminds the writer of the article of Mao’s famous and often quoted saying: “I feel boundless joy in struggling with heaven, earth and people”.

I have read of the Chinese original of Xi’s speech and has not found Xi’s fondness of struggling like Mao. Xi stresses struggle in the speech as he is realistic that in order to realize China Dream, Chinese people have to conduct constant struggles against myriad challenges and risks in the areas of economics, politics, culture, society, ecology, national defence and the armed forces, diplomacy, party building and Hong Kong, Macau and Taiwan.

That is especially true now when China is under US trade and tech war attacks.

Hong Kong is mentioned in Xi’s speech on the needs for struggle but the challenges and risks from Hong Kong, Macao and Taiwan rank last; therefore, I believe SCMP’s article concludes with the exaggeration: “If nothing else, Xi’s speech signals a toughening stance towards Hong Kong despite the decision to withdraw the extradition bill.”

Hong Kong is no longer a goose that lays gold eggs as it did when Deng Xiaoping invented the “one country, two systems” for solution of Hong Kong issue, but Hong Kong is used to exaggerate its role in China’s economy. The political instability and economic downturn caused by the anti-extradition riots in Hong Kong now will not cause any substantial harm to China so that it is not a big issue for Xi to mention the needs for struggle in his speech specifically for Hong Kong.

No mainland media reports, articles and editorials and official speeches have talked about the harm to China caused by Hong Kong except the harm to China’s dignity. It means that China will only lose face if the riots in Hong Kong remain for a decade.

Trump’s adviser Larry Kudrow says US-China trade war will last a decade like the Cold War between the US and the Soviet Union, but that will not be true as in the decade Chine will complete its reform to switch from export-geared to innovation-, creation- and consumption-led economic growth. By that time tariff hikes will not work.

The riots may last indefinitely if Hong Kong People support it in spite of the damage done to Hong Kong economy. In fact, Chinese media and officials only warn Hong Kong people that it will be Hong Kong who will suffer seriously but if Hong Kong people are willing to suffer, the situation will last and China is immune from that. Instead, China will keep on speeding up its economic growth after the switch.

Comment by Chan Kai Yee on SCMP’s article, full text of which can be viewed at https://www.scmp.com/week-asia/opinion/article/3026088/forget-lams-extradition-u-turn-xis-channelling-mao-shows-hes.

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Explainer: U.S., China more divided than ever as new trade talks loom


Andrea Shalal

September 6, 2019 / 6:57 AM / Updated an hour ago

(Reuters) – Senior U.S. and Chinese officials have pledged to meet in October to settle their ongoing trade war but a lasting peace seems more elusive than ever.

Since trade negotiations between the world’s largest economies broke down in May, both countries have added tariffs on billions of dollars of the others’ goods, broken good faith promises and traded public insults.

Washington accused Beijing of reneging on commitments to change its laws to enact economic reforms, while Beijing called U.S. President Donald Trump’s tariff’s “barbaric.” Leaders from both countries are now vowing a long fight, despite slowing domestic economies.

Here is the state of play:

MEETING AMID BROKEN PROMISES

Deputies from the U.S. and China trade teams will talk in mid-September to prepare for negotiations between U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, and China’s Vice Premier Liu He in early October. Both sides agreed to take actions to create favorable conditions, but gave no details.

Neither side has signaled it would shift from positions that led to the impasse in May, when Beijing revised a draft of the trade deal, removing references to changes in Chinese law.

U.S. officials have previously said that the resumption of talks would depend on China returning to the original May deal text, but there has been no sign that China has agreed to take that step.

Beijing has cited three main sticking points in the trade negotiations. They are the removal of tariffs imposed in the trade war, reduction of the scale of U.S. goods purchases that China will make to help reduce the trade imbalance between the two, and the need for a “balanced” text for any trade deal.

When Chinese President Xi Jinping and Trump met in Osaka, Japan in June, Beijing committed to buying 20 million tonnes of U.S. soybeans, but has only purchased half that amount since. Washington pledged to ease restrictions on blacklisted Huawei Technologies Co Ltd [HWT.UL], but has not issued waivers.

HUAWEI AND HONG KONG

Beijing is smarting from Trump’s decision to blacklist Huawei, the world’s largest telecommunications equipment maker, which effectively banned U.S. firms from doing business with the company. It has prompted many non U.S.-based companies to cut their own ties to the firm.

China wants the United States to lift those restrictions, trade deal or no, but Washington is lobbying other countries to reduce dealings with Huawei, and has threatened to blacklist other Chinese firms.

Trump’s comments Aug. 14 linking successful trade talks with Beijing’s “humane” handling of protests in Hong Kong could also fuel tensions between the two sides, particularly if the demonstrations heat up further.

INTELLECTUAL PROPERTY, TECHNOLOGY TRANSFER

Before the talks broke down in May, U.S. officials had said the two side made progress on intellectual property protection and that China made proposals on a range of issues that went further than Beijing had gone before.

China for the first time discussed forced technology transfer as a widespread problem, U.S. officials said then. U.S. companies complain they are pressured to hand over their competitive secrets as a condition for doing business in China.

U.S. officials cited progress on cyber theft, services, currency, agriculture and non-tariff barriers to trade.

China, they said, offered to bring subsidies in line with World Trade Organization guidelines but had not detailed how it would do that.

For its part, the United States weakened demands China end industrial subsidies, which would require a change in China’s state-driven economic model.

But after the deal fell apart, Lighthizer told a congressional hearing that China had also backtracked on commitments on digital trade issues, including U.S. access to cloud computing services in China.

U.S. officials said China offered to make purchases of over $1 trillion worth of goods over the next six years, including agricultural and energy products as well as industrial goods. China has said, however, that there is still disagreement between the two sides on the actual purchases.

TARIFFS AS A NEGOTIATING TOOL

One of the key sticking points before talks broke down in May was whether the Trump administration would remove 25% tariffs it had imposed on $250 billion worth of imported goods from China. The United States wanted to keep some tariffs in place to ensure that China met the terms of the deal, but China demanded all tariffs be lifted immediately.

Things have escalated since. Those U.S. tariffs are now due to rise to 30% from Oct. 1, the 70th anniversary of the current Chinese state. Another $300 billion of Chinese imports face 15% U.S. tariffs, some of which began Sept. 1, with the rest to start Dec. 15.

Washington could agree, as a sign of goodwill toward Beijing, to delay the 5% tariff increase, and possibly the 15% tariffs due to begin in December, analysts say.

China, which slapped 5% tariffs on U.S. crude oil Sept. 1, could postpone additional tariffs due Dec. 15. Those include a 25% tariff on U.S.-made vehicles and a 5% tariff on auto parts that it had suspended last December.

STOKING TRADE WAR FIRES AT HOME

Trump has repeatedly insisted that China is paying the cost of U.S. tariffs, a claim rejected by U.S. retailers and manufacturers, although he has recently begun to concede that the trade war could also harm the U.S. economy in the short-term.

China has been ripping this country off for 25 years, for longer than that and it’s about time whether it’s good for our country or bad for our country short term. Long term it’s imperative that somebody does this,” he said in August.

China’s Liu, also the chief trade negotiator, on Thursday also spoke about downward pressure on the Chinese economy, but said Beijing had sufficient policy tools to deal with any difficulties.

Many of China’s analysts believe Beijing will roll out more measures to boost the economy, minimizing the impact of the trade war.

UNUSED WEAPONS

China has said it would draft its own list of foreign companies that it deems had harmed Chinese companies. That could serve as the basis for retaliation against U.S. companies for action against Huawei.

China has also indicated it may strike back through limiting rare earth supplies to the United States. Rare earth are minerals important to manufacturers of high-tech consumer goods and China is the dominant supplier.

It could also revoke orders for airplanes built by Boeing Co (BA.N), the No. 1 U.S. exporter.

Trump is calling for U.S. companies like General Motors Co (GM.N) to pull manufacturing facilities out of China.

THE BACKDROP

China is determined to upgrade its industrial base in 10 strategic sectors by 2025, including aerospace, robotics, semiconductors, artificial intelligence and new-energy vehicles.

One of the biggest U.S. complaints is that China has used coercion and outright theft to systematically obtain American intellectual property and trade secrets and advance its standing in many high-technology industries. China’s subsidies to state enterprises, including at the provincial and local government levels, have led to a build up in Chinese industries like steel that has depressed global prices and hurt producers in the United States and elsewhere.

U.S. officials argue that makes it hard for U.S. companies to compete on a market-driven basis.

They say they do not have a problem with China moving up the technology ladder, but they do not want it to happen with stolen or unfairly obtained American know-how or in a market in which Chinese firms have an unfair advantage.

Chinese officials generally view the U.S. actions as a broad effort to thwart the Asian country’s rise in the global economy. They previously denied China required or coerced technology transfers, saying that any such actions are commercial transactions between American and Chinese firms.

The Trump administration has aggressively stepped up prosecutions of intellectual property cases, and scaled back visas for Chinese students and researchers. U.S. lawmakers are writing bills that further limit visas, banning students with ties to the Chinese military.

Chinese authorities reject such accusations. In June Beijing warned students and academics about risks in the United States, pointing to limits on the duration of visas and visa refusals. It also warned companies operating in the United States they could face harassment from U.S. law enforcement, gun violence, robberies, and thefts.

Writing by Andrea Shalal, Simon Webb, and Chris Prentice; Editing by Heather Timmons and Lisa Shumaker

Source: Reuters “Explainer: U.S., China more divided than ever as new trade talks loom”

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


Trade War Cannot Reduce US Trade Deficit but Helps China Grow Stronger


An article on The Hill yesterday titled “Trump already has won the trade war with China” says Trump has already been able to get 90% of what he wants in his trade war with China. However, he would not stop and keeps on tariff rises to hurt US and world economy.

The article lists what trump has or would have got from China if he simply accepted Chinese commitments in the trade negotiations, such as reduction of US trade deficit by Chinese purchase of lots of US energy and agricultural products, protection of intellectual property, prevention of forced transfer of technology, end of government subsidies to industries, ensure of fair treatment for US entities, etc.

What is Trump’s strategic goal?

The article says, “In the U.S., President Trump appears to be holding out for a starkly decisive outcome — equivalent to China’s unconditional surrender — to maximize his political standing for winning re-election in 2020.”

Trump’s problem is his failure to see China’s strategic goal. China would not surrender as it wants Trump to keep on US pressure to facilitate China’s further reform and opening up for transformation from export- and investment-geared growth to innovation-, creation- and consumption-led growth.

Such transformation certainly will slow down China’s economy. US trade war only quickens the transformation while worsen the slowdown. However, such slowdown is but short-term. In the long run the transformation will enable China to achieve better growth later.

To keep exports to the US, China has to move its labor intensive export-oriented enterprises to its neighbors where labor costs are lower.

China has been helping Sri Lanka train workers for employment in Sri Lanka’s vast special economic zone near Hambantota to enable China to move such enterprises to the zone. The port China is building there will facilitate the exports.

Similar zones are being established in Bangladesh and Myanmar since China signed memorandums of understanding with them on the establishment of China-Bangladesh Economic Corridor and China-Myanmar Economic Corridor last year.

China-Pakistan Economic Corridor is being built and there are also such zones for China to move such enterprises there.

The construction of infrastructures of power stations, roads, railways and ports in those countries under China’s Belt and Road initiative will facilitate such movements.

US tariff hikes will only quicken such movements to avoid the hikes. China will only have the problem of substantial unemployment due to the movements, but the unemployed will blame US tariff hikes instead Xi Jinping’s economic transformation.

On the other hand, Chinese enterprises in those countries will make greater profits due to reduction of labor costs and have greater competitive edge in US market in exporting their products to the United States. As US enterprises cannot compete with them due to much higher labor costs, the US has to keep on importing the products. Its trade deficit will increase instead of decrease. However, China is not to blame as the deficit of trade with China has been switched to that of trade with China’s neighbors.

Comment by Chan Kai Yee on The Hill’s article, full text of which can be viewed at https://thehill.com/opinion/finance/458846-trump-already-has-won-the-trade-war-with-china


Huawei Threatens to break Google’s Monopoly of Mapping Survice


Forbes says in its report “Huawei’s New Google Maps Rival ‘Launches In October’ As Battle Commences” on August 17, “According to Chinese media, Huawei is stepping up its rivalry with Google with plans to launch its own mapping service as soon as October.”

Huawei CEO Ren Zhengfei warned the U.S. this week, that if its hand is forced by a U.S. blacklist which denies access to Google’s full-fat Android operating system, then it will set out to break Google and Apple’s global dominance of the smartphone ecosystem. This would be a clear part of that strategy. “

I said in my previous posts that Chinese engineers and technicians will strike back hard if insulted and cited as an example of China’s development of AEW&C airplanes as advanced as American ones when the US forced Israel to cancel its sell of AEW&C airplanes to China.

Comment by Chan Kai Yee on Forbes’ article, full text of which can be viewed at https://www.forbes.com/sites/zakdoffman/2019/08/17/watch-out-google-huawei-maps-could-launch-as-soon-as-october/#5dbd2dbb633f


China prepares its ‘nuclear option’ in trade war


Published time: 17 Aug, 2019 10:26

As the trade war continues to escalate, China is becoming increasingly active in Iran and is considering retaliating with what has long been described as the country’s ‘nuclear option’.

For the first of these projects – Phase 11 of the supergiant South Pars non-associated gas field (SP11) – last week saw a statement from the chief executive officer of the Pars Oil and Gas Company (POGC) that talks had resumed with Chinese developers to advance the project. Originally the subject of an extensive contract signed by France’s Total before it pulled out due to re-imposed US sanctions on Iran, talks had been well-advanced with the China National Petroleum Corporation (CNPC) to take up the slack on development. As per the original contract, CNPC had been assigned Total’s 50.1 percent stake in the field when the French firm withdrew, giving it a total of 80.1 percent in the site, with Iran’s own Petropars Company holding the remainder. At the same time, Iran was desperate to increase the pace of development of the fields in its oil-rich West Karoun area, including North Azadegan, South Azadegan, North Yaran, South Yaran, and Yadavaran, in order to optimise oil flows ahead of further clampdowns on exports by the US.

Read more

China’s other nuclear option in trade war with US – Rare earth materials

China, though, which at that time was engaged in just the opening shots of the trade war with the US was loathe to completely disregard all US sensibilities when it came to Iran but equally saw itself as a longstanding partner of the Islamic Republic, not to mention always being cognisant of its need to ensure diversity of energy supply. At that point, China agreed a trade-off with the US that in exchange for it halting active development of SP11 it would be allowed to continue its activities in North Azadegan and would be able to go ahead with its development of Yadavaran – the second of China’s major Iran projects. China told the US that its continued involvement in North Azadegan could easily be justified to anyone else who might be interested – such as the mainstream media – on the basis that it had already spent billions of dollars developing the second phase of the 460 square kilometre field. Similarly, China said at the time, its ongoing activities on Yadavaran could be justified by dint of the fact that the original contract had been signed in good faith in 2007, way before the US withdrawal from the nuclear deal in May 2018 and thus, legally speaking, it had every right to go ahead.

The third of China’s major as yet unfinished projects in Iran was the build-out of the Jask oil export terminal, which – crucially, particularly in the current security situation – does not lie within the Strait of Hormuz or even in the Persian Gulf, but rather in the Gulf Of Oman. Even before the new US sanctions, the Kharg export terminal was not ideal for use by tankers as the narrowness of the Strait of Hormuz means that they have to go very slowly through it. With the new sanctions in place and tit-for-tat tanker seizures regularly occurring, China would have little choice but to put at least a couple of its own warships into the Gulf to safeguard their passage or stop buying Iranian oil entirely, neither of which Beijing particularly wants to do.

So, according to the plans, a US$2 billion or so 1,000 kilometre oil pipeline will connect Guriyeh in the Shoaybiyeh-ye Gharbi Rural District, in Khuzestan Province (south-west Iran), to Jask County, in Hormozgan Province (south Iran), with any financing required over and above that provided for Iran to be made readily available from China. Also to be constructed in Jask is an initial 20 storage tanks each capable of storing 500,000 barrels of oil, and related shipping facilities, at a cost of around US$200 million. Overall, the intention is for Jask to have the capacity to store up to 30 million barrels and export one million barrels per day of crude oil. There are adjunct plans to build a large petrochemicals and refining complex in Jask as well, with the prime market for produced petchems – including gasoline, gas oil, jet fuel, sulphur, butadiene, ethylene and propylene, and mono-ethylene glycol – again being China. According to a recent comment by the director of projects at Iran’s National Petrochemical Company, Ali Mohammad Bossaqzadeh, the project would be built and run by Bakhtar Petrochemicals Holding, although ‘other foreign companies’ may take part. In fact, according to the Iran source, China has also offered to send as many engineers and other professionals required in such a project to Iran for as long as necessary.

Having said that, and aware of the leverage that it had with Iran as one of the very few countries still willing to engage in developing its fields in the midst of increasingly vigorously-imposed sanctions, China has sought deal sweeteners from Iran, and has been given them. In order for it to reactivate its development of SP11, China will get a 17.25 percent discount for nine years on the value of all gas it recovers. “This is the value of the gas as applied to CNPC’s cost-return formula against the open market valuation, and currently the net present value of the site is US$116 billion,” the Iran source told OilPrice.com. For its part, China has agreed to increase the production from its oil fields in the West Karoun area – including North Azadegan and Yadavaran – by an additional 500,000 bpd by the end of 2020. This dovetails with Iran’s plan to increase the recovery rate from these West Karoun fields that it shares with Iraq from the current 5 percent (compared to Saudi Arabia’s 50 percent). “For every one percent increase, the recoverable reserves figure would increase by 670 million barrels, or around US$34 billion in revenues with oil even at US$50 a barrel,” the Iran source said.

If there is any further pushback from the US on any of these Chinese projects in Iran, then Beijing will invoke in full force the ‘nuclear option’ of selling all or a significant part of its US$1.4 trillion holding of US Treasury Bills, with a major chunk of the paper due to be sold in September on this basis. This massive holding of these bonds – through which the US finances its economy and is an important factor both in the value of the dollar and therefore in the health of US international companies especially – has been used as a bargaining chip before by China, especially when it feels threatened. Back in 2007, just before the great financial crisis, a number of senior Chinese figures at various state-run think tanks – through which China often signals its big geopolitical threats – stated that the large-scale selling of this massive Treasury Bill holding would trigger a dollar crash, a huge spike in bond yields, the collapse of the housing market and stock market chaos.

Such a tactic would neatly fit into China’s overall strategy to have the renminbi challenge the US dollar’s status as the key global reserve currency and the prime currency for global energy transactions. “The long-planned sequencing for this was inclusion in the SDR {Special Drawing Rights] mix, which happened in 2016, increasing use as a trading currency, which followed that, use as the key currency of an international energy trading exchange, which has occurred with the creation of the renminbi-denominated Shanghai International Energy Exchange in last year, and the calls from big oil producers and other major trading nations to use the renminbi, which has been happening over the past few years,” the head of a New York-based commodities hedge fund told OilPrice.com. Only recently, Leonid Mikhelson, chief executive officer of Russian oil major, Novatek, said that future sales to China denominated in renminbi is under consideration and that US sanctions accelerate the process of Russia trying to switch away from US dollar-centric oil and gas trading and the damage from potential sanctions that go with it. “This has been discussed for a while with Russia’s largest trading partners such as India and China, and even Arab countries are starting to think about it… If they do create difficulties for our Russian banks then all we have to do is replace dollars,” he said. “The trade war between the US and China will only accelerate the process,” he added.

The trade war with the US, though, may be the very reason why this policy is not being pushed right now by China, Rory Green, Asia economist for TS Lombard told OilPrice.com last week. “With the renminbi weakening, and set to reach 7.50 to the [US] dollar level if the US imposes 25 percent tariffs on all Chinese exports, it is more difficult for China to persuade the big oil producers like Russia, Iran, Iraq, Venezuela, to make the switch away from the dollar,” he said. “For China as well, the timing is not quite right, as its use of Eurodollar financing is currently significant, it has a lot of dollar-denominated bonds rolling over shortly, and its balance of payments needs a relatively healthy US demand profile, but China wants to get away from the dollar system and that is the overall direction of travel,” he concluded.

This article was originally published on Oilprice.com

Source: rt.com “China prepares its ‘nuclear option’ in trade war”

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


Trump delays tariffs on Chinese cellphones, laptops, toys; markets jump


David Shepardson, David Lawder

WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales.

The delay which, affects about half of the $300 billion target list of Chinese goods – along with news of renewed trade discussions between U.S. and Chinese officials – sent stocks sharply higher and drew cautious relief from retailers and technology groups.

Trump’s 10% tariffs will be effective from Dec. 15 for thousands of products including clothing and footwear, possibly buttressing the holiday selling season from some of the fallout from the protracted trade spat between the world’s two largest economies.

We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers,” Trump told reporters in New Jersey. “Just in case they might have an impact on people, what we’ve done is we’ve delayed it so that they won’t be relevant to the Christmas shopping season.”

The U.S. Trade Representative’s Office announced the decision just minutes after China’s Ministry of Commerce said Vice Premier Liu He conducted a phone call with U.S. trade officials.

Liu agreed with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to speak again by phone within the next two weeks, the ministry said.

Trump has said the two sides may still meet in early September as scheduled.

APPLE SHINES

The delay in tariffs on a substantial portion of a $300 billion list of remaining Chinese imports sent U.S. stocks surging, after steep losses in the past week, with the Standard & Poor’s 500 .SPX up 1.5% and the Nasdaq Composite .IXIC gaining nearly 2%.

Shares of market bellwether Apple Inc (AAPL.O) soared 4.2% on news that its core iPhone, tablet and laptop computer products would be spared from tariffs for the time being.

But the Trump administration still plans to impose 10% tariffs on thousands of Chinese food, clothing and other consumer electronics products beginning Sept. 1.

Among these are Chinese-made smartwatches from Apple and Fitbit (FIT.N), smart speakers from Amazon.com Inc AMZN., Google (GOOGL.O) and Apple, and Bluetooth headphones and other devices, a category estimated at $17.9 billion last year by the Consumer Technology Association.

Flat screen televisions from China, a category worth $4.5 billion, also will face 10% tariffs on Sept. 1 after being spared from Trump’s first round of tariffs more than a year ago.

Live animals, dairy products, skis, golf balls, contacts lenses, lithium ion batteries and snowblowers will also get tariffs on Sept. 1

Based on a Reuters analysis, the delay could extend to around half of the $300 billion list of remaining Chinese imports. Chinese imports subject to the tariffs on Dec. 15 totaled about $156 billion last year, according U.S. Census bureau data.

Most retailers would have stocked their holiday merchandise before the earlier September deadline, some might have faced the tariffs for fill-in orders late in the holiday shopping season.

Still, the Retail Industry Leaders Association said “removing some products from the list and delaying additional 10% tariffs on other products, such as toys, consumer electronics, apparel and footwear, until Dec. 15 is welcome news as it will mitigate some pain for consumers through the holiday season.”

The Consumer Technology Association applauded the delay on some items, but added: “Next month, we’ll begin to pay more for some of our favorite tech devices – including TVs, smart speakers and desktop computers. The administration should permanently remove these harmful tariffs and find another way to hold China accountable for its unfair trading practices.”

The 21-page-list of products that will not get hit with tariffs until December also includes baby monitors and strollers, microwaves, instant print cameras, doorbells, high chairs, musical instruments, ketchup dispensers, baby diapers, fireworks, sleeping bags, nativity scenes, fishing reels, paint rollers and food products.

A separate group of products will be removed from the tariff list altogether, the USTR said, “based on health, safety, national security and other factors.” It did not immediately identify these items.

Trump announced the Sept. 1 tariffs less than two weeks ago, blaming China for not following through on promises to buy more American agricultural products during talks in Shanghai at the end of July. That move was met with a drop in China’s yuan currency a few days later, prompting the Trump administration to declare Beijing a currency manipulator and sending markets tumbling for several days last week.

Since Trump’s Aug. 1 tweets announcing the new tariffs, the U.S. benchmark S&P stock index has dropped more than 4%.

The tariff delay, combined with renewed talks with China, suggest Trump may be willing to compromise.

In a sign the administration may be expecting something in return, Trump tweeted on Tuesday: “As usual, China said they were going to be buying “big” from our great American Farmers. So far they have not done what they said. Maybe this will be different!” Trump tweeted.

Trump’s tariff delay comes amid growing concerns about a global economic slowdown. Goldman Sachs said on Sunday fears of the U.S.-China trade war leading to a recession were increasing and Goldman no longer expects a trade deal between the two countries before the 2020 U.S. presidential election.

Trump has also personally criticized Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl amid an opioid overdosing crisis in the United States.

The USTR office plans to conduct an exclusion process that could allow more items to be removed from the 10% tariff list.

Reporting by David Shepardson, David Lawder, Makini Brice and Susan Heavey in Washington; additional reporting by Jeff Mason in Morristown, New Jersey; editing by Tim Ahmann and Marguerita Choy

Source: Reuters “Trump delays tariffs on Chinese cellphones, laptops, toys; markets jump”

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


Huawei to start using its own operating system


The Chinese telecom giant faces the threat of losing access to Android systems as the US-China trade war escalates

By Sebastien Ricci

Chinese telecom giant Huawei unveiled its own operating system on Friday, as it faces the threat of losing access to Android systems amid escalating US-China trade tensions.

Richard Yu, the head of Huawei’s consumer business, told a press conference in the southern city of Dongguan that the new system, called HarmonyOS or HongMeng in Chinese, would “bring more harmony and convenience to the world.”

The highly-anticipated software is considered crucial for the tech group’s survival as it confronts a looming White House ban on US companies selling technology products to Huawei which could remove its access to Google’s Android operating system.

Yu said the new system was a “future-oriented OS” which would be “more smooth and secure,” and added it was “completely different from Android and iOS.”

Huawei said the first version of the operating system would launch later this year in its smart screen products, before expanding across a range of smart devices including wearable technology over the next three years.

Trade war

If you’re asking when will we apply this to the smartphone, we can do it at any time,” said Yu, adding that they gave priority to using Google’s Android operating system, which is compatible with Harmony.

However, if we cannot use it (Android) in the future, we can immediately switch to the Harmony OS,” he said.

In May the company was swept into the deepening trade war between Beijing and Washington which has seen punitive tariffs slapped on billions of dollars of two-way trade.

Huawei – considered the world leader in superfast fifth-generation or 5G equipment and the world’s number two smartphone producer – has been blacklisted by US President Donald Trump amid suspicions it provides a backdoor for Chinese intelligence services, something the firm denies.

On Thursday Beijing slammed US rules banning Huawei and other Chinese companies from government contracts, saying they amounted to an “abuse of state power.”

As a result of US moves to blacklist Huawei, American companies are theoretically no longer allowed to sell technology products to the firm, but a three-month exemption period – which ends next week – was granted by Washington before the measure came into force.

That ban could prevent the Chinese tech firm from getting hold of key hardware and software including smartphone chips and elements of the Google Android operating system, which equips the vast majority of smartphones in the world, including those of Huawei.

Huawei has reportedly been working on its own operating system since 2012, but the group has always said publicly it did not want to replace its Android phones with a home operating system.

Plan B’

Yu told German newspaper Die Welt in an interview published in March that creating their own operating system was “Plan B.”

Huawei will be able to “develop at a lower cost a brand new ecosystem” and “mitigate its dependence on US suppliers for its software needs,” Kenny Liew, technology analyst at Fitch Solutions, told AFP.

However, smartphones using the system would mainly be confined to the Chinese market, Liew said.

Developing an operating system and the entire ecosystem that accompanies it is a complex affair.

Apart from Google’s Android, the only other popular operating system is Apple’s iOS, available exclusively on the iPhone.

Microsoft pulled the plug on its Windows Phone platform earlier this year, and Samsung’s Tizen system is barely known compared with Android and iOS.

But without access to the full version of Android or the popular services of Google – not to mention the many applications available on the Google Play store – Huawei may have trouble convincing consumers outside China to buy its phones.

AFP

Source: Asia Times “Huawei to start using its own operating system”

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