This blogger’s comment: The CNBC report I Reblog below shows that Trump is self-contradictory as he is at a loss what to do. His Chinese counterpart Xi Jinping remains silent as he has full self-confidence. Xi’s comment that he believes that the US does not want decoupling means he is asking the US the question: Does the US want decoupling while he wants to be a friend. For friends, there have to be mutual respect and equality so that China will not accept humiliating terms. That is what makes Trump anxious.
Trump downplays possible G-20 meeting with Chinese President Xi: ‘It doesn’t matter’ if he shows up
Published Fri, Jun 14 2019 • 9:49 AM EDT|Updated an hour ago
- President Trump appears to downplay expectations about a possible meeting with Xi Jinping at the G-20 summit later this month.
- He now says “it doesn’t matter” if the Chinese president shows up or not.
- “If he shows up, good, if he doesn’t – in the meantime, we’re taking in billions of dollars a month [in tariffs] from China,” Trump tells Fox.
President Donald Trump on Friday appeared to play down expectations about a meeting with Xi Jinping at the G-20 summit later this month, saying “it doesn’t matter” if the Chinese president attends.
“If he shows up, good, if he doesn’t — in the meantime, we’re taking in billions of dollars a month [in tariffs] from China,” Trump said in a 50-minute telephone interview on Fox News’ “Fox & Friends.”
Trump’s remarks Friday morning seemed to clash with comments he made just a few days earlier on CNBC.
In that interview Monday, the president vowed to immediately slap tariffs on an additional $300 billion worth of Chinese imports if Xi didn’t attend the G-20 summit, which is scheduled for June 28-29 in Osaka, Japan.
Neither the White House nor the Council of Economic Advisors immediately responded to CNBC’s requests for comment on the president’s latest remarks.
Tariffs are typically paid by the entities that import the shipments. Tariff defenders, including White House trade advisor and China hawk Peter Navarro, argue that the exporting companies are the ones punished.
“So our people are not paying — you know there’s this big thing about tariffs, ‘Oh, our people pay’ — it’s a lot of nonsense. You know what happens, really? Companies move back,” Trump told Fox.
In May, Trump increased tariffs on Chinese imports by $200 billion after trade negotiations between the two economic superpowers fell apart.
The possible bilateral meeting at the G-20 summit was seen by current and former Trump administration officials as a high-stakes stepping stone on the path toward regaining the ground lost with China and eventually securing a deal.
“There won’t be a deal at the G-20,” Clete Willems, a former top Trump trade advisor, said in an interview Tuesday with CNBC’s Kayla Tausche. But a Trump-Xi meeting at the summit could “catalyze a productive period of negotiations where the deal closes.”
Source: CNBC “Trump downplays possible G-20 meeting with Chinese President Xi: ‘It doesn’t matter’ if he shows up”
Note: This is CNBC’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.
According to White House, US President Donald Trump called former US President Jimmy Carter in April 2019 in reply of Carter’s letter to him.
There has been no information about what Carter wrote to Trump about, but as revealed by White House Trump discussed with Carter on phone about his fear of China ‘getting way ahead’ of the US, it seems now that like lots of Americans, Trump has also fallen into Thucydides trap. Then Carter must have written to Trump about China’s rise. He perhaps tried to persuade Trump not to assault China with the trade war.
Carter knows that the trade war is not about trade deficit or the fabricated China’s theft or compulsory transfer of technology but China’s rise to surpass the US.
Carter said, “The main thing that he (Trump) emphasized to me was, the main purpose of his call, was to say very frankly to me on a private line that the Chinese were getting way ahead of the United States.”
Carter was not surprised by Trump’s words and gave the explanation that China focused on its own development without fighting any war since 1979 but in that period the US is always at war to impose its values on other countries.
Now, as the US is not able to attack China militarily, it attacks China with a trade war which is not aimed at stopping China’s rise instead of imposing its values on China.
Regarding China’s rise, Carter, a devout Christian, said in church on Sunday,“As you have heard to your concern perhaps, the Chinese are likely to be number one superpower economically within the next few years.”
He then asked what being a superpower meant? According to him, it’s “not just who has the most powerful military, but who is a champion of the finer things in life”, which should include peace, the environment, human rights and equality that all Christians should believe in.
With that view, Carter is certainly unhappy that Trump has broken peace in fighting a trade war with China and has withdrawn from the Paris Agreement on global warming.
He said China is investing its resources into infrastructure projects while the US has stayed at war. Obviously, he gave Trump the advice to withdraw from war and focus US resources on construction to make US economy grow. Will Trump, deep in Thucydides trap, listen to him?
Trump knows that he has not much ammunition to subdue China with his trade war. His threat of further tariff hikes reflects his weakness. As China does not want the trade war, there may be some agreement to end the trade war, but to win votes for his relection, Trump has to maintain his hostility against China; therefore, Trump and other Americans are bound to create further trouble for China. Judging by what Trump did at the beginning of his administration, perhaps he really wants to be China’s friend in order to exploit China’s vast market, but he has to wait until being reelected. By that time there may be another honeymoon between him and President Xi Jinping Who knows!
Article by Chan Kai Yee.
By Zhang Zhouxiang |China Daily |Updated: 2019-06-12 07:36
At a news conference on Sunday, Geng Shuang, a spokesperson for the Ministry of Foreign Affairs, criticized US Secretary of State Mike Pompeo for making false claims about Chinese telecommunications enterprise Huawei. China Daily writer Zhang Zhouxiang comments:
One remark by Geng in particular created a buzz online. He said that Huawei had obtained 46 commercial contracts for 5G networks in 30 countries worldwide by June 6, and some of the countries are allies of the United States, despite Pompeo working hard to persuade them not to use Huawei products.
Anybody with a normal mind will find it hard to understand why the world’s only superpower is so afraid of a private enterprise from China that it is intent on persuading its allies to cut all business ties with the company.
Business is business, and in business there should only be commercial factors to consider. When any country, be it in Europe or anywhere else in this world, needs 5G services, all it wants are good products, good services and good prices.
Huawei offers all these. According to a report by IPlytics, a patent big data company based in Berlin, four Chinese companies own 36 percent of the world’s patents necessary for 5G standards; Huawei alone has 1,554 of them.
If European countries blindly exclude Huawei from their purchasing lists as the US requires, they would have to spend an extra 428.7 billion yuan ($61.9 billion) building their 5G networks.
Therefore, it is natural for European countries to choose Chinese companies for the construction of their 5G networks. Actually, Huawei is popular among US companies and US consumers, too. Just as Nicholas Negroponte, founder of MIT Media Lab, said in an open letter in May, by banning Huawei, US authorities will force US consumers to choose not-so-good services with higher prices.
Especially, many small telecom companies use Huawei devices in their 5G networks, and if Huawei is banned, they might not be able to benefit from the new technology. US farmers need 5G networks to analyze data of their crops, while US small businesses need them to analyze and decide their purchasing lists.
It is time the US authorities reconsidered their choice: Will they choose being connected, or being out of date simply because of their prejudice against a Chinese company?
Source: China Daily “Pompeo’s scare-mongering falls flat”
Note: This is China Daily’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
Plan for Long-term Victory
In the long run, China’s Belt and Road initiative (BRI) will bring economic growth to developing countries and expand China’s market there. It will enable China to switch lots of its exports from the US to those countries. Moreover, BRI will enable China to move the industries that produce goods for export to the US to the industrial parks built by BRI to avoid US tariff hikes and reduce labor costs. China will thus establish its invincible position in its trade war with the US.
According to Sun Tze, in a war one has to establish one’s invincible position and do not miss the opportunity to defeat one’s enemy.
Regarding to trade war, China is an entirely different country. Its government has centralized power to ban the import of enemy’s goods without tariff hikes. Its reduction in purchase of US agricultural products can do much greater damages than US tariff hikes on Chinese exports.
Trump’s Ingenious Move without Surprise
Seeing that tariff hikes are unable to subdue China, US President Trump tries another way to attack China. He remembers well that China’s telecom giant ZTE would have been killed by US Congress if he had not interfered in its favor. He saw his opportunity to subdue China through attacking Huawei, another Chinese telecom giant.
Americans have already been jealous at Huawei’ leading position in 5G in the world. Trump took the lead in banning Huawei’s 5G in the US and has been telling other countries also to boycott Huawei’s 5G with the lie about Huawei’s espionage on behalf of the Chinese government. Failing to make others ban Huawei’s 5G, Trump invents a much more evil way to kill Huawei by placing Huawei in US trade blacklist to cut US supplies of components and technology that Huawei needs for its survival.
Now tariff hikes are the frontal engagement in Trump’s trade war with China, but banning and placing Huawei in US trade blacklist are indeed an ingenious move that may do real harm to China..
US government’s large amount of tariff revenue from the hikes proves that the tariff hikes have failed to reduce Chinese exports to the US. It proves that the harm caused by tariff hikes to China is limited. Killing Huawei and threatening further killing of other major Chinese tech companies might have really made China suffer.
China has been prepared for Trump’s Ingenious Move
However, the Huawei move though Ingenious lacks surprise. At the very beginning of Trump’s trade war last year, Xi Jinping told Chinese firms to rely on themselves. He made Chinese firms realize the danger of dependence on US supplies of technology and components. Since then Chinese enterprises have been working hard to free from their dependence on US supplies.
It has especially been the case for Huawei. Trump’s banning and telling others to ban Huawei and US efforts to extradite Huawei CFO Meng Wanzhou have caused Huawei to develop substitutes for US supplies since long ago. When Trump placed Huawei on the blacklist, Huawei had already developed substitutes for US supply of components and been developing its own operation systems so that Trump is unable to win with that ingenious move.
China’s Ingenious Surprise Move
Banning supply of rare earth materials for the US may be China’s ingenious move but it also lacks surprise. There has now been too much media report on that now to warn the US about that. China bought rare earth technology from the US so that I do not think it is difficult for the US to develop the technology to produce substitutes.
In his recent visit to Russia, Chinese President Xi Jinping and his Russian counterpart President Putin concluded an agreement to develop bilateral trade and cross-border payments using the ruble and the yuan in order to bypass the US dollar. That is an ingenious surprise move that hits the US where it is most vulnerable.
US economy will soon be surpassed by China. Its military is being caught up by China and Russia. The financial dominance of US dollar is the only strong point that the US still maintains. If it has lost that dominance, there will be no US hegemony at all.
The agreement between China and Russia may set an example for other countries so that trade balance settlement everywhere may gradually be conducted through other currencies not only Russian and Chinese currencies. As a result, US dollar will not longer be the major currencies for trade and financial reserve.
In fact, most countries in the world want to put an end to US dollar’s dominance now. EU has developed Euro for trade settlement in EU. Malaysian PM Mahathir has suggested the use of gold as substitute for US dollar.
The US is hard up now. It does not have enough revenue to make ends meet so that it has to borrow lots of funds from other countries. However, it has no financial problem as it can issue as much US dollars as it needs due to the financial dominance of US dollars.
If US dollar is no longer the dominant trade and reserve currency in the world, the US will not be able to borrow as much as it will for its excessive military spending to maintain its military hegemony.
Article by Chan Kai Yee
Chinese Gifted Strategist Sun Tzu’s Teaching
This blogger has mentioned Sun Tze’s teaching“In any war, win with ingenious surprise move while conducting frontal engagement. (凡戰者，以正合，以奇勝。)”
The surprise ingenious move can be a part of the frontal engagement or but the frontal engagement. For example, the D-Day Normandy landing operations on June 6, 1944. The frontal engagement was across the strait between allied and German troops. The allied troops might invade Calais or Normandy. The choice of Normandy for the site of landing operations was ingenious as German defense there was weaker. As Germany believed that Calais would have more probably been the site of invasion, As the time and date of the move were kept well in secrete, there was full surprise in the ingenious move.
In this case, the frontal engagement is itself an ingenious surprise move.
Therefore, Sun Tzu says that there is unlimited variation in the relations between frontal engagement and ingenious surprise move. A specific commander in a specific combat shall have the talents to design his ingenious surprise move in his specific combat.
According to Sun Tzu, one shall calculate his factors to win and lose a war. Only when his factors to win exceed those to lose can he start the war.
Trump believes that his tariff hikes on Chinese exports will subdue China as China is unable to retaliate with equivalent hikes as US exports much less to China.
That is a naïve calculation.
What counts is not the scale of tariff hikes but the amount of damages to one’s enemy compared with that of the enemy’s counterattack. That is very simple. In real war, what counts is not the comparison of the extent of fire power but the damages the fire power can do.
For example, in a combat in Korean War, US troops kept on air raids and artillery bombardments on the Chinese troops stationed on a hill. The Chinese troops hid in their tunnel and suffered no casualty. The only casualty brought about by US troops’ strong fire power was the death of three of the four members of an artist group who went to the tunnel through a long ditch to entertain the troops with their performance.
My older schoolmate Yu, the surviving artist, arrived at the tunnel alone. He did not know that his co-performers had all been killed but assumed that they had retreated as enemy shelling was too heavy. Yu, a lively boy 15 years old then, gave singing, dancing, rapping and joking performance alone and greatly pleased the troops. At that time, US air and artillery fire was so fierce that Chinese troopers were all confined in their tunnel like prisoners for days. It was really boring to stay in tunnel like that. Yu’s courage and performance greatly raised Chinese troops’ morale. He was honored as a war hero later.
When US army attacked after repeated air raids and bombardments, they suffer much more casualty from the much inferior fire power of Chinese troops’ mortars, guns and grenades.
US Tariff Hikes Fail to Hit
US troops’ problem then was that its much stronger fire power did not hit while Chinese troops much weaker fire power hit.
It is the same with Trump’s tariff hikes. Most of the goods under tariff hikes are indispensable for US consumers and there are no alternative sources of goods of similar quality at lower prices. China’s exports of those goods have not been affected prices of the goods hiked to include the tariff hikes, the US has to keep on importing such goods. As a result, US tariff hikes do not hit China. They, on the contrary hit US itself by hiking American people’s living costs.
China’s Retaliation Hits US Farmers Hard
China’s retaliation tariff, on the contrary, hurts its enemy without harming its own people. Its tariff hikes on US agricultural products, especially soybean hit US farmers hard but do not harm its own as it can find alternative sources for such imports.
Article by Chan Kai Yee
Stella Qiu, Tony Munroe June 10, 2019
BEIJING (Reuters) – China’s exports unexpectedly returned to growth in May despite higher U.S. tariffs, but imports fell the most in nearly three years in a further sign of weak domestic demand that could prompt Beijing to step up stimulus measures.
Some analysts suspected Chinese exporters may have rushed out shipments to the United States to avoid new tariffs on $300 billion of goods that President Donald Trump is threatening to impose in a rapidly escalating trade dispute.
But Monday’s better-than-expected export data is unlikely to ease fears that a longer and costlier U.S.-China trade war may no longer be avoidable, pushing the global economy towards recession.
China’s May exports rose 1.1% from a year earlier, compared with market expectations for a modest decline, customs data showed.
“We expect export growth to remain positive in June, likely supported by continued front-loading of U.S.-bound exports, but it should then tumble in the third quarter, when we expect the threatened tariffs to be imposed,” economists at Nomura said in a note to clients.
“Therefore, we believe Beijing will likely step up its stimulus measures to stabilize financial markets and growth.”
Business distortions related to April’s cut in the value-added tax (VAT) may also have eased, helping export readings, Nomura added.
Analysts polled by Reuters had expected May shipments from the world’s largest exporter to have fallen 3.8% from a year earlier, after a contraction of 2.7% percent in April.
While China is not as dependent on exports as in the past, they still account for nearly a fifth of its gross domestic product.
Trade tensions between Washington and Beijing escalated sharply last month after the Trump administration accused China of having “reneged” on promises to make structural changes to its economic practices.
Trump on May 10 slapped higher tariffs of up to 25% on $200 billion of Chinese goods and then took steps to levy duties on all remaining $300 billion Chinese imports. Beijing retaliated with tariff hikes on U.S. goods.
Trump has said he expects to hold a meeting with Chinese President Xi Jinping at a G20 leaders’ summit late this month, but analysts such as Capital Economics believe the chances of a lasting trade deal are receding as both sides appear to be digging in for a long battle.
Trade sanctions are spreading from goods to services, Capital Economics noted last week, with China issuing a warning to citizens about risks of traveling in the United States and U.S. lawmakers pushing to tighten visas for Chinese students.
Damage from the trade war along with a broader softening in global demand will make 2019 the worst year for trade since the financial crisis a decade ago, with only 0.2% growth, according to economists at ING.
China’s trade surplus with the United States, a major irritant for Washington, widened to a four-month high of $26.89 billion in May, from $21.01 billion in April, Monday’s data showed.
Exports to the U.S. fell at a more moderate pace of 4.2 percent after dropping 13.2 percent in April, while China’s imports of U.S. goods declined 26.8% from a year earlier.
IMPORTS FALL WORST IN ALMOST 3 YEARS
China’s May imports were much weaker than expected, falling 8.5 percent, the sharpest drop since July 2016. That left the country with a trade surplus of $41.65 billion for the month.
Analysts had forecast imports would fall 3.8%, reversing an expansion of 4% in April, which some had suspected was related to the reduction in the VAT.
Highlighting sluggish demand, imports of copper fell. The red metal is widely used in construction, electrical goods and manufacturing and is considered a bellwether for the health of an economy.
For January-May, China’s total exports rose just 0.4% from a year earlier, while imports declined 3.7%.
MORE SUPPORT MEASURES EXPECTED
As trade pressures intensify, analysts believe China will loosen policy further in months ahead to shore up economic growth.
Investors are also watching to see how much Beijing allows the yuan to weaken to offset higher U.S. tariffs. The tightly-managed currency has depreciated nearly 3 percent against the dollar since trade tensions flared in early May and is nearing a closely watched support level.[CNY/]
Analysts do not expect a surprise devaluation from China like one in 2015, which could risk capital outflows and further angering Washington, but some believe more yuan weakness is inevitable if the trade war drags on.
Separate data on Monday showed China’s foreign exchange reserves rose unexpectedly in May, suggesting the central bank has intervened only lightly to cushion the recent fall in the yuan.
The central bank has cut banks’ reserve requirements (RRR) six times since early 2018 and guided some interest rates lower, while urging banks to lend more and keeping ample amounts of liquidity in the banking system.
A growing number of analysts believe it could cut benchmark interest rates in the event of a full-blown trade war, especially if the U.S. Federal Reserve eases policy first.
Beijing also has leaned more heavily on fiscal stimulus than in past downturns, possibly due to high levels of debt left over from past credit sprees. It has fast-tracked infrastructure projects, cut taxes for companies and raised export tax rebates.
The economy has yet to get back on firm footing, however. Factory activity in May contracted more than expected amid weak demand at home and abroad, an official survey showed.
Citing heightened trade uncertainties, the International Monetary Fund (IMF) last week cut its 2019 economic growth forecast for China to 6.2%, which would mark the country’s weakest expansion in 29 years.
Reporting by Stella Qiu, Lusha Zhang and Tony Munroe; Editing by Kim Coghill & Shri Navaratnam
Source: Reuters “China exports grow despite U.S. tariffs, but import slump most in nearly three years”
Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.
June 9, 2019 / 5:04 PM / Updated 9 hours ago
Cate Cadell, Michael Martina
BEIJING (Reuters) – China summoned global technology companies for talks last week following last month’s U.S. ban on selling technology to China’s Huawei Technologies Co Ltd, two people familiar with the matter told Reuters on Sunday.
The blacklisting of Huawei, the world’s largest maker of telecoms network equipment, bars U.S. companies from supplying it with many goods and services due to what Washington said were national security issues, a potentially crippling blow that sharply escalated U.S.-China trade tensions.
Huawei denies that its equipment poses a security threat.
Soon afterwards, Beijing announced it would release its own list of “unreliable” foreign entities. It also has hinted that it will limit its supply of rare earths to the United States.
A person at U.S. software giant Microsoft Corp said the company’s session with Chinese officials was not a direct warning but it was made clear to the firm that complying with U.S. bans would likely lead to further complications for all sector participants.
The company was asked not to make hasty or ill-considered moves before the situation was fully understood, the person said, adding that the tone was conciliatory.
Microsoft declined to comment.
The New York Times first reported on the meetings led by the National Development and Reform Commission (NDRC), saying major foreign tech firms were warned against complying with a U.S. ban on selling American technology to Chinese firms or potentially face what the newspaper described as dire consequences.
The NDRC did not immediately reply to a faxed request for comment from Reuters.
It is not unusual for China to summon representatives of foreign and domestic companies, sometimes in groups, to make its views heard.
One person with another U.S. tech company in China who was briefed by colleagues on the company’s meeting told Reuters that the tone was “much softer” than expected.
“No mentioning of Huawei. No ultimatums. Just asked to stay in the country, contribute to the win-win negotiation,” the person said, declining to be identified by name or company given the sensitivity of the matter.
“I think they realize they still need U.S. tech and products for now; self-sufficiency will take a long time, and only after then they can kick us out,” the person said.
The New York Times reported that other companies summoned for meetings last Tuesday and Wednesday included U.S. computer maker Dell Technologies Inc, South Korea’s Samsung Electronics Co Ltd and SK Hynix Inc, and British chip designer ARM, which last month halted supplies to Huawei.
Samsung and SK Hynix declined to comment. Dell did not immediately respond on Sunday to an emailed request for comment and a spokesperson for ARM could not immediately be reached.
Separately, the editor of China’s Global Times tabloid said on Saturday that Beijing was preparing to curb some tech exports to the United States. In a tweet, Global Times Editor-in-Chief Hu Xijin said that China “is building a management mechanism to protect China’s key technologies.”
“This is a major step to improve its system and also a move to counter U.S. crackdown,” he added. “Once taking effect, some technology exports to the U.S. will be subject to the control.”
Hu did not cite any named sources in his tweet. The Global Times is a tabloid published by the ruling Communist Party’s official People’s Daily.
Also on Saturday, Chinese state media outlet Xinhua reported that the NDRC would organize a study to establish a “national technological security management list system”.
Last week, Reuters reported that Facebook Inc was no longer allowing pre-installation of its apps on Huawei smartphones.
Reporting by Cate Cadell and Michael Martina in Beijing; Additonal reporting by Ju-min Park in Seoul and Stella Qiu in Beijing; Writing and additional reporting by Tony Munroe; Editing by Christopher Cushing
Source: Reuters “China calls in foreign tech firms after Huawei sales ban: sources”
Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.