SCMP says in its report “German firms find US less reliable than China as trading partner after getting caught between Trump and a hard place to do business” yesterday, “China ranked higher than US and Britain as trading partners in a survey of 2,000 German companies by Commerzbank”
According to the survey, “China was ranked third in an assessment based on political and economic conditions affecting trade, with a score of 30, led by Germany itself way out ahead on 65, and France on 39. The US, in fourth place, was a long way behind on 17 points, followed by Italy (11), Russia (10), Great Britain (8), Brazil (5) and Turkey (3), according to the results of the survey issued on Wednesday.”
China’s further opening-up with its new law on foreign investment succeeds in attracting German companies. US President Trump’s protectionism, on the contrary, will make things difficult for German companies to do business with the US.
Comment by Chan Kai Yee on SCMP’s report, full text of which can be viewed at https://www.scmp.com/business/banking-finance/article/3012302/caught-between-trump-and-hard-place-do-business-german.
Breitbart says in its report “Trump Says He Will Hike Tariffs to 25% on $200 Billion of Chinese Goods” today that US President would hike import tariffs from 10% to 25% on $200 billion of imports from China on May 10 and would soon impose 25% tariffs on an additional $325 billion of imports from China.
In spite of lots of good news on the potential success of the talks between the US and China to end the trade war, this blogger believes that the trade war is inevitable as deep in Thucydides trap, the US would attempt to attack China to stop China’s rise. Trade war is the only choice as the US is not strong enough to attack China militarily. However, a limited war between the US and China is still possible given the arrogance of US strategy illiterate generals.
Anyway, China has gained 5 months of time to carry out its BRI for moving its labor-intensive industries to developing countries and form a united front with EU and Japan for resistance of US trade war attacks. It has thus been laying the foundations for its final victory in the trade war.
Comment by Chan Kai Yee on Breitbart’s report, full text of which can be viewed at https://www.breitbart.com/asia/2019/05/05/trump-says-hike-tariffs-25-200-billion-chinese-goods/
China has been conducting BRI win-win cooperation with over 100 nations and international organizations including quite a few European countries. Chinese president Xi Jinping’s recent Europe tour and his speech at 2nd Belt and Road Forum that promises further opening to the outside world attract EU. EU certainly want to be benefited by the connections and other infrastructures such as power plants built by BRI in developing countries and the expansion of the market there brought about by the development of infrastructure there. It now wants to join China’s BRI as a group instead of separately by specific members one by one.
That was what German Economy Minister Peter Altmaier said on April 26 according to Reuters’ report “Europe wants to deal with China as a group: German minister” the same day.
It is Xi’s success in forming a United Front with EU to counter the US as EU is also under US trade war threat.
Now, according to Reuters’ report “Trump pressed Japan’s Abe to build more vehicles in the U.S”, the US is pressuring Japan too. Japan has already been making efforts to improve ties with China though it does not join China’s united front against the US. However, US demand for considerable concessions from Japan may well push Japan into China’s united front.
China is winning over US allies with win-win cooperation while the US is pushing its allies away to China with zero-sum demands. The two countries are now joining efforts to enable China to form a united front against the US.
Comment by Chan Kai Yee on Reuters’ reports, full text of which can be viewed at https://www.reuters.com/article/us-china-silkroad-germany/europe-wants-to-deal-with-china-as-a-group-german-minister-idUSKCN1S20R3 and https://mobile.reuters.com/article/amp/idUSKCN1S30KO.
Forbes’ report “Huawei: U.S. And Europe Divided As Germany Officially Rejects Washington’s Demands” on April 14 says that Germany rejects US demands on excluding China’s Huawei in Germany’s attempt to develop 5G. That is what Chinese President Xi Jinping has achieved through his recent summit with EU, German and French leaders in forming a united front with EU in resisting US trade war.
Comment by Chan Kai Yee on Forbes’ report, full text of which can be viewed at https://www.forbes.com/sites/zakdoffman/2019/04/14/huawei-u-s-and-europe-divided-as-germany-formally-rejects-washingtons-demands/#4d1574133bea.
Chinese leaders had the vision to see the looming trade war so that they began early their efforts to form a united front against the US.
Japan had tried hard to improve relations with China since US withdrawal from the Trans-Pacific Partnership (TPP), but was always rejected by China. However, in order to form a united front for resistance of trade war, in late January 2018, Chinese Foreign Minister Wang Yi declared China’s intention to improve ties with Japan.
Warm diplomacy soon intensified between China and Japan resulting in Japanese Prime Minister Shinzo Abe’s friendly visit to Beijing from October 24 to 26, 2018.
I said in my post on October 14 before the visit that it was US pressures that had pushed China and Japan into each other’s arms.
Now, Trump’s trade war with China seems to end soon. EU and Japan will be his next targets. Chinese President Xi Jinping’s recent visit to Italy and France followed by Chinese Premier Li Keqiang’s summit with EU leaders have enabled China to win over Europe to form a united front against the US. It is indeed bizarre that the US fails to see the trend of strong defense it will encounter to its trade war attacks at EU and Japan.
Bloomberg’s report “As China Trade War Cools, Japan Braces for Its Clash With Trump” on April 11 foresees the strong resistance Trump will encounter in his trade war with Japan.
The report says that to strengthen Japan’s position Japan has signed trade agreements with EU so that China’s united front with EU has already included Japan. In addition Japan and other 10 members of TPP have established TPP excluding the US.
The report says, “Prime Minister Shinzo Abe is desperate to avoid tariffs or quotas on lucrative auto exports, while Trump wants to crack open Japan’s agricultural market and reduce a $60 billion trade deficit.” However, Japan has cheap source of agricultural products from TPP members and in addition from ASEAN if ASEAN + 3 (Japan, South Korea and China) free trade area is successfully established. Import tariffs will be zero or very low from TPP and the free trade area. Japan has been the major obstacle to the establishment of the free trade area. Now, Japan has become enthusiastic, the free trade area will soon be a reality.
China’s further opening-up and the success of China’s Road and Belt initiative (BRI) will expand Japan’s market of cars and other industrial products in China and Silk Road belt. When China-Japan ties began to improve, Japan expressed its interest to join China’s BRI. Now, US trade war against Japan will force Japan to take active part in BRI.
The Chinese Communist Party (CCP) regards united front as one of its three magic weapons in its war of resistance against Japan and civil war. Now, it seems that united front seems to be CCP’s magic weapon again in China’s trade war with the US.
Comment by Chan Kai Yee on Bloomberg’s report, full text of which can be viewed at https://www.bloomberg.com/amp/news/articles/2019-04-11/as-china-trade-war-cools-japan-braces-for-its-clash-with-trump.
Japan is America’s closest ally in Asia. Its Prime Minister Abe has made great efforts to help former US President Obama establish the Trans-Pacific Partnership (TPP) to contain China. However, Obama’s successor President Trump, though is trying hard to contain China with trade war now, scrapped TPP as soon as he was inaugurated in spite of Abe’s great efforts in trying to persuade Trump not to do so.
Moreover, Trump has been pressuring Japan to make trade concessions to the US in order to reduce US trade deficit with Japan.
He has thus pushed Japan into China’s arms. According to Reuters’ report “China, Japan to forge closer ties at ‘historic turning point’” on October 25, Abe is now making great efforts to improve relations with China that he previously tried hard to contain and will make efforts to make Regional Comprehensive Economic Partnership (RCEP) a reality, which China takes the lead to form in order to counter Obama’s TPP.
There were also Reuters’ reports “Pakistan PM Khan, in search of loans, to visit China next week” and “Iran to boost oil supplies to China in October-November: Rosneft CEO” the same day on Pakistan seeking financial aids from China and Chinese purchase of Iran’s oil to help Iran deal with US sanctions.
However, the most disappointing Reuters’ news for the US on that day is “India aim to hold army drills in China by end of year”. Due to the border dispute between China and India, the US has tried hard to have India join its quad of the US, Japan, Australia and India to counter China. However, India refused to join the other three of the quad in their military drill. On the contrary has been planning to conduct military drill jointly with China that the US wants it to contain.
What India, Japan, Iran and Pakistan have been doing proves that the US is risking being entirely isolated in Asia while China is successful in forming a united front in Asia to counter US hegemony.
Comment by Chan Kai Yee on Reuters’ reports, full text of which can repectively be viewed at https://www.reuters.com/article/us-china-india-defence/china-india-aim-to-hold-army-drills-in-china-by-end-of-year-idUSKCN1MZ1BW, https://www.reuters.com/article/us-china-japan/china-japan-to-forge-closer-ties-at-historic-turning-point-idUSKCN1MZ00O, https://www.reuters.com/article/us-iran-oil-china-rosneft/iran-to-boost-oil-supplies-to-china-in-october-november-rosneft-ceo-idUSKCN1MZ15K and https://www.reuters.com/article/us-china-pakistan/pakistan-pm-khan-in-search-of-loans-to-visit-china-next-week-idUSKCN1MZ1HZ.
This is a very interesting era of world trade war. We may suffer the consequence of such a war, which I hope is not serious, but we shall not fail to be entertained by the developments.
There was the possibility of a real war with military forces between China and the US but due to Chinese President’ Xi Jinping’s resolute fast construction of artificial islands, a military war between the US and China has been avoided.
The US sent two aircraft carrier battle groups to force China to accept Hague arbitration award that deprived China of all its historical interests in the South China Sea but failed as China challenged it with war. US military was well aware that with three airstrips on China’s artificial islands supported by Chinese airbases along China’s coast the US has significant geographical disadvantages to fight a war with China in the South China Sea. Other seas along Chinese coast are too shallow for US huge submarines to maneuver. The US has to invest tens of billions dollars to develop B-21 to attack China.
Now, China has deployed its J-20 heavy stealth fighter jets for air supremacy to make it impossible for the US to win a war near China.
However, Thucydides trap still works in spite of that. The US has to defeat China in order to prevent China from surpassing it. Trump is shrewd to resort to less risky trade war to destroy China or at least hinder China’s rise.
However, he does not seem shrewd enough in trying to break the de facto alliance between China and Russia. The alliance makes it impossible for the US to defeat China even if the US has developed B-21 bombers to bomb Beijing. The US simply cannot break the alliance due to Russia’s economic dependence on China.
Anyway, it is really burdensome to deal with the alliance of two strong powers. Trump is wise to strive to improve relations with Russia so as to be able to concentrate US strength in containing China. But he fails to realize the difficulty to overcome American politicians, media and people’s hostility towards Russia so that his efforts have backfired.
China, however, has been benefited by Trump’s efforts to improve US relations with Russia.
Russia is EU’s major challenge. The two sides have been contending to win over Ukraine for a long time due to their core interests there, but the US has no such conflicts of interests with Russia. Therefore there are no significant obstacles to surmount for improvement of US-Russia relations. Americans’ hostility towards Russia is ideological without major conflict of interests.
If US-Russia relations have improved, EU members have to increase their military budgets for their defense against possible Russian aggression. Removing one enemy while reducing the burden to protect his European allies, that is Trump’s wishful thinking.
However, Trump fails to see that in doing so he is pushing EU to China’s side.
In my previous posts I said China-Russia alliance was impossible if Obama did not pushed them together. The two neighbors have a long history of conflicted interests.
Now, China and EU does not have serious conflicts of interests. EU wants China to open its market while China is precisely doing so as its further reform requires that.
EU fears China’s influence in eastern and central Europe, but China can prove to EU that its influence is purely economical. China has do so in Central Asia to convince Russia. It can also prove that to EU in eastern and central Europe.
Reuters’ report today titled “Forcing China on trade with illegal action will not work: EU’s Malmstrom” precisely proves that the Trump-Putin summit and Trump’s threat of trade war with EU are pushing EU to China’s side.
China is now making every effort to set up a united front with EU against the US. Quite a few analysts believe that such a united front is impossible, but Trump is making it possible.
Comment by Chan Kai Yee on Reuters’ report “Forcing China on trade with illegal action will not work: EU’s Malmstrom” today, full text of which has been reblogged by him in his post today.