Trade War with China


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localizer

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Are you sure? Do you remember how painful the Tiananmen sanctions were for China? China was that close in accessing state-of-the-art American helicopters, tanks, and radars. In fact, even Deng Xiaoping's grandson admitted that China needs to "know its place." Again, the international system has never been fair. It's brutal! China cannot demand others to adapt to its rise. Beijing has to adapt in order to survive and become prosperous. Just think of Imperial Japan before 1923. Japan actively supported Pax Britannia until it was powerful enough to decouple. That was the point of Deng Xiaoping's "hide your edge and nurture your strength." Ultimately, China did indirectly receive benefits from the U.S.-led hegemony in Asia between 1972 and 2017. While the U.S.-led alliance prevented China from taking Taiwan, it also castrated Japan militarily and prevented South Korea and Taiwan from going nuclear. The only major pain in the neck for Beijing was Taiwan (but this could wait), and occasionally having to pay lip service to democracy and human rights under Pax Americana. Coming back to trade. If China does agree to shrink the size of its state-owned actors while allowing more private and foreign-invested firms to have a bigger share of the market through rule of law (independent judiciary that protects small businesses from arbitrary administrative orders and well-connected SOEs) and fair competition, Beijing could really accelerate urbanization and enhance consumption. This is exactly what Xi Jinping hoped to achieve when he came to power in 2013. Keep in mind it is the private sector, not SOEs, that accounts for 70% of high-tech innovation and 80% of employment, which relates directly to social stability and legitimacy of the CCP. I am not saying SOEs are unnecessary (SOEs are indeed extremely important during wartime mobilization), but SOEs with too much administrative support and privileged access to loans (not available to private and foreign investors) hinder market competition.

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Heh this was what my pops said:
Do you remember how painful the Tianamen sanctions were? This is nothing, China will get through it.
 
Yes, an Iran war now would be catastrophic.

But whether Bolton gets his Iran war is another matter
Please elaborate what is your view to the conclusion that Iran war would be a catastrophic? (I agree with you, I just want to know your views)

The US just simply send hundreds of cruise missiles randomly on Tehran buildings and after that Trump would declare a huge war victory. Land invasion is another matter, no way the US force would be able to control Iran .... heck even for a country like Afghanistan ... the US land force is practically useless
 

Peter2018

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Speaker Pelosi commented on re-accessing the HK autonomy status just today. Let's see what Trump tweets.

You should see the unreliable list, this extradition bill, rare earths, tech regulations, opening up financial sector, lowering tariff to others except US, all together as a package setting up the long haul slog.

This extradition bill is setting up to kill several birds with a single shot. We'll have to wait and see how it turns out.
For what birds is this extradition bill designed for?
We probably will see GM and Japan car manufacturers being shut out of the Chinese market, while opening the vehicle market further to European manufacturers.
 

AndrewS

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Please elaborate what is your view to the conclusion that Iran war would be a catastrophic? (I agree with you, I just want to know your views)

The US just simply send hundreds of cruise missiles randomly on Tehran buildings and after that Trump would declare a huge war victory. Land invasion is another matter, no way the US force would be able to control Iran .... heck even for a country like Afghanistan ... the US land force is practically useless
There is no way that Iran will just take hundreds of cruise missiles hitting its territory.

In response, does Iran send hundreds of missiles back at the US naval forces in the Persian Gulf?
Or hundreds of missiles at the US bases in Saudi/Kuwait/Bahrain?
Or does it mine the Straits of Hormuz and cut off Middle East oil exports? After all, Iran is blocked from selling its own oil, so why wouldn't it close the Straits?
Or do militias and proxies attack hundreds of soft US targets in Iraq, Afghanistan and the rest of the Middle East?

No land neighbour of Iran is going to allow its territory to be used by the US Army.
So the options are a risky amphibious invasion of Iran, or the US Army invading Iraq and using it as a route to Iran.

And even if they invade and conquer Iran, how does the US exit yet another counter-insurgency quagmire for 10+ years which will be worse than Iraq or Afghanistan.

How does it end???

There are too many neo-cons in the US government (like the Bolton the National Security Advisor) who keep thinking that they can use force to impose their views.

Note that is just Iran. Just imagine what could happen in a US-China conflict
 
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AndrewS

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The view from the Financial Times in London, which reflects the consensus view in Europe.

Remember that Europe has a hi-tech economy which is larger than the US economy.

And I think it would have made sense to point out that China does have a population some 4x larger than the US. That translates into a domestic market some 4x bigger for many products.


US-China trade war risks global technology split

THE EDITORIAL BOARD

Decoupling will not support American security or economic interests


Chinese technology firms such as Huawei have been among the chief targets of the trade dispute with the US. The Trump administration’s desire to exclude them from the US is driven by security and economic concerns, and the hope of preserving America’s tech dominance. In reality, banning Chinese companies may do more to harm the US.

A “Fortress America” approach, restricting access to the global marketplace, may only spur Chinese innovation. At worst, it could lead to the splitting of the internet between US and Chinese spheres. In the long term, the Trump administration could be hoisted with its own protectionist petard.

American restrictions on Chinese technology have intensified since 2018. Last August, a defence bill prohibited the US government and its grantees from using Huawei telecoms equipment. The Chinese company was added last month to the US “entity list”, requiring American companies to receive a government license to sell to it. President Donald Trump has also empowered commerce secretary Wilbur Ross to ban any technology company considered to pose a national security risk. Mr Ross is due to make his decision in just over three months.

The desire to protect national security is understandable, not least given the close relationship between Chinese tech companies and the state. Security in the digital age is porous, however. By engaging with Chinese technology, western intelligence services can glean important information. Forcing Huawei to move to its own system may actually weaken security, according to Google. The US tech group, which restricted Huawei’s access to parts of its Android operating system last month, has warned that a Chinese version might be more vulnerable to hacking.

The second belief is that the US can stifle Huawei and other tech companies by delinking China from global tech supply chains. In the short term, the US blacklist will limit Chinese companies’ access to components from outside the country. Huawei’s problems with mobile phone chips — over half of which it imports from the US — may strengthen the argument for this militant approach to trade.

Forcing Chinese technology companies into a corner, however, could speed up domestic innovations. These companies could source products from cheaper markets such as South Korea and produce their own software. At the most extreme, competing Chinese and US-led internets could emerge — as former Google chairman Eric Schmidt has warned. An industry body said this week that standards for 5G internet were at risk of this kind of divergence. That could mean devices produced in one market might be incompatible with those from the other.

This would force countries, and companies, to choose sides in the technological trade war. Recipients of Chinese funding through programmes such as the Belt and Road Initiative will face a diplomatic balancing act. Malaysia’s prime minister has said the country would use Huawei’s technology as much as possible. Powerful US allies including the UK and Germany have come under pressure to ban Huawei. At least two European telecoms groups, meanwhile, have been reported to be weighing setting up separate units for the eastern and western hemispheres.

Keeping supply chains global does not mean being naive. Suppliers should be carefully vetted — particularly when there are historical grounds for concern. But isolating China will not improve national security, or remove the economic threat of Chinese tech groups. Despite its apparent appeal, protectionism is a self-defeating ideology.

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AndrewS

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The results of wargaming the US-China trade war.

The Chinese government almost certainly came to the same conclusions a few weeks ago.


The U.S.-China Trade War Could Drag On For A Long Time

Forbes

Wall Street wants a quick end to the trade war. Businesses on both ends of the trade equation want a quick end to the trade war. But a trade deal won’t be reached and sealed any time soon, as it was with Canada and Mexico. The politics and the context of the two trade disputes are much different.

That’s according to Johan Gott, principal in the consumer and retail practice of global management consultant A.T. Kearney and head of its Trade Wargaming initiative.
...
And there’s the nature of the pay-off for playing the game, according to Tom Elliott, International Investment Strategist at deVere Group. “The winner of the U.S/ China trade dispute will be the side that can play the longest game: Trump wants a deal before his re-election campaign starts, Xi Jining before weaker economic growth threatens civil unrest,” he says.

While Elliott sees the “odds” of winning the game favoring China, he also sees “economic risks,” given the potential for China to suffer greater losses by dragging the game too long.

Meanwhile, there’s the potential of the trade war dragging in other countries.“The longer the dispute goes on, the greater the risks for long-term global growth as third party countries become forced to attach themselves to either the U.S or the Chinese camp and tech supply chains are disrupted,” says Elliott. “For instance, China last week threatened the U.K with unspecified consequences if it banned Huawei 5G technology on security grounds, while U.K-based ARM mobile phone chip designer can no longer supply Huawei if it wants to continue to work with Android and Apple.”

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AndrewS

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I've just been thinking about Ark OS, which may be renamed to Oak OS.

Outside of China, I think Huawei should stick with Ark OS from a marketing perspective, because Oak OS is a bland name with no particular meaning.

But Ark OS evokes imagery of Noah's Ark, which is really powerful for the following reasons:

1. Noah's Ark is one of the key stories in the Book of Genesis.
2. The Book of Genesis is the foundation for the religions of Judaism and Christianity.
3. So almost everyone hears the story of Noah's Ark from their parents/teachers as a small child.
4. And what child isn't amazed at the story of surviving disaster and Armageddon, and then creating a new world.​

That parallels what is happening with Huawei today.

So the emotional imagery works both in the USA (where people are really religious) and in Europe (Which is is not that religious, but which bridles against many things American).
It also works with other countries with a Judeo-Christian background.
Edit. Come to think of it, it's also in the Koran, so add Islam to this analysis as well. Then you end up with 4.2Billion people out of 6.3Billion in the non-Chinese world.

And on an intellectual level, a successful Ark OS will always serve as a reminder and also a warning to policymakers around the world.
 
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CMP

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They are idiots if they change from Ark to Oak. Ark carries such power and meaning to many people. Much more meaningful than “Android” or “iOS”
 

AndrewS

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Looks like Trump is now in election mode.
He'll be even more distracted and unpredictable than usual, whilst trying to win.
On balance, this favours the Chinese in a trade war, although it means more unpredictability.

Trump, Biden trade barbs amid dueling Iowa campaign visits
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Trump lashes out at polls that show 2020 re-election bid in trouble
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Trump Says 'I'd Take It' if Russia Again Offered Dirt on Opponent
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AndrewS

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The latest on Trump's trade war and sanctions with Europe.
Note that Europe has a larger economy than the USA.
And that Germany drives EU policy.


Trump Threatens Merkel With Pipeline Sanctions, U.S. Troop Cut

Donald Trump upped his criticism of Germany on Wednesday as he threatened sanctions over Angela Merkel’s continued support for a gas pipeline from Russia and warned that he could shift troops away from the NATO ally over its defense spending.

Echoing previous threats about German support for the Nord Stream 2 pipeline, Trump said he’s looking at sanctions to block the project he’s warned would leave Berlin “captive” to Moscow. The U.S. also hopes to export its own liquefied natural gas to Germany.

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EU told to ‘brace’ for multibillion Trump tariffs

US president targets aircraft parts in longstanding aviation subsidy dispute.

The Tariff Man is on track to hit hard again this summer, and it's bad news for EU companies ranging from Dutch cheesemakers to industrial heavyweight Airbus.

European Commissioner for Trade Cecilia Malmström warned the EU's trade ministers at a meeting on Monday that they need to steel themselves for U.S. President Donald Trump to hit billions of euros worth of European goods with tariffs, ramping up a decades long dispute over unwarranted subsidies for Airbus.

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Trump Delays EU, Japan Auto Tariffs for 180 Days for Talks

President declares auto imports a threat to national security

President Donald Trump on Friday declared that imported cars represented a threat to U.S. national security but announced a delay in imposing tariffs on imported vehicles and parts from the European Union, Japan and other nations for 180 days to pursue negotiations.

The move avoids opening another front in Trump’s tariff battle with some of America’s key trading partners, yet it also sets the stage for high-stakes talks that are likely to be a persistent irritant in relations.

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