Trade War with China


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AndrewS

Major
Registered Member
TSMC’s only tie with US is using their market. US can try to throw their entire nation at it like they did with Huawei, but if the international community ignored their word on Huawei, why would they listen on TSMC?

If it came down to the domestic market or the US market, there’s no way they would choose the latter. Not only is it smaller (although not by much), but more importantly the public and even their own employees will lynch them.
If TSMC is blacklisted by the USA, then it would cripple Apple and Qualcomm.

They would have to turn to Samsung or GlobalFoundries to make processors, but they simply don't have that sort of spare production capacity.

So TSMC is fairly safe.
 

CMP

Junior Member
Registered Member
true, but Trump could just change it to just 1% :)
as far as i know, he can’t. 25% is a hard rule written into law. in theory he could rally the democratic house and republican senate into changing law to get 1%, and with enough anti-china sentiment he might even succeed, but i think enough congressman are already too skeptical of trump’s judgement and strategic acumen to go for that. they support his anti-china approach, but they probably don’t think his administration is competent enough to win. handing a 1% lower limit to him would merely give him much more room to lose harder. companies will not simply stop selling to china forever. they will redesign products to be legally compliant which they can then sell to china. the market size and profit motive is simply too large in this case (tens of billions, potentially hundreds of billions) to ignore. many american and vassal suppliers will live or die by those kinds of margins.
 
now I read
Beijing can take a tougher stance in trade talks with US at G20, Chinese economists say
  • But think tank warns retaliatory measures shouldn’t go too far as the ultimate aim is ‘to bring US decision makers back to the negotiating table’
  • Report says a new round of reform and opening up could be launched to handle efforts to ‘contain China’s development’
Published: 8:00pm, 23 Jun, 2019
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China’s strong economic resilience means trade negotiators will be able to take a harder line during upcoming talks with Washington, according to researchers at a Chinese think tank.

But they warned that Beijing should not go too far with retaliatory measures because the ultimate aim was to “bring the US back to the negotiating table”.

The comments came just days before Chinese President Xi Jinping and his US counterpart Donald Trump are due to meet during the Group of 20 summit in Japan to try to find an end to the year-long trade war.

China is seen to be running out of ammunition in the prolonged trade battle, even though it imposed retaliatory tariffs on US$60 billion of American goods this month and has introduced an
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that could be used to punish US businesses.
There are also concerns that the trade war could weigh heavily on China’s economy and even cause social instability.

But in a report released on Sunday, a think tank at Tsinghua University in Beijing said the country’s economic fundamentals remained sound and that China could sustain growth by doubling its middle-income population from the current 400 million to 800 million in 15 years.

As for the trade war, the researchers from the Academic Centre for Chinese Economic Practice and Thinking, led by David Li Daokui, said China could start a “new round of reform and opening up” to handle “an adverse current of anti-globalisation and [efforts to] contain China’s development”.

But they said China should be “patient and restrained” in dealing with Trump, and refrain from resorting to nationalistic economic policies.

“We should take the moral high ground and keep promoting globalisation,” the report said. “Our retaliation is not a purpose but a means, and our ultimate purpose is … to bring US decision makers back to the negotiating table.”

Speaking at a seminar in Beijing on Sunday, Li said China’s economy was expected to grow by 6.3 per cent this year, which is within the government’s target range of 6 per cent to 6.5 per cent. “The direct impact of the trade war is very limited and it’s controllable,” Li said.

A former central bank policy adviser, Li said China no longer relied on exports for growth, citing the country’s shrinking trade surplus in GDP.

China’s
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in May painted a bleak picture for growth after Washington raised tariffs to 25 per cent on US$200 billion of Chinese goods, banned US parts sales to Huawei Technologies and added a number of Chinese firms to a
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.

Industrial production grew by 5 per cent last month – a 17-year low – while fixed-asset investment from January to May expanded at a slow pace of 5.6 per cent. Although exports returned to growth of 1.1 per cent because of front-loading ahead of the US tariff increase, an 8.5 per cent drop in imports was another sign of sluggish domestic demand.

Li said both Xi and Trump had the political will to reach a trade agreement, or at least a temporary deal, but warned that Washington needed to learn from last month’s breakdown in negotiations.

“Their legal focus outweighed the strategic thinking, and there was an overemphasis on legal terms and punishment clauses,” he said. “It will damage the atmosphere if they continue to be preoccupied with these clauses – it’s not the Chinese way of thinking.”

Also speaking at the seminar, Gao Shanwen, chief economist at Essence Securities and a key member of the China Finance 40 Forum, said the trade war had put pressure on the economy, which, if measured in real terms, was already at its lowest point in the past four decades.

“Nearly everyone agrees that we should have a new round of reform and opening up to cope with the situation. In the face of big pressure at home and abroad, the government needs to make some changes,” he said.

Timothy Stratford, chairman of the American Chamber of Commerce in China, said at the same event that the “best scenario” was for Trump and Xi to say “we are good friends, we’re going to instruct our negotiators to go back and continue negotiations”.

He said it would be “a wonderful outcome” if the two sides could reach a deal before October 1, but that would be “very difficult”.
 
now I read
Abandon illusions in face of US pressure
Source:Global Times Published: 2019/6/23 20:28:40
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The US Commerce Department Friday added five more Chinese companies on its Entity List, the latest move by the US to bar Chinese high-tech companies from buying US components. The department said these companies have supported China's military high-tech research.

This move is counterproductive to a planned meeting between two state leaders in Osaka, Japan. Washington believes that the greater the pressure it exerts, the more benefit it can take, which is totally illogical.

Ever since it launched a trade war against China, the US has been finding more ways to apply maximum pressure, and is now inflicting pain on itself. Meanwhile, with increasingly stronger countermeasures, China is more determined to refuse to make concessions on matters of principle. Advancing China's technological and economic capabilities is fundamental to its relations with the US. Washington's latest move will undoubtedly reinforce this understanding.

China aims to safeguard the fair international trade environment and defend its right to develop in an all-round way. China firmly guards its principles but doesn't refuse to make necessary compromises.

The US doesn't want to see China develop its high technology, which is determined by its strategic need to lead China in technology forever. The US will crack down on China by brutal means even when China's progress precisely conforms to international norms. By adding five more Chinese companies to its blacklist, the US has shown that its attitude won't change.

It doesn't matter if the US wants to use a cutoff of components supply to strengthen its bargaining position or is attempting to make China unconditionally concede in the high-tech area - or both.

Without high-tech development, China's economic growth will be deeply limited in the long term. Scientific and technological advance is indispensable for China to achieve a better living standard.

The US is closing its door and cutting off technological exchanges with China. Amid increasingly extreme moves by the US, China has no choice but to strengthen independent research and development and find other directions for opening-up in the fields of science and technology.

We must be confident that a big economy like China's cannot be locked up, and that the US won't be able to endlessly prolong its suppression, which simultaneously jeopardizes its own interests. A stronger and more innovative China will make the US vacillate.

It is not contradictory for China to engage in talks with the US while fighting against it. China's development will always face pressures, which will be persistent unless China collapses. It is important for China to carry on developing and making breakthroughs, which will change psychology and the balance of power during the China-US strategic stalemate.

The entire Chinese society should reach a high consensus and unite in the face of this strategic challenge the US has put on our path toward achieving national rejuvenation. This is about the fundamental interests for all Chinese people, and will determine if our livelihood, and those of our future generations, will continue to improve. We must not become loose sand under pressures from Washington.
 

localizer

Captain
Registered Member
If the US forces TSMC to work for the US and not for China, you’re looking at possible war.

When are they going to recover the territories from the Qing Empire?
The day nukes no longer become an issue.
In the face of climate change, China might just take all of Russia one day.
 

ougoah

Captain
Registered Member
China's greatest asset currently is its state of unity. The very thing being attacked constantly by western propaganda. This is textbook Soviet strategy employed against the West since the 60s being used on China by the original victims. So far China has more or less refrained from playing dirty and perhaps have little energy to spare in that direction even if the will to do so exist.

On one hand, recent events are portrayed as CCP pushing hard into HK and it is creating anti-government sentiments around the world as expected. Even clouding the judgment of young Chinese minds who are growing up tempted into liberal thinking. The above unity is only around with the pseudo-nationalism that is accommodated by the CCP. Without it, China fractures and a power vacuum is created to be filled by Western dominated interests and their proxy Japan. Who is around to stop that? Not Russia anymore. Some of the smaller nations who think they have a beef with China are cheering this on again thanks to the big bad wolf image Washington has carefully crafted over the decades. Chinese success does not help that image either. I mean those disputes are trivial and have existed for decades and in some cases, more than a century. So ask why are those flames being stoked? It isn't China who started building islands first. It wasn't China who unilaterally declared new borders set by colonialists, and it wasn't China who unilaterally sold a disputed island to one of its own citizens!

Another consideration is capitulating to added pressure signifies weakness to all those who are making the moves. This is arguably less desirable than the above potential threat to the further eroding of Chinese soft power and reputation. So essentially Chinese policy makers are stuck between a rock and a hard place. Thankfully the solutions are various and all within Chinese means. Immediate distraction is necessary. It is a war of words at the moment and everybody loses once it turns bloody.

Communism doesn't need to conquer. China doesn't need to invade Taiwan to regain its sovereignty. Time is on China's side and all that is necessary is weathering a tiny bit of rain. Why is that even remotely difficult? It seems few understand the immense amount at stake. Literally a third of the world's productivity and fortune. A great deal of land and resources along with it. Will it go to the old imperialists or will it belong to those who contribute to it themselves? CCP currently represent Chinese unity and sovereignty more than political ideology. Communism is a fleeting flirtation in the scope of even recent Chinese history. In a measly 50 years the form of "Chinese Communism" has shifted and been more dynamic than 200 years of Australian Parliament or whatever Western equivalent. Communism is unlikely here to stay. Chinese are adaptive and pragmatic after all. It is however the best tool we have for the moment because social harmony and national unity are important to development and bitter pills sometimes are the correct course of treatment.

Washington is pushing this towards three ends; military confrontation, CCP giving concessions and slowing down Chinese development, or eroding Chinese image and political power and allowing natural forces to begin disassembling the very structure that have allowed for and sheltered Chinese development.

Exhausting the last two possibilities, it will come to a military confrontation no doubt about it. I don't see them backing down either.
 
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weig2000

Junior Member
I'm really not sure how to make of this Arkboy, and at a loss why you guys spend so much time arguing with him/her.

Arkboy suddenly appeared on this forum and started to make some weird arguments: what if shit A happens to China, and shit B piles on, until shit C doubles down. What is China going to do except to go to hell? His/her logic seems to be all these stuffs are going to happen because they are all bad for China, as if they would somehow happen one after another without consequences to the initiator(s) or push-back/retaliation from China or collateral damages to third-party. Arkboy stated that he/she does not want to see all these happen (and he/she is therefore pro-China supposedly), as if this would reinforce his/her arguments.

At this time, it was clear either Arkboy was too young or too ignorant to engage in discussion of such topic. His/her line of thoughts is stupid but not unprecedented on this thread. People should have really ignored him/her right there.

Then it's getting even weirder: Arkboy offers a solution to China out of its supposedly desperate situation: Taiwan Independence for TSMC. I saw some of the members got enraged or insulted by this suggestion, arguing indignantly that Taiwan is a piece of China's sacred territory and can't be traded for a foundry. I can't believe people still take him/her seriously by now.

Without getting into all the heavy subjects like sovereignty, history, culture, etc., let's just follow this childish thought and suppose China took up the offer and accepted the trade (heaven forbid). TSMC is just a bunch of experienced engineers and managers and depends on equipment from the US and other western countries, while competing in a very dynamic industry. There is no guarantee that these employees will stay or the US will not put TSMC on its "Entity List" or it would not fall behind in technology...

You get the point.

Please ignore Arkboy and do not lower ourselves to such a level. It doesn't matter you're pro-China or pro-US. It's just sheer waste of time and insulting our intelligence.
 
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AssassinsMace

Brigadier
I always tease why doesn't the US just end relations with China if they don't need China? I know it's because they want to keep China under its influence. The only real non-act-of-war punishment the US has against China is through economics. End relations and the US will have no measure of punishment leaving China to be able to violate any of the US rules for the world. Gain more control here, lose more control there. Beyond economics China can pretty much go at least toe-to-toe with acting against US interests in the world.

China can disregard MTCR and sell longer than 300km range missiles to enemy countries of the US which makes it far more dangerous for them. Trump in his arrogance seems to be ignorantly using up all of the US's leverage on China just on trade disputes. China is not even a signatory of MTCR yet self-imposes following that rule to not upset the US so therefore not face actions by the US.

Because of Trump's technological ban list, now the US faces the same problem because of Chinese patents that cannot be used without Chinese permission. Senator Marco Rubio now wants to pass a law that allows US companies to violate China's IP rights. Are they forgetting the Chinese are master counterfeiters and even their side says the Chinese are masters at reverse engineering as well? So beyond some technological gaps, isn't one of the major hurdles of closing that gap is in fact self-imposed where such as in processors, it's the architecture where IP comes into play? When the US uses up all its leverage, there is almost nothing that can stop China from just replicating US technology or be within striking distance of replicating US technology to fill the gap. I saw a YouTube video, maybe posted in here, where a high-tech Chinese factory using their own robotics to manufacture had a room to the side where Chinese engineers were devoted to constantly tweaking on the fly their technology to be better while at the same time already developing the next generation of robotics to replace the ones already on the factory floor.
 
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