“In the event of a trade war with the United States, China’s response would go well beyond tariff increases,” said Mark Williams, Chief Asia Economist for Capital Economics. “U.S. companies would find their products and operations in China subject to tighter regulation that hampered their capacity to do business there.”
“U.S. exports of cars and aircraft would be in the firing line,” he said. China might also subject U.S. companies to tighter regulation that hampers their capacity to do business. Beijing may also encourage its exporters by offering tax rebates to overcome any reduction in export demand in the U.S., Williams said. Continue reading
…and now the Obama administration is going for a total ban on Chinese steel. Anyone paying attention to what could happen instead of what’s already happening is either ignorant or playing politics.
Donald Trump’s threats to hit China with protectionist tariffs of up to 45% on the goods it ships to the US go down well with his supporters on the campaign trail, despite ruffling feathers among free marketeers within his own party. Experts and commentators are less impressed, suggesting The Donald’s proposed trade war could cost US jobs and potentially trigger a global downturn.
What Trump and his opponents fail to acknowledge, however, is that the US is already engaged in a vicious trade battle with China centered on steel exports. China’s overproduction has decimated steel producers all over the world after the country upped its output from 128 million tons in 2000 to 822 million tons in 2014. American steel makers have already lost billions of dollars as a result of China dumping its steel exports on the US economy, while their counterparts in countries from Brazil to Britain have been left facing bankruptcy. Unsurprisingly, American and European steel mills are pushing their governments to take action. Continue reading
By 2015, the trade imbalance ballooned to $365.7 billion in China’s favor. That not only notched a record level for U.S.-China trade but also an all-time high for any bilateral trade ever, as well.
In other words: China has officially entered the currency wars.
China devalued the yuan by the most in two decades, a move that rippled through global markets as policy makers stepped up efforts to support exporters and boost the role of market pricing in Asia’s largest economy.
The central bank cut its daily reference rate by 1.9 percent, triggering the yuan’s biggest one-day drop since China unified official and market exchange rates in January 1994. The People’s Bank of China called the change a one-time adjustment and said it will strengthen the market’s ability to determine the daily fixing.
Chinese authorities had been propping up the yuan to deter capital outflows, protect foreign-currency borrowers and make a case for official reserve status at the International Monetary Fund. Tuesday’s announcement suggests policy makers are now placing a greater emphasis on efforts to combat the deepest economic slowdown since 1990 and reduce the government’s grip on the financial system. Continue reading
Russia and China are both successfully putting a wedge between America and Europe. With their tightening grip on Athens, Europe is threatened in its own homeland and will eventually decide to turn their backs on America. The alternative is to risk potential military conflict with Russia. In the future you will likely see a third marriage between Russia and Europe — and Russian military bases in Greece.
A Chinese executive with shipping company Cosco has helped transform part of Athen’s Port of Piraeus into a success story. The multinational firm now has a controversial plan to acquire the whole facility and put it on track to join the ranks of Hamburg and Rotterdam.
One could argue that China’s long path to Piraeus, Greece, began on April 27, 1961. It’s the day Mao Zedong founded the communist state’s first freight company, the China Ocean Shipping Company (COSCO). The Great Leap Forward, Mao’s plan for industrialization, had proven to be a disaster at the time, leaving millions dead or starving. With Cosco, China had its eyes on overseas markets.
Almost 54 years later, the company is steering toward a major prize in Greece. After lengthy wavering, the Greek government– comprised of Prime Minister Alexis Tsipras, his far-left Syriza party and the right-wing populist Independent Greeks — has announced it will be selling the majority of its share in Athens’ Piraeus Port Authority. So far, Cosco is the most promising bidder. Continue reading
China entered into a sizable currency swap deal with the eurozone this month that represents a stride toward establishing the yuan and euro as key world currencies. The agreement also means fewer U.S. dollars will be used in commerce between China and Europe.
“The agreement is one of the largest currency deals between China and a non-Asian trading partner,” Alanna Petroff wrote for CNN Money on October 10. Continue reading