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Tuesday, February 13, 2018

Dollar vs yuan: what is behind the conflict between America and China

The difficulties in Russian-American relations a little overshadowed another important vector of foreign policy of the United States. We are talking about China, that Washington not so long ago actually declared a trade war. This was done through the mouth of the Advisor to Donald trump – Stephen Bannon, who recently left the post. Despite his departure, the fact that the growing confrontation between the US and China cannot be ignored, as its effect not only on bilateral relations but also in the global environment. The American President, are seen to be sympathetic to China, and has repeatedly stated about the need for economic containment of China. How far can this conflict? Whether we are talking about a new war, or is it just a continuation of the previously stated course? What will be able to respond to Beijing on the probable steps of Washington? “MK” has tried to understand the complicated relations of the two powers.

photo: pixabay.com

Us-China pendulum

China’s economic expansion, perhaps one of the most painful issues for the new us administration. Even in his election campaign, Donald trump special attention was given to trade relations with China. He, in particular, are very emotional, reminded the voters about what brought US to the entry of China into the world trade organization (WTO). “Americans witnessed the closure of more than 50 thousand factories and the loss of tens of millions of jobs. It was not a good deal for America then and is not now. This is a typical example of how politicians in Washington are destroying our country,” – wrote in 2016, trump, incidentally, of course, throwing stones in the garden late of the Obama administration.

In order to rectify the situation, the current occupant of the White house not only promised to declare China a currency manipulator, but to deprive Beijing of export subsidies and other advantages in trade to transfer from China in the United States of American manufacturing and put an end to violations of intellectual property rights from the PRC. The last point to the word, and became the pretext for public statements about the beginning of the economic war with China.

It is worth noting that in Beijing, typical of the region with calm attitude to the election trump. Although his statements of intent to “curb” China fun there not caused. After all, and for the Chinese American presence in the economy is an important factor – not only in terms of profit, but on the question of borrowing from the US advanced technologies.

Wildcat trump, known for his harsh, often contradictory statements, and as a person is not earned award in the middle Kingdom. Especially against the background of restrained, careful in his statements the Chinese leader XI Jinping.

The climax of the situation was reached when the economic war with China, said Stephen Bannon, one of the closest associates of trump and the “architects” of his campaign.

Nevertheless, says the head of the School of Oriental studies, HSE, specialist in the study of China Alexey MASLOV, the latest statements Washington should not be overestimated.

– First of all, you should pay attention to the fact that the confrontation between the US and China, similar to that which they say in Washington, is in a permanent stage for almost decade, – the expert said in an interview with “MK”. – Stephen Bannon, talking about “economic war” with China, in fact just announced the long-known things. Just the fact that over the past few months after winning trump in the presidential election – us policy on China has changed, has swung like a pendulum at least twice.

First we saw the desire to take tougher action against trade with China – such statements sounded immediately before the accession of the new leader of the US in the post. Trump in their rhetoric relied on the people in your circle, absolutely right-wing advisers, including, in addition to Bannon, it can be noted, for example, Peter Navarro (Counsellor for trade and head of the newly established National trade Council; actively criticized the economic policies of not only China, but other American partners, in particular Germany. – “MK”). They, in particular, is required to take more stringent measures against China, believing that the state, and not Russia, is the main real problem for Washington.

– Then, however, the pendulum has swung in the other direction, because the top in the United States took the purely commercial interests – continues Alexey Maslov. – Important role in this process was played by the son-in-law of Donald trump, Jared Kushner, who has a significant financial interest in collaboration with China. In addition, he, of course, was a whole group of people who the Chinese loans and, as a consequence, in favour of the establishment of relations with Beijing. All this, in fact, blurred the concept of right-wing advisers trump, who recently announced’bannon. So now we’re not talking about some fundamentally new steps, the United States, and the declarations that appear constantly…

“Cold in politics — in the economy dearly”

Although the policy of containment of China from the United States did not appear yesterday, the statements themselves trump and his team oblige Washington to take new action. What would they be?

– With regard to the specific steps, the United States, most likely – in my opinion, it is quite possible, will take measures to limit the presence of Chinese capital in its territory, – said in this regard, Alexey Maslov. – We are talking, primarily, about reducing all forms of mergers and acquisitions of U.S. companies by Chinese companies. Under the sign of these processes has already passed almost all of 2016, when between Americans and Chinese was performed transactions of almost $ 56 billion is comparable with the Russian-Chinese trade turnover. Second, likely taken anti-dumping measures concerning deliveries of a number of products from China. And, most likely, restrictions will apply to the products that the US is ready to replace, for example, through the supply of counterparts from Mexico, Brazil, countries in South-East Asia. Thirdly, it is expected that Americans will bring to the end the largest transfer of their industries and companies on its own territory. But in this case it is necessary to understand: we are not talking about what some American company comes, alone, from scratch, is building new plants in the United States. The situation is that it will happen again with the participation of Chinese partners already cooperating. But despite this ambiguous factor, it’s safe to say that the degree of production dependence of the United States from China in a short time is seriously reduced.

– What, in Your opinion, can take in response to these steps Beijing?

– China, of course, will not leave all possible actions of Americans without attention. When discussing this problem we have to understand that while China was just a producer country, the United States is not the excitement caused. Washington drew attention to Beijing, when there was a declared policy of “One belt and one road”. That is when China started to position itself as a global power, with and realizing their interests in many regions of the world. This is what sparked the strong reaction’bannon and his associates. Accordingly, the United States will by all means try to limit the influence of China in other countries, primarily in Southeast Asia, in India, where the already little sympathy for China in Latin America. And the Chinese, in turn, will, most likely. “squeeze out” the small and medium American business from its territory. We are talking, primarily, about the entrepreneurs, whose activity brings to China a great income and significant technological innovation. This, of course, and added that Beijing, like the rink, it will now be “rolled” on US interests almost worldwide, offering custom loans (extremely cheap), or buying more shares of the national companies (which China is already doing in Central Asia and Latin America). That is, will go active clamping of Americans on all fronts. In addition, China will try every way to squeeze the dollar out of circulation – at least bilateral. Can I call it a great trade war? No, because today, Chinese and American interests are so intertwined – both in production and in technology – that neither side is interested, say, in active opposition. So hardly we can expect economic warfare “in full”. That is not, for example, no sanctions policy toward China, as was the case with our country.

– Whether the impact of the deterioration in economic relations on political dialogue between the two countries?

– We must understand that even today, the Chinese are following a formula that sounds like “cold in politics – in the economy hot.” If we view the Chinese press, or perhaps the blogosphere, we can see that American policy has been so actively criticized. It has always been and continues. And the USA remain a negative element for the Chinese policy. While businessmen from China want to trade with the Americans to develop economic relations. Therefore, the United States will long remain the major trading partner for China. Now the trade turnover between the two countries is about $ 600 billion. This compares with a turnover between China and Europe, and almost ten times more than the same indicator in the relations with Russia. And we must understand that relations in the political sphere will be constantly at the level of the pick, and mutual criticism. And the economy they will just change its nature, but no more.


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