It appears no one bothered to hand the figures to Foreign Minister Wang Yi when he warned the United States of the dangers of a trade war with China. Just hours after his press conference on the sidelines of the National People’s Congress in Beijing, the world’s second-largest economy announced its February trade numbers with exports to the US jumping 46.1% from a year earlier.
As far as timing was concerned, it could not have come at a worse moment. Relations between Beijing and Washington have entered a decidedly frosty period with US President Donald Trump ready to roll out stiff tariffs on steel and aluminum imports.
Naturally, China has fired back with a warning salvo. “Given today’s globalization, choosing a trade war is a mistaken prescription,” Wang told the media as China’s de facto parliament, which is known as a rubber-stamp legislature, sat in the Great Hall of the People.
“The outcome will only be harmful [and] China would have to make a justified and necessary response,” he added.
In the weeks ahead, the Trump administration plans to issue a report on China’s intellectual property practices, which is expected to trigger further tariffs on a wider range of Chinese imports.
“The US is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!” President Trump tweeted hours before Wang’s comments.
He also took to Twitter to point out that the US had asked China to “develop a plan for the year of a One Billion Dollar reduction in their massive trade deficit with the United States.”
“We look forward to seeing what ideas they come back with. We must act soon!” Trump said.
Still, the amount is a drop in the Pacific ocean, which divides the two nations, when compared with the record $375.2 billion trade deficit the US racked up with China last year.
In February, the surplus with the US stood at $21 billion, official data from China’s General Administration of Customs showed, more than double the $10.4 billion reported during the same period last year.
“The bigger picture is that while China’s trade surplus with most of the world has declined during the past year … its surplus with the US has continued to expand,” Julian Evans-Pritchard, the China Economist at Capital Economics, said in a note.
Overall, the country’s exports unexpectedly surged last month at the fastest pace in three years, which suggested economic growth remains resilient.
Data showed that exports increased by 44.5% from a year earlier, compared with analysts’ median forecast for a 13.6% rise, and an 11.1% increase in January.
Imports grew 6.3%, missing analysts’ forecast for 9.7% growth, and down from a sharper-than-expected 36.9% jump in January.
But analysts cautioned that these figures could have been heavily distorted by the timing of the Lunar New Year holiday. It fell during February this year compared to January in 2017.
“Global demand remains robust and the economies of the US and Europe are expanding, that’s the biggest boost for Chinese exports,” Xia Le, the chief Asia economist at Banco Bilbao Vizcaya Argentaria in Hong Kong, told Bloomberg.
“The risk of a trade war in which Trump increases tariffs for a broader scope of products seems to be rising,” Xiao signed off on a cautious note.
– with Reuters and AFP
Art Laramee
The Chinese are therefore very insular and parochial and very introspective and reflective and contemplative because the focus is always on managing the Yin and Yang in the abstract to achieve harmony in the conflict that is the duality in all manner of things. To cut it short until you transcend the Ego or Pride or Arrogance that is embedded in the duality, subjectivity and relativity of the flux and flow and dynamics of life you will never get to see the harmony behind the chaos.
So the Chinese will not want to conquer anyone or be covetous of what others have or proselytise others to be Chinese, which by definition you cannot, like a non-Jew can never be a Jew! Religion and ideology and ‘ism’ are variants of an ‘Ego of a Self’. To be selfless requires religion or God and other egotistical viewpoints to be a private personal devotion or faith outside the public arena. What is allowed or appropriate is what is mutually common – and all these commonality of being Chinese are gleaned from the Three Pillars of Chinese Society.
You will be correct if you were to come to the conclusion that the Middle Kingdom (the land that the Chinese belong to, like Israel that the Jews belong to) would not have included Western Tibet or Sinkiang or Inner Mongolia or Manchuria had the Mongols and the Manchus not conquered China (Middle Kingdom) and ended up being Chinese or absorbed as Chinese (the eater became the eaten -becoming what they ate – imagine the Europeans after conquering America becoming Native Red Indians!).
Looks like I am running out of time! OK! U.S. is an economic fraud! Its Federal Reserve is a private banking cartel. Its government is not of the people but of the Illuminati, military and banking cartel. Its fiat money is not real as it is not corresponding backed by real gold! When the U.S. pays for its military expenditure (any country that spends its money mostly on warfare then on value-adding to domestic welfare and wellbeing of the people is a psychopath), its imports etc etc it is just issuing ‘fake money’. Any country that does not allow its citizens to own a chattel (personal goods) like gold is not a real democracy. And in contrast any country that allows its citizen to privately own land is creating inevitable Class division and thoroughly miss the understanding that all the land is the State and it is the People that belong to the land and not the land belonging to any individuals as if land were chattels. The Chinese people do not own the land but only have a right of use or occupation. That is why there is no land tax in China and that is why there are millions of empty new apartments – although the government might soon introduce a levy for people having an entitlement to use or occupy but is not using or occupying the land. When The State owns all the land there is no homelessness (but the strange problem of vacant homes!) and note this – nobody, no individual other than the State becomes rich simply out of capital land appreciation.
I have to rush. When China builds its public infrastructure the Government Central Bank (it is not a private cartel like the Federal Reserve) prints out yuan exactly to match equally the value-adding of capital assets to the State who (please be reminded) owns all the land and fixtures! When China gives foreign aid it actually sends its workers and materials overseas and hand over the complied project to the recipient country and only then bills that country exactly for goods actually received. The U.S. prints fiat money which goes into the pocket of the corrupt officials who sidetrack the money to womanising, building big palaces and spending on ostentatious lavish lifestyle. Since Chinese cannot own land the rich Chinese capitalist with many international trade transactions being done in $U.S. fiat money, which is useless currency as it is not legal tender in China, has no other choice but to buy properties and investments overseas, that really have no real meaning to them, particularly when on a daily basis you eat with chopsticks, do Taichi and Qigong and play Weiqi (Chinese Chess) and Mahjong and read write and speak Chinese etc. Sorry! No space and no time! Why don’t you spend three to six months just travelling the length and breath of China. See the evidence for yourself!
Vincent Cheok
Art Laramee
(Continued from before) You cannot expect an ‘orange’ like China to be an ‘apple’ like America. They are two different species under the equanimous ambivalent benevolent Sun. China is an old man and America is a young man. You cannot teach an old dog new tricks, OK, maybe you can, but it would have to be done very slowly. It will take ‘evolution’ and not a ‘revolution’! And that is what is meant by ‘Chinese characteristic’ from one perspective. But like all Chinese word it is polysemous and like a synecdoche or metaphor. It has many perspectives depending on the context it is used in. What is important to appreciate is that like a heart or organ transplant you must make sure that the recipient patient or body does not reject the donated organ and there is no outright immune rejection.
Thus whether China accepts a donor organ from the West like ‘Communism’ or ‘Democracy’ it must first be desensitised or modified or adapted or vaccinated to have ‘Chinese characteristics’ so that it would keep the living antiquity of the Chinese Civilisation intact and whole. I do not think I have to explain why Chinese Communism is not Western or Soviet Communism and that Chinese Capitalism is not Western Capitalism. So, to see the Communist Party as Communists is not seeing reality for what it is. The current ‘Emperor’ just happens to be called ‘Communist Party’. I have a friend with a surname ‘Crook’. I assure you that he is not a crook. I have another friend with a surname ‘Coward’. I assure you that he is not a coward!
Accordingly, ‘Chinese characteristics’ is an oblique reference to the Three Pillar of Chinese Society. There is nothing within these spiritual or humanistic philosophies about the rights of an individual or his freedom to do this and that. What you will find are teachings on mutual rights and responsibilities or in Chinese expression the Yin and Yang or the flow or cycle of life and the duality that is life, and thus Jing/De (Potency/Virtue) or Wei/Wu-Wei (Action/Inaction) or taking/giving. The Chinese would speak of ‘harmony’ where the West would speak of ‘peace’. The Chinese would speak of ‘compassion or loving-kindness’ where the West would speak of ‘love, mercy and forgiveness’. Therefore the difference in psyche and mindset – the Chinese when humiliated might tolerate or forget but will never forgive.
(To be continued)
Art Laramee,
You are asking the impossible! Unless you have studied or has been brought up in the Three Pillars of Chinese Society (Daoism, Confucianism, Zen) what I tell you would appear to be all goobledygook! It is like comparing apples and oranges! But I will give it a try in a few paragraphs when what is required is writing an encyclopaedia!
First a little background or setting. America is of a government of the people for the people by the people and the State belongs to the people and the individuals determine what it is by majority vote or consensus called ‘Democracy’.
With China as a State it is more ephemeral (something that the Jews will understand straight away) for it is a State to the Chinese people only because they have a sense of belonging to China (Middle Kingdom) and the government or the ‘Emperor also belongs or has the sense of belonging to China. Similar to how the Native Americans see themselves as not owning the land but that they belong to the land.
Without this understanding there is no way for a non-Chinese to understand the recent constitutional change in China and the phrase or expression of ‘Commitment Going Forward’ by President Xi in his very long speech – it was used in almost paragraph, about going forward into globalisation with confidence and being upright in ‘Chinese characteristics’, and to show the developing countries that they can do the same (but of course with their very own respective Native or indigenous or tribal characteristics). It is not about arrogant pride and ego and hegemony and having a superiority or supremacist complex but having mutual self-esteem and dignity and honour in what we are – different but equal – no shame or inferiority complex or having to be humiliated or be subservient.
Simply put – to each his own, there should be no hegemony of one race or tribe over another. Let an orange be an orange. But please note, religion and ideology and any sort of ‘ism’ has no relevance here.
So with China – the ‘Emperor’ which or who is now the ‘Communist Party’ or just imagine a Imperial dynasty called the Communist Dynasty – it does not matter for it is just the name of the ‘Emperor’. As long as the Emperor serves and humbles (the Taoist ‘Wei/Wu-Wei’) himself to the People (the Confucian ‘family unit’)and conversely the People humble themselves (the Confucian ‘filial piety) to the ‘Emperor’ there will be peace and harmony and the ‘Emperor’ still has the ‘Mandate of Heaven’ (the Zen ‘immutable law of karma’). In fact references were made in the President’s speech to LaoZi and Confucius.
(To be continued)
where is the wto, world bank and imf while Trump rants away?
Vince Cheok Thanks for explaining how China has managed a trade surplus with almost all pf its trading partners. Next you can explain how China has amassed such a fortune that it can lend money to so many countries while building massive infrasturcture projects and buying up half the world’s businesses and resources.
Godfree,
Yes, you are absolutely correct! The deficit in the balance of trade with China is only one side of the coin. Many of the goods exported to the U.S, and may I add, to other countries, are actually ‘American’ goods made in China. The only truth is that an American company is having its goods made in China and employing Chinese labour instead of the goods being made in U.S. with American employees. But that is what economics is about – doctrine of comparative advantage. Otherwise the goods would be too expensive to sell!
The ‘invisible’ funds that flow back to the U.S. when you look at the Balance of Payments would show that the ‘profits’ to the American owners from the sale of these ‘American’ good to the U.S. as well as to other 3rd countries may actually benefit the U.S., as if China was just the ‘sub-contractor’ on a building project.
In Balance of Payments terms, every year there should be a Balance in the totality of U.S. Payments out and Receipts in.
So all this Trump talk is another conspiratorial attempt to make China look like the Bogey Man as most people do not know accounting or Balance of Payments in International Trade and Capital Flows.
Shame on the U.S. government making insidious use of the common man’s lack of business knowledge. Trump is the main villain in fake news to fertilise his Cold War Agenda!
Vincent Cheok
Former Chairman of the Council of Economic Advisors, Harvard professor Martin Feldstein, says, “every student of economics knows or should know that the current account balance of each country is determined within its own borders and not by its trading partners.” Basic accounting principles tell us that the United States’ overall trade deficit is the result of a shortage in national savings relative to spending due to excessive government budget deficits and households consuming beyond their means. The countries that show up as being the source of the offsetting trade surpluses are coincidental. [End the currency manipulation debate. https://www.ft.com/content/527f9d0a-b97b-3cd1-9fd6-2c6e75f3824f
Besides, The value of China’s trade with the USA is less than 1% of Chinese GDP: Exports make up 18% of Chinese GDP. Exports to the US make up 18% of total exports and the retained value of those exports is about 18%.
The retained value is low because most Chinese exports are, in reality, re-exports containing a high percentage of American I.P. China retains less than 9% of the value of an exported iPhone, for example. Though the WTO records the nominal, wholesale, export value of an iPhone as $400, China’s retained share is about $30
The retained value of American exports to China, on the other hand, is 100% of nominal value because the U.S. owns 100% of their I.P. – from genetically modified seeds to CPUs and genome analyzers.
So trade between the two is roughly in balance, perhaps even favoring the USA.