Beijing Wants to Fight! Chinese Refuse to Back Down in Trade War With US; Double Down
And now, the Chinese view on the trade war started by America. Beijing is not going to give in. Moreover, it intends to win.
Anastasia Sakhovskaya with the details from Beijing.
The Orientalism of these Western silhouettes; Let the world fall in love with China is the motto of the Beijing fashion week. This week, Trump's been running true to form again: During the negotiations on negotiations, he announced a new set of tariffs. China's mirror-like response came quickly: More than 5,000 goods, including various commodities, are on its response-list.
US tariffs could backfire onto American consumers because China is dressing the USA. 40% of all imported clothes come from here as well as 2/3rds of shoes, and 75% of accessories. The tariffs will only send the prices soaring or even break the production chains. The echo of war has reached even fashion magazines that write about a «bag battle.» Apart from them, the American list has yarn, while the Chinese one has textiles. However, that's unlikely to reshape the plans of Beijing designers.
Sun Gaoyang, designer: «My materials are half Chinese and half imported, usually Italian or Spanish. My works are primarily designed for Eastern women. I know their silhouette and favorite styles well».
The Belt and Road Initiative will lead the textile factories to new clients. They are already looking for new clients in Europe, Singapore, and the Far East. Diversifying the markets and stimulating domestic demand are the goals of the economic reforms China is currently adopting making the economy more market-like, flexible, and open. The tariffs will have an impact on Chinese GDP, but it's a minor one so far. According to Bloomberg analysts, the previously adopted tariffs might decrease growth by 0.2% and those adopted tomorrow — by 0.5% Right now, this is the largest set of tariffs, which comprises 50% of Chinese exports to the US. If the US imposes a 100% tariff, then the economy might slow down by 1.5%. The forecasts of the Chinese experts are twice as optimistic: «The situation is stable.» The US analysts estimate a 0.7% decrease at this level of escalation. However, farmers have already lost up to $6 billion while the agricultural industry as a whole has lost up to $14 billion.
You Bayi, Americanologist: «American consumers will suffer because the $200 billion tariffs will apply to commodities. The incomes of the US middle class are already decreasing and if the States dare to review production changes they'll place themselves under public pressure, especially during the elections».
The pressure is rising in the US gas sector as well. China added the American LNG to its 10% tariff blacklist hitting where it hurts because the US dreams of becoming an energy superpower. Next year, China will become the largest buyer of LNG in the world but the US is cutting off its own air supply. Gas exports to China have already decreased from 500,000 to 130,000 tons. The oil companies that have been planning to build new terminals along the East Coast could lose billions 100,000,000 ton-projects are at risk. Meanwhile, Trump is trying to push his LNG in Europe.
Another move by Beijing — the search for new investment assets. The main holder of US government debt decreased its investments by $8 billion and increased its forex reserves.
China is steady on its course and there will be no devaluation. Despite the fact that when the first signs of the trade clash appeared in March the national currency depreciated against the dollar by 8% and since then, the yearly minimum has been updated several times. Both the Chinese Central Bank and the Ministry of Commerce have repeatedly said that the rate is formed by the market and the yuan wouldn't be used as a weapon in the trade war.
Still, experts view the sale of securities not only as effective financial leverage but as an attempt to reduce the influence of the dollar. China has repeatedly stated its desire to switch to national currency payments with several countries. In Russia, the integration process has been initiated. It'll minimize the adverse effect of the sanctions and the depreciation of yuan. Goods will remain competitive.
Yu Yongding, social scientist: «China must pursue a flexible economic policy and allow the yuan to float. The market is mature. Even if the psychological barrier of ¥7 for $1 gets broken it won't hurt us that much».
The US has started to bargain in politics in a categorical way. They are bothered by the artificial islands in the South China Sea where Beijing has built military bases and repels all American attacks without much ado. It's Chinese territory so the government can place whatever it wants there. Now, the US has imposed sanctions for purchasing weapons from Russia «publicly trampling all principles of foreign relations» as the Chinese Defense Ministry called it.
Instead of severing ties, China is going to develop them. The partnership of Russia with its natural resources and China with its industrial prowess would inevitably come as a big challenge to the West writes the Chinese press. The Chinese Foreign Ministry summoned American diplomats. Ambassador Gary Locke was reprimanded and the American Defense Attache was criticized.
Geng Shuang, Foreign Ministry Spokesperson: «We urge America to correct its mistakes and cancel the so-called sanctions. Otherwise, the States will have to answer for their actions».
The US also lose real money in the virtual world. The company Alibaba was planning to allow American farmers to sell produce in their online store, one of the most popular in the world. Jack Ma personally promised Trump to create a million new jobs. Now, he believes he can't deliver on his promise.
Jack Ma, CEO of Alibaba Group: «The trade clash will affect many small and medium-sized businesses. But I believe that in these hard times, those who use new ideas and technologies will ultimately win».
Jack Ma told China to prepare for a long trade war. The visit by the Chinese Navy Commander to the US as well as the meeting of the Joint Staff of the Armed Forces have been canceled. The latter one was supposed to take place in Beijing next week.
Anastasia Sakhovskaya, Mikhail Artyukhin, Vesti: News of the Week, Beijing, China.