Foreign Ministry spokesman Hua Chunying said on the 17th that the US behavior is typical of unilateralism and naked economic hegemony. If the US is willful and continues to move against the trend, we will be ready to stand up and resolutely brighten the sword and win the battle of multilateralism and free trade.
Compared with the savage and gunpowder flavor at the beginning of the month, the Sino-US trade war showed signs of easing as early as last week.
China’s position at the Boao Forum became an obvious turning point. After that, China also announced a series of tangible open policies.
The "step" given by China, the United States also successfully found, Trump then stated: "I will not call it a trade war, because this is really a trade negotiation."
Trump also said that if China is willing to open its market to US products further, the two countries will be able to avoid trade wars.
Therefore, from the current situation, the two sides previously claimed to levy tariffs, and raised the total amount, mainly to win more chips at the negotiating table.
At present, according to the Ministry of Commerce, "Chinese and US financial officials have not conducted any negotiations on economic and trade frictions." However, judging from the attitude of the two sides last week, China and the United States have now begun to create an "ambience" for each other to prepare for the negotiations.
Recently, many people are arguing that if the trade war is really open, it is China that is hurt more or the United States. In fact, it does not make sense to argue. If the trade war is really open, no one will be the final winner. There will be a situation of "killing 10,000 and self-damaging three thousand."
Therefore, the individual believes that China’s position made last week is the most correct way for a responsible big country to handle trade disputes, first posing and taking the initiative.
This statement shows that we have a clear understanding of this trade war, resisted the pressure of domestic special interest groups and narrow nationalism, and made pragmatic choices.
The specific policies that China has subsequently launched include:
1, will significantly reduce the import tariffs on automobiles, while reducing the import tariffs on some other products.
2. Eliminate the restrictions on the proportion of foreign ownership of banks and financial asset management companies, and treat domestic and foreign investors equally; allow foreign banks to set up branches and sub-branches simultaneously in China;
3. The upper limit of the foreign shareholding ratio of securities companies, fund management companies, futures companies and personal insurance companies will be relaxed to 51%, and no restrictions will be imposed after three years;
4. It is no longer required that at least one domestic shareholder of a joint venture securities company is a securities company;
5. To further improve the interconnection mechanism of the stock market between the Mainland and Hong Kong, the daily quota for interconnection will be quadrupled from May 1;
6. Allow qualified foreign investors to come to China to operate insurance agency business and insurance assessment business.
7. To liberalize the business scope of foreign-invested insurance brokerage companies, which is consistent with Chinese-funded institutions.
The previous opening policy also includes: encouraging the introduction of foreign investment in the banking and financial sectors such as trust, financial leasing, auto finance, currency brokerage, consumer finance, etc., and significantly expanding the scope of foreign-funded banking business. “Huluntong” is expected to open this year. .
China has shown the world its "more openness" sincerity, and the US has also responded positively. Trump said on Twitter on April 10: "I am very grateful to President Xi Jinping for his kind words in terms of tariffs and reduction of import barriers for automobiles... and his position on intellectual property and technology transfer is also very instructive."
More importantly, the US business community does not want the Sino-US trade war to really start. Boeing said at the 2018 Asian Business Aviation Conference and Exhibition (ABACE), "We as a company support the two governments' active and friendly consultations. This is the only thing we can do as a company."
Therefore, the atmosphere of trade friction between the two sides has eased a lot. The United States is also very clear that the trade war will start and the US economy will suffer a lot.
However, why was Trump so strong against China before? Made China have to be tit for tat.
Analysts believe that this is inseparable from the changes in American domestic politics. Behind the trade war, the Republican Party turned into a supporter of trade protectionism. The change in the electorate base is the root cause of the Republican Party's transformation.
According to CNN's statistics in September last year, Trump's party support rate has been stable at around 85% for a long time, more than 82% of Vice President Burns and 66% of House Speaker Ryan.
According to a survey conducted by the Pew Center in 2016, the influence of Trump, the Republican and the Republican Party’s intermediate voters, on the recognition of free trade, fell sharply during the election period, from 56% in 2015 to election voting. The former 29%.
After the election, up to 85% of Republican voters firmly believe that free trade has ruined jobs in the United States. In the same period, this figure only accounted for 54% of Democratic voters.
According to a recent statistics from Quinnipiac University, 58% of Republican voters support increased tariffs, which brings legitimacy to Trump's trade war.
Therefore, Trump can understand the tough performance in the previous trade war, and he hopes to get more benefits from China to win higher support.
According to researchers' estimates, between 2000 and 2007, because of China's import competition, the United States lost 980,000 manufacturing jobs. It is these ordinary American blue-collar workers who sent Trump to the White House.
Therefore, for Trump, the "propaganda" effect of the trade war is greater than the tariff on China's $150 billion commodity. His political foundation is not a multinational enterprise, but a blue-collar worker.
In fact, Trump, who was the presidential candidate in 2016, has always regarded foreign trade as one of the main campaign guidelines, and threatened to impose a 45% tariff on all imports of China and to define China as a “currency manipulator”.
After being elected in 2017, Trump took the tax reform and medical reform as the policy priorities, and the foreign trade problem was second to none.
In April 2017, China’s high-level visit to the United States, an important consensus reached by Sino-US trade is to launch a “100-day trade dialogue”. At that time, China and the United States entered the honeymoon period, and the United States finally did not label China as a “currency operating country”.
In November 2017, Trump visited China. US Trade Representative Robert Wright Heze showed a tough attitude on trade intellectual property issues, and nationalism took the upper hand.
Later, trade frictions between China and the United States continued.
In January of this year, Trump imposed tariffs on solar panels and washing machines through the 201 Act, mainly targeting China. China counterattacked and announced an anti-dumping investigation against US sorghum imports.
In March, Trump ordered the imposition of tariffs on all US-imported steel and aluminum under the 232 Act on the grounds of national security. China threatened to impose retaliatory tariffs on US pork, dried fruit and other imports.
From the end of March to the beginning of April, Trump announced a survey on China's intellectual property issues based on the 301 bill, and is preparing to impose a 25% tariff on Chinese imports of $50 billion. China immediately countered and announced that it was prepared to impose tariffs on the equivalent US imports.
Later, Trump poured oil on the fire and threatened to impose tariffs on another $100 billion of Chinese imports. China counterattacks: "The new comprehensive response measures must be adopted."
It can be seen from the above that there are not many trade sanctions actually implemented by the two sides. The new tariffs that the United States has implemented are only 201 solar panels and washing machines and 232 steel aluminum tariffs.
Therefore, the two sides are still in the stage of war of words. Both China and the United States may understand that "the two sides are both good and the other is hurt."
The following is a trade chart between China and the United States in the past decade. Although the trade friction between the two sides is constant, the trade volume is growing consistently.
The main purpose of the US trade war against China is to hope that China can reduce its trade surplus. In 2007, China’s surplus to the US was 163.285 billion US dollars, and in 2016 it rose to 250.825 billion US dollars.
However, do not think that these huge trade surpluses are cheaper for China. The picture below shows the export situation of foreign-invested enterprises in the past decade.
In the past decade, foreign-invested enterprises' exports have been accounting for about 50% of China's total exports, but they have started to decline since 2012, which is mainly related to the rise of local brands.
In addition, if the total amount of exports from foreign-invested enterprises is seen, it has been rising from 2007 to 2014, but it has declined in 2015 and 2016.
"People's Daily" previously reported that, taking the iPhone Χ as an example, China (excluding Taiwan) provides coil modules, RF antennas, and appearance parts for wireless charging receivers.
Calculated, China's value in the entire manufacturing process is about 55 US dollars, including the 3 dollars of wages earned by the hard work of Chinese workers. With the iPhone Χ priced at US$999 in the United States, China can only earn about 1/20 of the money for each sale.
Therefore, in today's close relationship with global trade, the economies of various countries have long been "you have me, I have you in it", and the trade war will definitely not hurt the other side and make yourself unharmed.
In the 1990s, China’s economic strength was not strong. The US’s use of Section 301 was mainly to increase the number of chips in trade negotiations with China.
Later, after consultations between the two sides, trade disputes often ended with an agreement signed by both parties. These agreements may be specific to a particular area and have a relatively limited economic impact.
Now, the two sides have reached a historical node, how will the Sino-US trade war end?
In a recently released report, Haitong Securities predicted that there are three ways to close the Sino-US trade war:
Possibility 1: The two sides negotiated and settled
China and the United States used the proposed tax collection list for 15 days and the 30-day public notice period to negotiate their respective demands and reach a preliminary agreement. Trump's punitive tariffs for $60 billion of goods were not implemented.
If Trump’s most important appeal is to narrow the US deficit with China, there are two ways. One is to expand China’s trade imports with the United States, and the other is to narrow China’s trade exports to the United States.
From the current situation, China is more likely to expand its imports to the United States. We have said on different occasions: "I don't want to pursue a trade surplus and hope to expand imports."
As far as the results of historical negotiations are concerned, China's easily accepted conditions may lie in liberalizing access to some service markets and increasing imports of US goods. The liberalization of the financial industry is now an example.
On the whole, if we can negotiate and reconcile, the impact of this trade friction on Sino-US trade and economy is relatively small.
Possibility 2: Punitive tariffs are implemented in whole or in part
Punitive tariffs will still be implemented, but both sides have made concessions after negotiation. In this case, the two sides will each be able to make one step, but the punitive tariffs on technology products will still be partially implemented.
At a tariff rate of 25%, if the United States levies taxes on 60 billion, 50 billion, 30 billion, and 10 billion US dollars of imported goods, China’s exports to the United States will fall by 13.2 billion, 11 billion, and 6.6 billion, respectively. US dollars, 2.2 billion US dollars.
In 2017, China’s total export volume was US$2,260 billion, and the impact of punitive tariffs on Chinese exports was 0.58%, 0.49%, 0.29%, and 0.10%, respectively.
In the same way, the impact on exports is 0.32%, 0.27%, 0.16% and 0.05%, respectively, when the tax rate drops to 15%.
Possibility 3: Conflict escalation leads to the spread of tariff objects
The trade conflict escalated. The United States not only levies taxes on the currently mentioned $60 billion in goods, but also extends tariffs to all Chinese exports. China will face a situation similar to that of Japan at the time.
However, China will not show weakness. According to China’s principle of revenge of “equal scale, equal amount, and equal strength”, China may tax US$150 billion in imported goods, and US exports to China will be around US$150 billion a year.
Therefore, if the trade war starts, no one can afford to be cheap. We hope to control the edge of the trade war within the first limit. (Source: Tiger Sniffing Network)
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