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> Officials are also taking concrete steps to shift China’s dependence on the United States for certain goods. They have focused efforts on new trade partnershi

> Officials are also taking concrete steps to shift China’s dependence on the United States for certain goods. They have focused efforts on new trade partnerships with countries like Japan and South Korea and lowered trade barriers for other countries. They have also struck deals to import agricultural goods from countries other than the United States. This week, China approved barley imports from Russia. this is where i expect steve bannon’s idea of favoring bilateral deals instead of large trade blocks (ASEAN, TPP etc) to backfire in the end china will probably just find other ways to adjust and world economy starts splintering (personally, i was no fan of tpp because of the non-democratic arbitration clauses, but i also think bringing the world together under harmonious and consistent trade relations is extremely important for peace and stability)

H8crilA 7y ago
How many things are as good for world's prosperity than low or no tariffs? That's only beaten by lack of armed conflicts. Wishful thinking, but still true.
- nine_k 7y ago
  Tariffs are a way to force local businesses to produce something that's more cheaply available elsewhere. Usually it's exactly in an anticipation of a conflict (even armed) which would sever vital supplies of that stuff. Open markets work best when there is a common peaceful order, and an enforcer of it. US used to be, and largely continues to be such an enforcer, but not in the China's area of influence.
- toyg 7y ago
  Free and abundant healthcare and education trump anything commerce-related, in my book. You can argue trade can help in those areas too, but strictly speaking it’s not a prerequisite (often it’s even a problem).
Fjolsvith 7y ago
Where will China get the money to buy their agricultural goods? Their food prices jumped 7.7% in June, likely caused by the outbreak of the African swine fever in the country’s pig herd [1]. China has some serious pressure being applied to them, and no wiggle room. 1. https://www.counterpunch.org/2019/07/19/china-and-the-swine-flu-outbreak/ https://www.counterpunch.org/2019/07/19/china-and-the-swine-...
- tareqak 7y ago
  China can start selling their U.S. treasury bonds, no?
  - khuey 7y ago
    That would raise the value of their currency and make their exports less competitive.
    - tareqak 7y ago
      It would, but China might be close to the point where it wants to start to transition to a more service-based economy. In that case, they can use the stronger currency to buy the resources they require and establish favourable trade agreements with nations other than the United States.
    - Fjolsvith 7y ago
      It would literally reduce the trade deficit between the US and China: "But Trump’s obsession with interest rates stems from a larger concern — boosting economic growth. He only wants the Fed to lower rates so U.S. banks will put some of their $1.4 trillion in reserves to work in the economy. A huge sale of U.S. Treasuries by China would have a similar effect: As interest rates on Treasuries began to rise, banks would use some of their reserves to buy more Treasuries. That spending would put more cash into the wider U.S. economy and stimulate growth. There is a second, somewhat related, effect of a sale of Chinese bonds: It would drive down the value of the dollar. When China sells U.S. bonds, it receives dollars in exchange. The Chinese could use those dollars to buy other U.S. assets, but the whole point of selling Treasuries is for China to divest from all U.S. assets. That means the Chinese would need to exchange their dollars for some other currency — euros, pounds or even the yuan. Putting so many dollars on the foreign-exchange market would weaken the value of the dollar. The effect would be to drive up the price of foreign imports for U.S. consumers and drive down the price of U.S. exports." [1] 1. https://www.bloomberg.com/opinion/articles/2019-05-13/u-s-china-trade-war-how-a-china-bond-selloff-will-help-trump https://www.bloomberg.com/opinion/articles/2019-05-13/u-s-ch...
xmly 7y ago
The world will be divided into two parts for sure, one is for China market and one is for US market. People already started to prepare for this. G2 and Beyond: Foxconn founder sees 'one world, two systems' leadership framework forming https://www.digitimes.com/news/a20190624PD205.html https://www.digitimes.com/news/a20190624PD205.html
hangonhn 7y ago
Agreed. It plays right into China's hands because very, very few nations have the size to deal with China. Smaller countries need to band together to negotiate with China as a group. China's foreign policy has always favored bilateral deals rather than dealing with groups of countries because their scale favors them. I feel the same as you about the TPP. The implementation might not have been great but the idea was good. We need to band together with our smaller allies to negotiate effectively with China.

H8crilA 7y ago

How many things are as good for world's prosperity than low or no tariffs? That's only beaten by lack of armed conflicts. Wishful thinking, but still true.

nine_k 7y ago
Tariffs are a way to force local businesses to produce something that's more cheaply available elsewhere. Usually it's exactly in an anticipation of a conflict (even armed) which would sever vital supplies of that stuff. Open markets work best when there is a common peaceful order, and an enforcer of it. US used to be, and largely continues to be such an enforcer, but not in the China's area of influence.
toyg 7y ago
Free and abundant healthcare and education trump anything commerce-related, in my book. You can argue trade can help in those areas too, but strictly speaking it’s not a prerequisite (often it’s even a problem).

Fjolsvith 7y ago

Where will China get the money to buy their agricultural goods? Their food prices jumped 7.7% in June, likely caused by the outbreak of the African swine fever in the country’s pig herd [1]. China has some serious pressure being applied to them, and no wiggle room. 1. https://www.counterpunch.org/2019/07/19/china-and-the-swine-flu-outbreak/ https://www.counterpunch.org/2019/07/19/china-and-the-swine-...

tareqak 7y ago
China can start selling their U.S. treasury bonds, no?
- khuey 7y ago
  That would raise the value of their currency and make their exports less competitive.
  - tareqak 7y ago
    It would, but China might be close to the point where it wants to start to transition to a more service-based economy. In that case, they can use the stronger currency to buy the resources they require and establish favourable trade agreements with nations other than the United States.
  - Fjolsvith 7y ago
    It would literally reduce the trade deficit between the US and China: "But Trump’s obsession with interest rates stems from a larger concern — boosting economic growth. He only wants the Fed to lower rates so U.S. banks will put some of their $1.4 trillion in reserves to work in the economy. A huge sale of U.S. Treasuries by China would have a similar effect: As interest rates on Treasuries began to rise, banks would use some of their reserves to buy more Treasuries. That spending would put more cash into the wider U.S. economy and stimulate growth. There is a second, somewhat related, effect of a sale of Chinese bonds: It would drive down the value of the dollar. When China sells U.S. bonds, it receives dollars in exchange. The Chinese could use those dollars to buy other U.S. assets, but the whole point of selling Treasuries is for China to divest from all U.S. assets. That means the Chinese would need to exchange their dollars for some other currency — euros, pounds or even the yuan. Putting so many dollars on the foreign-exchange market would weaken the value of the dollar. The effect would be to drive up the price of foreign imports for U.S. consumers and drive down the price of U.S. exports." [1] 1. https://www.bloomberg.com/opinion/articles/2019-05-13/u-s-china-trade-war-how-a-china-bond-selloff-will-help-trump https://www.bloomberg.com/opinion/articles/2019-05-13/u-s-ch...

xmly 7y ago

The world will be divided into two parts for sure, one is for China market and one is for US market. People already started to prepare for this. G2 and Beyond: Foxconn founder sees 'one world, two systems' leadership framework forming https://www.digitimes.com/news/a20190624PD205.html https://www.digitimes.com/news/a20190624PD205.html

hangonhn 7y ago

Agreed. It plays right into China's hands because very, very few nations have the size to deal with China. Smaller countries need to band together to negotiate with China as a group. China's foreign policy has always favored bilateral deals rather than dealing with groups of countries because their scale favors them. I feel the same as you about the TPP. The implementation might not have been great but the idea was good. We need to band together with our smaller allies to negotiate effectively with China.