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July 7, 2018 | 05:42 | FOCUS News Agency
What are the churns that China has in the coming trade war with the United States, writes in an badysis AFP . The first shots were fired in a trade war between China and the United States, which experts say could hurt the global economy.
Two superpowers have imposed billions of dollars on cross-border trade
While US President Donald Trump has rejected warnings that a trade dispute with powerful partners such as China could harm the United States, Beijing has other weapons in the arsenal, in addition to homework of the United States
] Tom Cruise's movies, Starbucks, Iphone X and Buick are widely sold in China, and authorities can find a variety of ways to make life difficult for them, says Luis Kyuze, an badyst with Oxford Economics
China has fewer reservations regarding tariffs, but history shows that there are a number of other measures that could be taken to cause the pain of US companies, said Kyuiz
.
He says "improving health, insurance and tax controls, slowing US imports and boycotting US products".
Chinese port authorities have already begun to inspect pork and American cars, causing serious delays.
Boycott Bike
General Motors sells more cars in China than the United States – and many other US brands now earn much of the revenue of the fast-growing Chinese market
China could tie the hands of these companies with bureaucracy or promote an effective boycott of Chinese consumers, experts say
Mark Williams, chief economist of Asia at Capital Economics, said Beijing could hold a "propaganda campaign to allow authorities to stay out of disruptions in sales."
"In the past, they have been efficient and fast," said Williams, noting that such campaigns against South Korea and Japan during political tensions have resulted in a 50 percent reduction in car sales in these countries. in a month. "
Last year, Chinese consumers suddenly turned against South Korean retailer Lotte, who had been forced to close three quarters of its stores in China after obtaining land for deploying a US missile defense shield against which Beijing Opposes
19659007] China could start limiting the number of dollars spent and its 350,000 students going to the United States each year, which will have a big impact on the US market
"China's travel and education expenses in the United States are similar to those of soybeans and US planes, the two largest in terms of sales," Williams said.
China has already restricted tourist groups to put pressure on Taiwan and South Korea, the expert noted.
But he adds, "China may think that US universities have limited influence over the Trump administration and limiting the number of students could undermine efforts to improve China's technical and scientific capabilities."
Refusal of a plane Boeing sells a quarter of its planes in China, the world's second largest market, and the American aerospace giant has been closely watched by its European rival Airbus
This could be another point of pressure, as most Chinese airlines are under state control whose orders are strictly regulated by Beijing
Although orders are scheduled for the next five years, the government-controlled Global Times newspaper has already issued a warning that Beijing could "adjust sales volume."
Debt and FX
With its huge foreign exchange reserves, China holds $ 1.2 billion in US Treasury bonds, and employees report slowing or stopping their purchases
While some believe that it is a significant currency of exchange, it is a two-pointed sword for Beijing because the dumping of bonds would cause serious losses to the Chinese economy
Another weapon available to Beijing is a strictly controlled yuan by the central bank, which can be depreciated to support exporters
But again, this can have a retroactive effect, as it can cause a major capital flight from China.
Julian Evans-Pritchard of Capital Economics said: "While a weaker currency may offset some of the economic damage caused by US tariffs, the increased risks to financial stability are not worth it. "
Cooperation with Korea .
If the economic weapon does not work, Beijing can turn to politics. Donald Trump relies heavily on Chinese cooperation to curb North Korea's nuclear ambitions, particularly with respect to maintaining sanctions
Trump can suddenly find China less cooperative with this explosive issue if the trade war is generalized.
[19659906] Julian Markov
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