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If China has warned that it will be forced to retaliate, its response is becoming more complicated. Simply because China imports only $ 130 billion worth of US goods a year, which is four times less than the $ 506 billion worth of Chinese goods imported into the United States, and Donald Trump does not rule out overpaying in full. .
Beijing will therefore have to find other ammunition than the simple customs to retaliate against Washington. On June 19, the Chinese regime evoked a combination of "quantitative" and "qualitative" measures. Reviewing weapons at the hands of Beijing
· Complicating the life of US subsidiaries
General Motors, Apple, Starbucks … US companies are mbadively present in China and fear of being inflicted a whole series of retaliation measures, whether through an upsurge in health, environmental, security or even lengthy regulatory procedures, or the organization of boycotts.
The stakes are huge: General Motors sells more cars in China than in the United States and Apple has generated $ 48 billion in sales in China in 2016, especially with the iPhone. Merchandise sales by US subsidiaries in China amounted to $ 172 billion in 2015, more than the amount of imported goods according to a Deutsche Bank study.
China has already played the card of economic patriotism in the past. Conscious by consumers and targeted by various regulatory measures, the South Korean Lotte had to close, last year, three quarters of its stores in China, after providing Seoul with a ground for the deployment of a US missile defense shield. Thaad.
· Promoting US Competitors
"China could try to strengthen its relations with the European Union and other countries, to compensate for the damage caused by the trade war with the United States" say badysts at Deutsche Bank.
While a China-EU summit is being held in Beijing on Monday, the communist regime is said to have proposed an alliance between the two main blocs, defended a joint WTO procedure and offered to open up the Chinese market further as a sign of good will. An offer rejected by the EU.
The conflict with Washington could also lead to more free trade agreements and strategic partnerships with Asian markets such as Japan, South Korea and ASEAN, note Euler Hermes badysts. China could also open part of its services sector to other countries rather than to the United States.
· Limiting Chinese travel
Beijing could try to limit the number of tourists and students traveling to the United States. A measure that, if it were to be applied, would have a significant impact.
The Chinese spend 30 billion dollars a year on their trips to the United States (including accommodation, shopping, education expenses, etc.). And with a cohort of 350,000 students last year, Chinese make up one-third of foreign students. Again, South Korea had to suffer the effects of such measures in 2017. For several months, orders were given to tourism agencies to boycott this destination. The number of Chinese visitors has fallen by more than 40% in some months, strongly penalizing duty-free shops in South Korea.
· Devaluing the yuan
Is China the "invisible hand" behind the recent decline Renminbi (RMB) to support the competitiveness of its export enterprises? This scenario is dismissed by many badysts, who attribute further this depreciation to market concerns over trade tensions and the slowdown in the Chinese economy.
The Chinese central bank (PBOC), on the contrary, has hinted that it could intervene to curb the fall of the yuan if it were to accelerate. "A sharp depreciation of the RMB would be unfavorable for China: it would push the Chinese to export capital and reduce the purchasing power of consumers" estimates Patrick Artus at Natixis. According to Morgan Stanley badysts, the Chinese authorities still have in mind the effects of the devaluation of 2015, which had led to significant capital outflows from the country. The PBOC could therefore "intensify its interventions if the risks of depreciation increase" .
· Sell the US debt
With a stock of more than 1,000 billion dollars of debt issued by United States, China has a powerful weapon against Donald Trump. The subject worries the markets, as their reaction at the beginning of the year shows, when Bloomberg said that Chinese officials were talking about reducing or stopping purchases of US bonds.
But China can not shoot itself in the foot either by dropping the value of badets in its coffers and, above all, by pushing the dollar lower against the yuan. For Euler Hermes, there will be "threats and volatility but no major resale" . For the Deutsche Bank, the weapon of a mbadive sale of the American debt is the least probable of all those evoked.
Frédéric Schaeffer
Corresponding to Beijing
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