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China imports almost four times less than it exports to the United States. It must therefore find other weapons than simple customs to penalize the economy of Uncle Sam, when the first two world economic powers switch to trade war.
– Penalize companies – [19659002] The iPhone X, the Buick Excelle, Starbucks and Hollywood Productions are among the best sellers in China – all potential means of pressure.
"Beijing has limited weapons in terms of retaliation, but may impose various other measures on US companies operating in China, by tightening sanitary, security and fiscal controls, delaying imports, or by organizing a boycott ", insists Louis Kuijs, an Oxford Economics analyst. [19659002] Since May, pork and US automobiles are already in the sights of Chinese customs who have announced a reinforcement of inspections.
– Boyco tt –
Many American companies depend on China, like General Motors, which sells more cars in China than in North America. Beijing could complicate their sales by attacking their image.
"This may just be a propaganda campaign, it has been effective and fast in the past," said Mark Williams of Capital Economics. The campaigns against Japan in 2012 or against South Korea last year "have led to a 50% collapse of sales for the car brands of these two countries in the space of a month," recalls the analyst
Laughed by Chinese consumers and targeted by various regulatory measures, South Korean distributor Lotte had to close three quarters of its stores in China after providing Seoul with land for the deployment of a US missile defense shield, to the chagrin of Beijing
– Students and tourists –
Beijing may be trying to limit the number of tourists and students traveling to the US
With 350,000 Chinese students last year , a third of foreign students, "the cumulative amount of Chinese spending on education and tourism in the United States is equivalent to that of Chinese imports of soybeans or American planes", summarizes Mark Williams.
Boeing –
China, the world's second-largest aerospace market, is capital to Boeing, which sells a quarter of its planes on an equal footing with Airbus.
But the bulk of Chinese airlines are under public control and their orders are driven closely by Beijing . The official Global Times newspaper did not make a mistake, assuring in January: "China could adjust the volume of its purchases of Boeing and Airbus aircraft". And even if the Chinese orders in progress provide for deliveries lasting at least five years.
– American debt –
With its huge foreign exchange reserves, China is the main holder of US debt (about $ 1.2 trillion). The Bloomberg agency reported in January that Chinese officials had recommended slowing or suspending the acquisition of US treasury bills.
But the exercise would be difficult for Beijing, because any destabilization of the markets could undermine the value of the coupons. Treasury and dollars still in its possession … and few alternative assets to turn to.
– Devaluation of the yuan –
Has the Chinese central bank orchestrated the recent slide of the yuan in order to to support exporting firms? This scenario is dismissed by many analysts, who attribute this depreciation to a simple pressure from the markets, natural in the face of trade tensions.
According to them, the central bank could on the contrary intervene to curb the fall of the yuan if it had to accelerate. A prolonged decline in the yuan could cause large capital flows out of the country, which the authorities are determined to prevent: "The risks of financial stability as a whole in case of devaluation are not worth it" , says Julian Evans-Pritchard, of Capital Economics.
– The North Korean file –
China-US cooperation on North Korea could be complicated: in its quest for denuclearization from North Korea, Donald Trump needs the support of China, Pyongyang's main economic backer. But a trade war could push Beijing to be less cooperative.
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