the arsenal of reprisals from China

Commercial War: China's Retaliation Arsenal

China imports almost four times less than it exports to the United States. He 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 businesses – [19659005] The iPhone X, the Buick Excelle, Starbucks and Hollywood Productions are among the best sellers in China – so many potential pressure tactics.

"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 organizing a boycott, "says Louis Kuijs, an Oxford Economics analyst.

] Since May, pork and US automobiles are already in the sights of Chinese customs who have announced a reinforcement of inspections.

[1965] 9004] – Boycott –

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 could strive to limit the number of tourists and students traveling to the United States.

With 350,000 Chinese students l last year, one-third of foreign students, "the cumulative amount of Chinese spending on education and tourism in the US is equivalent to that of Chinese imports of soybeans or American planes", summarizes Mark Williams.

[19659004] – Boeing –

China, the world's second-largest aerospace market, is capital to Boeing, which sells a quarter of its aircraft, on par with Airbus.

But the bulk of Chinese airlines are under control public and their orders 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 current Chinese orders provide for deliveries spanning at least five years.

– American debt –

With its huge foreign exchange reserves, China is the main holder of debt US $ 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.

– Devalue the yuan –

China's central bank orchestrated the recent slide of the yuan to support exporting firms? This scenario is dismissed by many analysts, who attribute this depreciation to a simple market pressure, natural in the face of trade tensions.

According to them, the central bank could instead intervene to curb the fall of the yuan if it was 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" , comments Julian Evans-Pritchard, of Capital Economics.

– The North Korean file –

The cooperation between China and the United States on North Korea could be complicated: in its search for North Korea's denuclearization, Donald Trump needs the support of China, Pyongyang's main economic backer. But a trade war could push Beijing to be less cooperative.

(© AFP / 07 July 2018 08h02)