Trade war, day seven: China’s strategy comes into focus | Politics News | SupChina

Trade war, day seven: China’s strategy comes into focus

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There is not much hard news amid the fallout from the latest $200 billion in tariffs, but there are several media reports that take the temperature of U.S.-China relations:

  • China does not import enough from the U.S. to directly reciprocate tariffs on the order of $250 billion — if they come to pass — so many observers have predicted China will put up non-tariff barriers to U.S. goods and services, or “qualitative measures.” The Wall Street Journal indicates (paywall), “Measures being rolled out include holding up licenses for U.S. firms, delaying approval of mergers and acquisitions involving U.S. companies and ramping up inspections of American products at borders.”
  • China holds a strategic card in rare earth metals, the New York Times writes (paywall), as “rare earths are refined on a large scale in only two places: at Lynas’s plant in Malaysia and in China.” The minerals, with such strange names as neodymium, praseodymium, lanthanum, and cerium, are vital for “personal electronics like smartphones, televisions and hair dryers, and electric and hybrid cars.”
  • China is encouraging “American companies to do more to lobby the U.S. government and work hard to safeguard their own interests,” according to a Ministry of Commerce spokesperson, the Washington Post reports.
  • China continues to avoid ramping up hostilities, unlike how it has handled trade fights with “Japan, France, the Philippines and most recently South Korea,” all of which received the brunt of boycotts in the Chinese market and widespread hostility in state media, the Financial Times says (paywall). “The US is larger-scale, and a different kind of economic power than Japan or Korea. That makes this quite unique,” Max Zenglein, senior economist at the Mercator Institute for China Studies in Berlin, told the FT.
  • Part of China’s new strategy is courting foreign investment, including from German chemical giant BASF and Tesla, to counter China’s overseas image as a closed-off market. Today, Bloomberg reported that BMW is “set to become the first to go above 50%” (paywall) in its ownership of a car venture in China, and that Deutsche Bank (paywall) “became the latest foreign bank to be allowed to underwrite China’s corporate bonds as the government opens up the onshore debt market.”
  • Critics argue that these deals, and other pledges from Beijing “to make it easier for foreign businesses to set up operations also effectively acknowledges that it has had discriminatory market barriers,” Reuters reports.
  • American businesses in China are remarkably optimistic, according to a new American Chamber of Commerce survey, as profits have stayed steady and “eighty-one percent expect revenue growth in 2018,” though “69% of survey respondents opposed the use of tariffs to achieve the Trump administration’s trade goals.”

Other news from the trade war:

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Lucas Niewenhuis

Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.

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