Posts Tagged ‘unfair trade practices’

China’s trade surplus with US swells in June

July 13, 2018

China’s surplus with the US swelled in June, data showed Friday, likely stoking tensions with Donald Trump, who has imposed tariffs on billions of dollars of Chinese goods citing unfair trade practices.

The increase came as total trade between the world’s top two economies rose 13.1 percent for the first half of the year, despite the face-off, which has seen tit-for-tat tariffs on billions of dollars worth of goods and warnings of more to come.

China’s surplus with the US rose to $133.8 billion in January-June, and a record $28.97 billion last month.

© GETTY IMAGES NORTH AMERICA/AFP | The trade imbalance is heart of Donald Trump’s anger at what he describes as Beijing’s unfair trade practices that are hurting American companies

The imbalance is at the heart of Trump’s anger at what he describes as Beijing’s unfair trade practices that are hurting American companies and destroying jobs.

But on Thursday, China blamed those problems on the US, saying the trade imbalance was “overestimated” and caused by “domestic structural problems” in the United States, in a statement from the commerce ministry.

Bilateral trade between China and the US was booming last month during the exchange of trade threats between Beijing and Washington, Chinese official customs data showed. China exported US$217.7 billion of goods to the US in the first half of 2018, up 13.6 per cent year-on-year. Photo: Bloomberg

“This trade dispute will definitely have an impact on China-US trade and will have a very negative impact on global trade,” said customs administration spokesman Huang Songping at a briefing Friday.

With the wider world, China’s exports rose 11.3 percent on-year in June, beating a Bloomberg News forecast of 9.5 percent, while imports increased 14.1 percent, below the forecast 21.3 percent.

AFP

See also:

China reports record surplus with US and exports growth before July 6 tariffs kick in

https://www.scmp.com/news/china/economy/article/2155113/china-reports-record-surplus-and-strong-exports-growth-us-july-6

See also:

China makes $8.46 from an iPhone. That’s why a U.S. trade war is futile

https://www.cbsnews.com/news/china-makes-8-46-from-an-iphone-and-thats-why-u-s-trade-war-is-futile/

Related:

Advertisements

Trump’s Tariff Barrage Pushes China Fight to Point of No Return

July 11, 2018

U.S. President Donald Trump is pushing his trade conflict with China toward a point where neither side can back down.

By Aug. 30, as the U.S. nears mid-term elections vital for Trump’s legislative agenda, the White House will be ready to impose 10 percent tariffs on $200 billion of Chinese-made products, ranging from clothing to television parts to refrigerators. The levies announced Tuesday — together with some $50 billion already in the works — stand to raise import prices on almost half of everything the U.S. buys from the Asian nation.

Image may contain: stripes and sky

China has seven weeks to make a deal or dig in and try to outlast the U.S. leader. President Xi Jinping, facing his own political pressures to look tough, has vowed to respond blow-for-blow. He’s already imposed retaliatory duties targeting Trump’s base including Iowa soybeans and Kentucky bourbon.

Yet matching the latest U.S. barrage would force China to either levy much higher tariffs or take more disruptive steps like canceling purchase orders, encouraging consumer boycotts and putting up regulatory hurdles. Not only does that risk provoking Trump to follow through on threats to tax virtually all Chinese products, it could unleash nationalist sentiment on both sides that fuels a deeper struggle for geopolitical dominance.

“It’s already past the point of no return,” said Pauline Loong, managing director at research firm Asia-Analytica in Hong Kong. “What’s next is not so much a trade war or even a cold war as the dawn of an ice age in relations between China and the United States.”

Read more on the escalating conflict

Handbags and Cameras Hit as Trump Tariffs Target Consumers
You Have a Month to Comment on Bull Semen, Vegetable Hair Tariff
Trump Must Meet Xi to Stop Trade War, Top House Republican Says
Those Cheap Chinese TVs? They May Just Get a Lot More Expensive

Stocks fell, the dollar gained and commodities slid with emerging-market assets Wednesday as investors assessed the fallout. While earlier tariffs were expected to have only a limited impact, economists warn a full-blow trade war could derail the strongest economic upswing in years.

The Chinese Commerce Ministry said Tuesday that it would be forced to retaliate against what it called “totally unacceptable” U.S. tariffs. There have been no confirmed high-level talks between to two sides since early an early June visit to Beijing by U.S. Commerce Secretary Wilbur Ross that achieved no breakthroughs.

Beijing “never yields to threat or blackmail” and will retaliate against the “groundless” tariffs, China’s Vice Minister of Commerce Wang Shouwen said in written comments to Bloomberg. “The U.S. side ignored the progress, adopted unilateral and protectionist measures, and started the trade war.”

What Our Economists Say…

“As the targeted imports broaden to include more consumer products, a hit to household wallets and a bump to inflation could start to shift the political calculus in the U.S.,” said Bloomberg’s China economist Fielding Chen.

The Aug. 30 date ensures the trade fight features prominently in November’s U.S. congressional elections, and the announcement exposed fissures between Trump and his Republican Party about the strategy. House Ways and Means Committee chief Kevin Brady, of Texas, warned of “a long, multi-year trade war between the two largest economies in the world that engulfs more and more of the globe.”

“Despite the serious economic consequences of ever-increasing tariffs, today there are no serious trade discussions occurring between the U.S. and China, no plans for trade negotiations anytime soon, and seemingly little action toward a solution,” Brady said. Senate Finance Committee Chairman Orrin Hatch, of Utah, called the new levies “reckless” and not “targeted.”

The latest move suggests that Trump — who in March declared that “trade wars are good and easy to win” — may be compromising on his pledge to spare consumers from the pain. The tariffs could raise the price of everything from baseball gloves to handbags to digital cameras just voters are heading to the polls. Other high-profile items such as mobile phones have so far been spared.

Unfair Practices

The U.S. felt it had no choice, but to move forward on the new tariffs after China failed to respond to the administration’s concerns over unfair trade practices and Beijing’s abuse of American intellectual property, according to two senior officials who spoke to reporters. The Trump administration has so far rejected Chinese offers to trim its massive trade surplus by buying more American goods, and is demanding more systemic change.

“For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,” Trade Representative Robert Lighthizer said in a statement. “China has not changed its behavior — behavior that puts the future of the U.S. economy at risk.”

Although the looming elections provide an immediate concern for Trump, a trade war poses a more existential concern for Xi, whose Communist Party has built its legitimacy on economic success. Prominent academics and some government officials have begun to question if China’s slowing, trade-dependent economy can withstand a sustained attack from Trump, which has already weighed heavily on stock prices.

Among other things, the U.S. is asking China to roll back its “Made-in-China 2025” program, a signature Xi initiative to dominate several strategic industries, such as semiconductors to aerospace development. Since abolishing presidential term limits, Xi has strengthened his control over the levers of power and money in China and can’t afford to look weak.

“China is showing no signs of backing down and instead looks like it is preparing for a drawn out conflict,” said Scott Kennedy, deputy director of China studies at the Center for Strategic and International Studies in Washington. “China has a million and one ways to retaliate.”

— With assistance by Jenny Leonard, Andrew Mayeda, and Bryce Baschuk

Bloomberg
.
https://www.bloomberg.com/news/articles/2018-07-11/trump-s-tariff-barrage-pushes-china-fight-to-point-of-no-return

China Targets Trump Counties Across America In Trade War Retaliation Scheme

July 6, 2018

Beijing’s retaliation would be felt by U.S. soybean farmers, auto makers and oil producers

Image may contain: sky and outdoor

The fallout from President Donald Trump’s tariffs and China’s countertariffs—which formally went into effect on Friday—will have the greatest impact on the U.S. counties that voted Mr. Trump into office.

The U.S. tariffs on China will initially hit about $34 billion of goods, with plans in place to raise that total to $50 billion. The tariffs will fall mostly on Chinese aerospace products, information technology, auto parts and medical instruments. Beijing is retaliating with tariffs on $34 billion of American goods, aimed at farm products, cars and crude oil.

The U.S. tariffs will provide a protective buffer for some companies that compete with Chinese imports, but Beijing’s retaliation will affect huge swaths of the American heartland, according to an analysis from Moody’s Analytics, which calculated how much of gross domestic product in each county is in industries that would benefit from the protection or be hurt by the retaliation.

Here’s How China Can Escalate a Trade War With the U.S.

China has pledged to retaliate against U.S. tariffs in “equal scale and equal strength.” In addition to tariffs, here are three ways Beijing could hit back at Washington. Photo: Getty Images

The retaliatory tariffs will fall especially hard—affecting more than 25% of a county’s economy—in nearly 20% of the counties that voted for Trump, affecting eight million people. Only 3% of the counties that voted for Democrat Hillary Clinton, with a total population of 1.1 million, would be so heavily hit. In contrast, only 8% of counties that voted for Mr. Trump, a Republican, have protective buffers for more than a quarter of their economy.

“The beneficiaries are pretty narrowly regionally concentrated, right in the industrial Midwest. Outside of that, it’s hard to identify anyone who benefits to any significant degree,” said Mark Zandi, chief economist of Moody’s Analytics. “The areas that suffer are broader and more diffuse. The agricultural areas get nailed. Some of the manufacturing centers get hurt as well.”

The Trump administration has argued that China engages in unfair trade practices with the U.S. that need to be countered, even at the cost of pain to the U.S. economy.

U.S. regions with more than 25% of their economy affected by the Chinese tariffs are likely to feel a painful fallout if the tariffs remain in effect. Industries such as soybeans in the Great Plains, auto manufacturers in the upper Midwest and oil-producing regions in the Dakotas or Texas will be among the most affected. China imports the most soybeans in the world, according to the U.S. Department of Agriculture, and was the second-biggest destination after Canada for U.S. crude-oil exports in 2017, according to the U.S. Energy Information Administration.

Counties that benefit are home to industries whose Chinese competitors will now face tariffs while those that suffer are home to industries that will face high tariffs exporting to China. The analysis didn’t consider second-order effects, such as which counties have consumers and businesses that will pay higher prices due to the tariffs.

“If it’s over 25%, there’s a pretty good chance that the economy is going to feel it pretty significantly, could even contract, and see unemployment rise,” Mr. Zandi said.

Write to Maureen Linke at maureen.linke@wsj.com and Josh Zumbrunat Josh.Zumbrun@wsj.com

Includes EXCELLENT interactive graphics by U.S. county and video:

Trump trade war to become reality as China tariffs hit

July 5, 2018

After months of threats and dwindling hopes the two sides would pull back from the brink of all-out trade war, steep US tariffs on tens of billions in Chinese goods are due to take effect at midnight Thursday.

China already has announced it will respond in kind on the same schedule as the United States while President Donald Trump has countered with a threat to double down by progressively ratcheting US penalties up to a total of $450 billion in goods — which would represent the lion’s share of all of China’s exports to the United States.

Trump’s escalating global trade dispute has already affected the economy, with punitive duties now in place for steel and aluminum and the White House threatening slap duties on auto imports.

© AFP/File | A worker handles steel cable at a steel factory in Lianyungang, in China’s eastern Jiangsu province, on May 1, 2018

Prices are rising, especially for steel and aluminum, and companies are starting to feel reticent about investments or plan to shift production overseas to avoid retaliation against US exports.

Trump says the measures are aimed at leveling the playing field for American companies, which he says will become more competitive.

But for firms like Mid-Continent Nail Corporation in Missouri, the largest US nail manufacturer, rising steel prices have meant immediate job losses and threaten to force the company to shut down operations altogether.

– Tariffs start Friday –

Trump initially threatened to hit China with 25 percent tariffs on a list of goods worth $50 billion annually, over what Washington says is the rampant theft of US technical know-how.

But the list was pared down to 818 product categories worth more than $32 billion after US companies requested exemptions for key imports.

A second tranche of 284 goods valued at $16 billion — which would bring the total to $50 billion — will be targeted after they undergo an additional process of review and public comment, which could lead to a lower total.

The tariffs hit a broad spectrum of Chinese goods — like passenger vehicles, radio transmitters, aircraft parts and computer hard drives — from industries the Trump administration says have benefited from unfair trade practices.

Beijing will hit back with tariffs initially on nearly $30 billion in US goods, also taking effect Friday, including vehicles and many agricultural and food products, such as soybeans, which will hit US farmers hard.

The remaining $15 billion would be imposed in the second phase would target crude oil, propane and chemicals.

Added to the tariffs are the increased scrutiny on Chinese investments in the United States, which the government says are sensitive for economic or national security reasons, which already has reduced incoming investment.

– Economic threat –

Economists have for months warned of the potential damage to the US and global economies from aggressive trade policies that evolve into protectionism, which would raise prices and upend global supply chains.

The Trump team has paid little heed to those concerns and Commerce Secretary Wilbur Ross this week called the warnings “premature and probably quite inaccurate.”

Trump himself tweeted this week that the economy is doing “perhaps better than ever” even “prior to fixing some of the worst and most unfair Trade Deals ever made by any country.”

But American businesses increasingly are raising their voices in alarm about the potential for dire consequences.

The influential US Chamber of Commerce, with headquarters just steps from the White House, urged Trump this week to reconsider his actions, saying the counter-tariffs now affected $75 billion in American exports and endangered US jobs.

While Trump touts announcements of jobs created in steel plants due to the tariffs, manufacturing industries warn that many more jobs will be lost in companies producing autos, auto parts, appliances and other goods that depend on imported components.

One study said the losses could reach as high as 400,000 jobs.

Iconic American motorcycle brand Harley Davidson announced plans to move production overseas to evade the EU’s retaliatory tariffs, drawing a barrage of attacks on Twitter from Trump.

But a manufacturing survey from the Institute for Supply Management shows they are not alone, while other companies say uncertainty is delaying investment plans.

The trade war arrives with many companies already struggling to find workers and facing backlogs to receive supplies.

Christine Lagarde, head of the International Monetary Fund, warned the tit-for-tat cycle of retaliation would create “losers on both sides.”

AFP

China’s Xi calls out ‘selfish, short-sighted’ trade policies — Trump suggests no tariffs, no subsidies, complete “free trade” without unfair trade practices

June 10, 2018

Chinese President Xi Jinping, whose country is locked in a high-stakes trade dispute with the United States, on Sunday said China rejects “selfish, shortsighted” trade policies, and called for building an open global economy.

Xi did not mention the United States during a speech at a summit meeting of the Shanghai Cooperation Organisation (SCO), a regional security bloc led by China and Russia.

“We reject selfish, shortsighted, closed, narrow policies, (we) uphold World Trade Organisation rules, support a multi-lateral trade system, and building an open world economy,” Xi said in a speech in the port city of Qingdao.

Image may contain: 2 people, people smiling, people standing
A TV screen shows a live broadcast of Chinese President Xi Jinping attending a group photo of Shanghai Cooperation Organization (SCO) summit at the media center, in Qingdao, Shandong Province, China June 10, 2018. REUTERS/Aly Song

The United States and China have threatened tit-for-tat tariffs on goods worth up to $150 billion each, as President Donald Trump has pushed Beijing to open its economy further and address the United States’ large trade deficit with China.

Xi spoke hours after Trump said he was backing out of the Group of Seven communique, thwarting what appeared to be a fragile consensus on a trade dispute between Washington and its top allies.

“We must … discard Cold War thinking, group confrontation; we object to acts of getting one’s own absolute security at the cost of other countries’ security,” Xi said.

The SCO was launched in 2001 to combat radical Islam and other security concerns in China, Russia and across Central Asia.

It added two new members, India and Pakistan, last year and Iran has been knocking at the door. Tehran is currently an observer rather than a full member of a bloc that also includes four ex-Soviet Central Asian republics.

Xi also said China would offer the equivalent of 30 billion yuan ($4.7 billion) in loans under a framework formed by SCO countries.

China’s Faux Comparative Advantage

April 16, 2018

The economics textbooks don’t anticipate a state-directed economy that disregards the rule of law.

Container ships at a port in Qingdao, China.
Container ships at a port in Qingdao, China. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

In textbook economics, trade is a win-win: Two countries trade freely based on comparative advantage and share the resulting gains, improving welfare in both countries. America’s trade with China is as far from that model as the Earth is from Mars.

Historically, the U.S. has had a comparative advantage in manufacturing because of its high rates of technological innovation, correspondingly high rates of capital investment and worker productivity, strong protections for intellectual property, and wide availability of low-cost energy. Yet since joining the World Trade Organization in 2001, China has come to dominate traditional manufacturing. By 2015 it accounted for 28% of global production of autos, 41% of ships, more than 50% of refrigerators, more than 60% of televisions, and more than 80% of computers and air conditioners.

As is evident in government documents such as China 2025, China increasingly threatens to dominate the industries of the future: artificial intelligence, autonomous vehicles, blockchain systems, robotics, high-tech ship manufacturing and more. These technologies have profound strategic implications.

In large part because of China’s dominance in manufacturing, the U.S. last year ran a bilateral trade deficit in goods of $375 billion, or more than $1 billion a day. Contrary to the textbook model, whereby currency adjustments help rebalance trade, the U.S. trade deficit with China has been persistent—more than $4 trillion cumulatively since 2002—and growing.

Why is the textbook model failing? The answer is that China’s faux comparative advantage is the result of its state-directed investments, nonmarket economy, and disregard for the rule of law.

The problem’s taproot is Chinese intellectual-property theft and the forced transfer of foreign technology as a condition of accessing China’s market. These illicit practices, including widespread cyberespionage, allow Chinese companies to move rapidly up the innovation curve at much lower cost than their foreign competitors, which must recoup the cost of research and development through higher prices.

Other forms of economic aggression contribute to China’s faux comparative advantage. To protect its market, China erects high tariff barriers—e.g., its auto tariff is 10 times that of the U.S. China has high nontariff barriers, too, including intrusive licensing requirements and foreign-ownership restrictions that keep the playing field tilted in favor of Chinese companies.

To gain global market share, China showers its state-owned and state-financed enterprises with subsidized land and capital, myriad export subsidies, and lucrative tax preferences. To prevent the adjustments predicted by the textbook model of trade, China has historically undervalued its currency.

Most broadly, China’s “going out” strategy involves leveraging sovereign-wealth funds to capture the industries of the future. Three of the world’s 10-largest SWFs are from China, and China Investment Corp. has close to $1 trillion. These funds regularly scour technology-rich communities like Silicon Valley, Boston and Austin, Texas, seeking to purchase the crown jewels of American innovation. Since its founding in 2009, for example, Sinovation has accumulated $1.2 billion in total capital and has invested in almost 300 startups.

While the U.S. welcomes foreign capital, China perverts the investing process by targeting American companies based on strategic and military goals rather than pure economic considerations. Because high-technology acquisitions often generate spillover benefits for the Chinese military, its SWFs are often willing to pay distortive prices, far above what the free market would dictate.

At times the brazenness of China’s economic aggression has been breathtaking. In 2006 China’s State Nuclear Power Technology Corp. signed an $8 billion joint venture that resulted in the transfer by Westinghouse of more than 75,000 construction and technical documents on its signature AP1000 nuclear reactor. Meanwhile, Chinese cyber operatives allegedly were illegally penetrating Westinghouse’s Pennsylvania computers and information systems to acquire technical documents from its extensive R&D efforts.

By 2015 China had broken ground on a plant to construct its cloned Westinghouse reactor, the CAP1400. Today, as Westinghouse has struggled to stay out of bankruptcy, China is constructing reactors in Pakistan and Romania, is scheduled to build them in Argentina, Britain and Iran, and is bidding on projects in Saudi Arabia, South Africa and Turkey.

The biggest threat China’s faux comparative advantage poses is to the global trading system itself. The gains from trade will not accrue to all the partners when one of the largest is engaged in such market-distorting behavior.

It is in the name of fair, reciprocal and ultimately free and prosperous trade that President Trump is standing up to China’s intellectual-property theft and other unfair trade practices. The president has the backs of American workers, farmers and businesses. He deserves the support of a world now being victimized by China’s economic aggression.

Mr. Navarro is assistant to the president for trade and manufacturing policy and director of the White House National Trade Council.

https://www.wsj.com/articles/chinas-faux-comparative-advantage-1523817868

Donald Trump brands China a military rival in US reboot of great power strategy

January 31, 2018

Beijing stresses the two countries have common interests as US president insists that the stakes with China are not just economic

By Catherine Wong
South China Morning Post

PUBLISHED : Wednesday, 31 January, 2018, 9:29pm
UPDATED : Wednesday, 31 January, 2018, 9:55pm
 Image may contain: 1 person, stripes

US President Donald Trump named China as a major US competitor on both economic and military fronts in his first state-of-the-union address, another sign that Washington is putting great power rivalry at the heart of its national strategy.

Analysts said Trump’s explicit references to China contrasted with Beijing’s view of the Sino-US relationship and those of his predecessors who saw China as a partner despite their economic competition.

In response to the speech, Beijing called on Washington to abandon the “cold war” approach to their ties and for the two nations to respect each other.

“Even though there are differences, the two countries still share more mutual interests than differences,” Chinese foreign ministry spokeswoman Hua Chunying said on Wednesday. “History and reality shows that cooperation is the only correct choice.”

Chinese Premier Li Keqiang also played down concerns over rising confrontation between Beijing and Washington, stressing that both sides have a lot of common interests.

“I hope the United States can have a comprehensive and objective view of the Sino-US relationship, expand our common interests and manage our differences,” Li said.

In an annual address to a joint session of the US Congress, Trump vowed to boost American defences to counter threats from China and Russia.

“Around the world, we face rogue regimes, terrorist groups, and rivals like China and Russia that challenge our interests, our economy, and our values,” Trump said.

“In confronting these dangers, we know that weakness is the surest path to conflict, and unmatched power is the surest means of our defence.

“For this reason, I am asking the Congress to end the dangerous defence sequester and fully fund our great military.”

Trump also said the US must “modernise and rebuild” its nuclear arsenal, although the US would “hopefully never having to use” such weapons.

He also highlighted the need for fair and reciprocal trade relationships, and promised to take action to defend the country’s intellectual property.

“And we will protect American workers and American intellectual property through strong enforcement of our trade rules,” he said.

Trump’s reference to China as a direct threat on all fronts is a departure from the take of his three immediate predecessors.

In 2000, then US president Bill Clinton talked about the importance of engaging China and appealed to Congress to back the US’ effort to bring China into the World Trade Organisation.

Six years later, president George W Bush referred to China as one of the “new competitors” along with India on the economic front.

In 2016, US president Barack Obama said only that the United States must not let China write the rules of global commerce.

Trump’s focus on China as a broader threat reflects a major shift in US defence priorities outlined in US Defence Secretary Jim Mattis’s National Defence Strategy released in January. The document says the US will refocus on China and Russia after a decade of fighting terrorism in the Middle East.

Trump has also signed into law a sweeping defence policy bill authorising a US$700 billion budget for the military, but it still needs lawmakers’ approval.

Wu Xinbo, director of Fudan University’s Centre for American Studies, said Trump was playing up the threat from China and Russia to back his call for a big increase in the military budget.

“[But] China has yet to pose a direct military threat to the US,” Wu said.

Teng Jianqun, director of the US studies department at the China Institute of International Studies, said there was a huge discrepancy in how China and the US viewed their relationship.

Chinese analysts and officials tended to be optimistic about bilateral ties, while those in the US were pessimistic, Teng said.

“If we do not pay attention to this perception gap, there could be miscalculations from both sides,” he said.

Jie Dalei, assistant professor of international relations at Peking University, said that even though Trump had clearly named China as one of his country’s greatest rivals, it would be difficult for the US to follow through on a strategy to contain China.

“The [US’] Indo-Pacific strategy is still a concept rather than a plan for execution,” Jie said. “Without economic assistance or other support, Trump won’t be able to achieve any more than Obama.”

Additional reporting by Wendy Wu and Liu Zhen

http://www.scmp.com/news/china/diplomacy-defence/article/2131445/donald-trump-brands-china-military-rival-us-reboot

IMF chief Christine Lagarde finds common cause with Donald Trump

January 26, 2018

IMF chief Christine Legarde found common ground with US president Donald Trump on encouraging fair trade and protecting intellectual property rights. (AP)

LONDON: International Monetary Fund (IMF) Managing Director Christine Lagarde found at least some common cause with US President Donald Trump on Friday in supporting the global fight against intellectual property (IP) theft.

.
Speaking on a panel at the World Economic Forum in Davos, Lagarde echoed a similar sentiment delivered by Trump earlier in the day, stating that he would not “tolerate” IP theft.
.
Lagarde also stressed that it was important to tackle “unfair” trade practices.
“We need to have more, better trade and fair trade, but for this we need international cooperation,” she said. “We need a reset, we need to look at IP rights, but it needs to be looked at in a cooperative way. The World Trade Organization is a forum where this should happen.”
.
The IMF expects global economic growth of about 3.9 percent this year and next year. “We are in a sweet spot and we should celebrate,” said Lagarde.
.
She said this was the result of good policies, but there were risks, including excessive inequalities and lack of international cooperation.
.
The IMF chief stressed that a lack of international cooperation could lead to “significant” geopolitical risks. She added that “lagging productivity” could be boosted with more investment into R&D to facilitate innovation.
.
“We need more trade not less,” she said. “And the fight against corruption is vital to give more hope and encourage our economies.”
.
Speaking on the same panel, Mark Carney, governor of the Bank of England, told the WEF audience that more investment relative to savings was leading to monetary “normalization.”“For central banks, there is a regime shift toward normalization,” he said.
.
Carney added: “UK banks have five times more capital than before the 2008 crisis and the Bank of England is confident it can withstand the shock of the hardest of hard Brexits.”
.

Trump, Xi Push Opposing Views on Trade

November 11, 2017

At Asia summit, U.S. president disavows multilateral agreements that ‘tie our hands’

In Asia, Trump Delivers Message of Economic Nationalism
President Donald Trump laid out an economic nationalist agenda Friday, saying that the U.S. had been treated unfairly by global trade practices and that he wouldn’t allow the country to be “taken advantage of anymore,” in his address to business leaders from 21 countries at the Asia Pacific Economic Cooperation summit in Da Nang, Vietnam. Photo: Reuters

DA NANG, Vietnam—President Donald Trump delivered his vision for a new American economic relationship with Asia here Friday, one that eschews big trade deals the U.S. has long favored for country-to-country bargaining.

Moments later, Chinese President Xi Jinping took the same stage at a Pacific Rim summit and praised the kind of multicountry treaties that have underpinned American influence in the region for decades.

https://www.wsj.com/articles/trump-declares-new-world-trade-order-1510300438

***************************************

Bloomberg

Xi, Trump Offer Dueling Visions of Globalization at Asia Forum

  
Chinese President Xi Jinping and U.S. President Donald Trump laid down starkly contrasting visions for Asia’s future Friday, with Xi pledging a new era of globalization propelled by his nation’s economic might as Trump offered America’s largess only to those who play by his rules.
  • The two leaders speak in back-to-back addresses in Vietnam
  • Trump says play by the rules, Xi says get on the China train

China’s Xi on Economy and Globalization

Chinese President Xi Jinping and U.S. President Donald Trump laid down starkly contrasting visions for Asia’s future Friday, with Xi pledging a new era of globalization propelled by his nation’s economic might as Trump offered America’s largess only to those who play by his rules.

In back-to-back speeches to business leaders at the Asia-Pacific Economic Cooperation summit in Vietnam, Xi and Trump in effect competed for the region’s economic affections, with divergent blueprints of what the 21st Century economy should look like.

Speaking moments after Trump told the same audience the U.S. would not seek multilateral trade deals and wanted to make the system fairer for Americans, Xi painted a picture of a global order that would bring collective benefits, saying, “let more countries ride the fast train of Chinese development.”

The speeches represent contrasting pitches for leadership in a region suspicious of China’s intentions and unsure about America’s staying power. Xi’s speech glossed over regional unease over China’s rising clout while pledging free trade and stability. Trump dwelled on regional flash points while criticizing the World Trade Organization and offering trade on America’s terms.

Trump’s speech cataloged the ills of globalization, saying too many countries had flouted the rules for years with impunity, harming American workers and U.S. companies. “We are not going to let the United States be taken advantage of anymore,” Trump said.

Trump Seeks Robust Trade Relationships Rooted in Fairness

Xi, on the other hand, said “the concept of globalization should pay more attention to openness and tolerance, while the direction should focus on balance.” China will “continue to build an open economy and work hard to achieve mutual benefits,” he added. “Opening up will bring progress and those who close down will inevitably lag behind.”

China Doubts

The comments signal a continuation of Xi’s drive to cast himself as a champion of global free trade as the Trump administration challenges China’s barriers to access for foreign companies. Earlier this year, Xi launched his push-back against protectionism in a speech to billionaires and government officials gathered at the World Economic Forum in Davos, Switzerland.

Still, while Xi has spoken strongly in support of the global trading order this year there’s been little tangible evidence of Beijing following through.

In a January survey of 462 U.S. companies by the American Chamber of Commerce in China, more than 60 percent expressed little or no confidence that China would open its markets in the next three years. China still ranks 59th out of 62 countries evaluated by the Organization for Economic Cooperation and Development in terms of openness to foreign direct investment.

In a major speech aimed at domestic audiences at China’s 19th Party Congress in October, Xi’s language on reform stuck closely to previous pledges while promising to make sure that China’s Communist Party “leads everything.”

Trump’s Plan

Trump too laid out a path for how other countries could boost their economy: He offered economic partnerships with the U.S. but only through bilateral trade pacts, and he pledged never to again join a multilateral deal like the Trans-Pacific Partnership, which would have bound the U.S. to 11 countries as a bulwark against China.

“I will make bilateral trade agreements with any Indo-Pacific country that wants to be our partner and will abide by the principle of fair and reciprocal trade,” Trump said.

Nations already have doubts about the U.S. commitment under Trump. After Asian countries tied up with America on TPP, Trump tore up the deal — leaving them wondering if Trump was turning his back on the region as he pursued an “America First” agenda.

When the U.S. enters into a trade relationship, Trump said, “we will from now on expect that our partners will faithfully follow the rules, just as we do. We expect that markets will be open to an equal degree on both sides and that private industry, and not government planners, will direct investment. For too long and in too many places, the opposite has happened.”

Power, Patronage

Trump also said those who play by the rules will be the U.S’s closest economic partners and that the U.S. is seeking friendly ties in the region. “We don’t dream of domination,” Trump said. “We will not make decisions for the purposes of power or patronage.”

“I doubt Trump will have many takers for bilateral deals, particularly given that he defines fair trade as the absence of a deficit,” said David Skilling, director of Singapore-based advisory firm Landfall Strategy Group. “Apart from Singapore, most Asian economies run sizable trade surpluses with the U.S.,” he said.

“It is not a very well thought-out strategy. A transactional, zero-sum ‘America First’ approach won’t do much to advance U.S. interests in the region,” he said.

Trump and Xi have very different visions for the world

Xi’s remarks came after he pledged during a state visit to China by Trump to further open his economy to foreign investors. Following the visit, China announced a plan to open its financial sector by removing ownership limits on its banks and asset-management companies.

‘Continuous Progress’

Xi vowed to continue opening the Chinese economy to foreign players and to undertake structural reforms, echoing remarks he delivered in Beijing on Thursday. “In the next fifteen years, China wants to set up a new platform for the cooperation of all parties in entering the Chinese market,” Xi said.

Xi called on the region to make “continuous progress” toward what would be known as the Free Trade Area of the Asia-Pacific and to quickly complete negotiations on a 16-nation Asia trade pact known as the RCEP.

During Trump’s visit to Beijing on Thursday, Xi didn’t respond directly to Trump’s charges of unfair trade practices, but said he was committed to opening up China’s economy. He cited new deals with U.S. companies as “great examples” of the potential “win-win nature” of ties.

— With assistance by Jason Koutsoukis

Trump optimistic on trade, North Korea after China talks

November 9, 2017

By JILL COLVIN and JONATHAN LEMIRE

Donald Trump, Xi Jinping

BEIJING (AP) — President Donald Trump on Thursday criticized the “very one-sided and unfair” trade relationship between the U.S. and China, but stopped short of castigating Chinese President Xi Jinping by saying he doesn’t blame the country for having taken advantage of the U.S.

Speaking after the announcement of new business deals between U.S. and Chinese companies, Trump said China “must immediately address the unfair trade practices that drive” what he said is “shockingly” large trade deficit, along with barriers to market access, forced technology transfers and intellectual property theft.

“But I don’t blame China,” he said. “After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens?”

To applause, Trump said: “I give China great credit.”

Trump’s comments came during his second day in China and after lengthy meetings with Xi. The day included announcements that the U.S. and China had signed agreements valued at more than $250 billion for products including U.S.-made jet engines, auto parts, liquefied natural gas and beef.

Such contract signings are a fixture of foreign leader visits to Beijing and are intended to defuse foreign complaints about China’s trade policies.

President Donald Trump commented at a business event in Beijing on Thursday that he does not blame China for the trade deficit with the US. Instead, he said he blames previous US administrations. (Nov. 9)

Many of the contracts signed Thursday appeared to represent purchases that Chinese mobile phone makers, airlines and other customers would have made anyway, but were saved to be announced during Trump’s visit. It was unclear if the pledges extend beyond a U.S.-China trade agreement announced in May that featured LNG and beef exports to China.

The deals are “a way of distracting from the fact that there’s been no progress in China on structural reform, market access or the big issues that the president has tried to make progress on with regard to China,” said Elizabeth Economy, the Asia studies director at the Council on Foreign Relations.

Trump had made narrowing the multibillion-dollar U.S. trade deficit with China a priority for his administration. During the presidential campaign, he accused China of “raping our country” on trade and pledged to minimize the countries’ trade imbalance.

China’s trade surplus with the United States in October widened by 12.2 percent from a year earlier, to $26.6 billion, according to Chinese customs data released Wednesday. The total surplus with the United States for the first 10 months of the year rose to $223 billion.

For his part, Xi promised a more open business environment for foreign companies in China and said his country was committed to further opening its economy to foreign investment.

“China will not close its doors” and will open them “even wider,” he said, pledging that foreign companies in China, including American ones, would find the market “more open, more transparent and more orderly.”

The United States and other trading partners have been pressing Beijing to give their companies more access to its state-dominated economy. But it remains unclear how far China will go to fulfill its pledges. Previous U.S. administrations have hailed market-opening promises only to be left disappointed.

Xi also described U.S.-China relations as standing at a “new historic starting point,” and declared: “The Pacific Ocean is big enough to accommodate both China and the United States.”

Before arriving in China, Trump had delivered a stern message to Beijing, using an address to the National Assembly in South Korea to call on China, North Korea’s biggest trade partner, to do more to confront and isolate the antagonistic nation. That included calling on China to fully implement U.N. Security Council resolutions aimed at depriving the North’s government of revenue for its nuclear and ballistic missile programs

“You cannot support, you cannot supply, you cannot accept,” he said.

Trump on Thursday appeared far more conciliatory, thanking China for its efforts and saying he’d been encouraged by his conversations.

“China can fix this problem easily. And quickly. And I am calling on China and your great president to hopefully work on it very hard,” Trump said. “If he works on it hard it will happen. There’s no doubt about it.”

It was an optimistic tone that Trump stuck throughout the day. Earlier, he’d said he looked “forward to many years of success and friendship working together to solve not only our problems, but world problems, and problems of great danger and security.”

“I believe we can solve almost all of them, and probably all of them,” he said.

China is increasingly disenchanted with North Korea’s nuclear weapons development, but remains wary of using its full economic leverage over its traditional ally. It fears triggering a collapse of the North’s totalitarian regime that could cause an influx of refugees into northeastern China and culminate in a U.S.-allied unified Korea on its border.

Before the meetings, China rolled out the red carpet for Trump, treating him to an elaborate welcome ceremony on the plaza outside the Great Hall of the People before the leaders turned to their private talks.

Trump looked on approvingly as a Chinese honor guard played the national anthems of both countries, cannons boomed and soldiers marched. He clapped and smiled as children waving U.S. and Chinese flags and flowers screamed and jumped wildly.

The day before, Trump and first lady Melania Trump spent the first hours of their visit on a private tour of the Forbidden City, Beijing’s ancient imperial palace. It’s usually teeming with tourists but was closed to the public for the presidential visit.

Trump said Thursday the welcome “was truly memorable and impressive and something I will never forget.”

___

Associated Press writers Christopher Bodeen in Beijing and Darlene Superville and Ken Thomas in Washington contributed to this report.

___

Follow Colvin on Twitter at http://twitter.com/@colvinj and Lemire at http://twitter.com/@JonLemire

Related: