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Last Chinese warning

Beijing puts Americans in place

China does not intend to wait for mercy from Washington and will show that it also has weight in the world.

According to the American newspaper The New York Times, on June 4-5, closed meetings of Chinese officials with business representatives took place, where they received this warning.


The publication reports that representatives of the US Microsoft and Dell, the British ARM and the South Korean Samsung Electronics and Hynix took part in the meeting. On the Chinese side were representatives of the National Commission for Development and Reforms, the Ministry of Commerce and the Ministry of Industry and Information of the country. NYT notes that a high level of representatives indicates that this meeting was authorized by the top leadership of the PRC.


– Now it is an extremely delicate step, because the Trump administration, using tactics of balancing on the brink of war, destabilized all relations: commercial and others, – said Scott Kennedy, senior adviser at the Center for Strategic and International Studies.


The same day, it became known about the negotiations on the margins of the G20 ministerial meeting in Japan between US Treasury Secretary Stephen Mnuchin and the head of the People’s Bank of China (CB) and Gan.


– I had a constructive meeting with the head of the People’s Bank of China and Gan, during which we had a frank discussion on trade issues, – Mnuchin wrote in his Twitter account.


Note that before this Mnuchin told reporters that he does not set himself specific goals, that during the meeting the parties will discuss financial, economic and trade issues, but this meeting “will not be negotiation.” He also made it clear that the main progress in trade negotiations can only be achieved at the upcoming meeting of US President Donald Trump and Chinese President Xi Jinping on the margins of the G20 summit.


It is worth noting that many experts here are very skeptical.


– The leaders of China and the United States will meet at the end of next month in Japan, and I think there will be some positive news, – an influential government expert, former chairman of the People’s Bank of China Dai Sianglong told the South China Morning Post. At the same time, he expressed pessimism and doubt about the possibility of achieving a breakthrough in the settlement of trade disputes between countries at this stage.


Recall, after May 16, the US Commerce Department added Chinese Huawei and 70 of its subsidiaries to the blacklist, a number of US companies, including Google, Intel, Qualcomm, Xilinx and Broadcom, announced they would stop working with the Chinese giant. Also, the British corporation ARM, a leading global manufacturer of technology for mobile chips, has ceased cooperation with Huawei.


– One fact to start. About 50% of the world’s reserves of rare-earth metals, without which the production of electronics will simply stop, is in China, recalls Igor Shatrov, deputy director of the National Institute for the Development of Modern Ideology.


– That is, China has something to present as an argument to transnational IT corporations, whose headquarters are in the United States. But China is no longer just a source of raw materials and a global factory. This is the intellectual center where the most advanced technologies are developed. For example, Huawei, which came under US sanctions, is a leader in the development of 5G technologies. American AT & T and Cisco, which are also engaged in the development of networks of the 5th generation, have been catching up with the Chinese for years. Is this the main reason for the pressure on Huawei?


– How do you understand such warnings? China decided after America to adopt threat tactics? Or he has nowhere to go?


  • This behavior of the Celestial Empire, indeed, is forced. And Beijing has to remind Washington that China also has its own interests and, most importantly, the possibilities for their realization.


– How will the company respond? They after all, it turns out, between two fires …


  • I think the issue of relations with China will soon become the topic of the domestic political agenda.
  • After all, the new presidential elections in the United States are not far off. Summing up Trump’s four years, the part of the business that supports his ideas on rebuilding the world economy, we will have to determine how effective Trump’s methods are. So, the talks between the Chinese and the American business are in fact negotiations to some extent with the sponsors of the future presidential campaign.

– And what about Trump? What will he answer?

– Trump got the bit between his teeth. But we have already observed that he finds the strength to abandon the struggle if he sees its futility. Much now depends on the actions of China. If Beijing goes to the end and besides the mirror response measures, it will preemptively hit the weak points of the United States, Washington will back down and the situation may stabilize.

– It is reported that the head of the Ministry of Finance of the United States met with the head of the People’s Bank of China. Can we say that both sides do not want war and are focused on dialogue?


– The American Ministry of Finance did not accidentally bustle. And it’s not just trading duties. The US national debt is another ace in the hole in China. China possesses US bonds worth more than $ 1.1 trillion, being their largest foreign holder. Chinese dumping of American treasuries is able to bring down the global financial system. You know, sometimes the thought comes that it is just such a reboot of the modern economy, entangled in virtual money, and necessary. True, the way out of the inevitable global financial crisis in such a case may take many years.

– What do you expect from the negotiations of Trump and Xi Jinping in Japan? Will there be progress?


– Predicting Trump’s actions is a thankless job. But one thing is clear: as a result of a series of trade wars declared by the United States to practically the whole world, the world economy is on the verge of a catastrophe. I think Trump is aware of this and is looking for a plausible excuse to slow down.

  • In this situation, China behaves with extreme restraint, said Stanislav Byshok, executive director of the CIS-EMO International Monitoring Organization.

– He does not blame anyone and does not threaten anyone, only informs his partners that the difficulties in relations between Beijing and Washington will also affect them. It’s not that the partners didn’t understand this, but Beijing decided, by organizing such a meeting, to demonstrate its concern with what was happening and, at the same time, respect for the interests and concerns of those companies that are faced with difficult choices.


– What can be the promised consequences?


– Obviously, we are talking about the closure, full or, more likely, partial, for them of the Chinese markets. Consequently, we are talking about a serious reduction in profits.

– Will it bring results? What will companies choose between two fires?

– In the first approximation, of course, the choice will be made in favor of the United States. At the same time, there is an understanding that the trade confrontation between the two great powers, at least in a sharp form, is a temporary phenomenon, and Washington will soon soften its position, therefore the question of choosing between two fires will cease to be relevant.

  • Strategic tasks dramatically change to bureaucratic performances, the real effectiveness of which is close to zero.

– How can the US authorities respond to this?

– In this case, they hardly expect any reaction from the USA. In Washington, there is a conviction that the world from America will not go anywhere, and the theses on the triumph of multipolarity still remain at the level of conversations. There is no particular concern that in the United States and China someone will choose China is not observed in Washington.

– How far do you think trade wars can go? What can they end up with?

– After two real world wars and one imaginary (cold) life became so peaceful and secured that they began to attach undue importance to slowing economic growth or routine trade contradictions, which – in the conditions of a happy lack of prospects for “real” wars between great powers – began to be called trade wars.

  • The current situation looks like this: a strengthened China has decided that it’s already not enough to be just a “world forge”, it is necessary to aim a blow at more. The US is not satisfied with China’s new ambitions, therefore non-market methods of eliminating competition are being applied. The data on whether China now has the ability to somehow self-provide itself with all those computer hardware products that it previously imported varies. At the same time, no one seriously considers the situation of an abrupt halt of Chinese growth. In the end, China can import not technology, but highly paid Western personnel, which can develop these technologies already in Chinese territory and exclusively for China.

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