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The Missiles in the South China Sea Should be Scarry!

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According to the reports, China has deployed surface-to-air missiles and anti-ship cruise missiles in the Spratly Islands chain that is located in the South China Sea. This is just another move that Beijing made, along with the installing the jamming equipment in the region that is there and designed to disrupt all radar systems and all attempts at communication.

Source:abc.net.au

This anti-ship cruise missile system is land-based and it is believed to be the famous YJ-12B, which is good enough and strong enough for China to strike surface vessels within the 295 nautical miles range. HQ-9B missiles are the surface-to-air-missiles that are able to reach great distances. They can engage targets at ranges of 160 nautical miles. Intelligence assessments say the missile platforms have been moved in the past thirty days, which is pretty interesting.

The White House is well-aware of what the Chinese are doing and they have stated that there will be both short-term and long-term consequences for their moves – mainly for Beijing’s militarization of the South China Sea.

What about Pentagon? Well, The Pentagon is also pretty concerned about China’s actions. They have stated that China actually benefits from America’s military presence in the region.

Source:newindianexpress.com

Dana W. White, the Defense Department spokeswoman, has explained that the US has always had concerns about Beijing militarizing these islands. She pointed out that East Asia country has always been the beneficiary of the free navigation of the sea. The US Navy has been the one that constantly guaranteed that.

When you take a look at this situation, the deployment of the missiles is a huge provocation. If they don’t move these systems from their bases, the other regional powers like the United States, Japan, and Australia are going to be angry, they are going to talk a lot less and take a lot more actions.

Source: nationalinterest.org

US and China begin negotiations aimed at avoiding a trade war

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Led by the Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer, the US delegation will be staying in Beijing until Friday, trying to iron out the kinks in the relations between the two countries caused by the mutual accusations and tariffs threats that could put a serious hamper in both economies.

US President Donald Trump is optimistic about the outcome and has tweeted on Wednesday: “Our great financial team is in China trying to negotiate a level playing field on trade!”

Unfortunately, not everyone agrees with Mr. Trump.

Michael Camunez, CEO of consultancy Monarch Global Strategies, is somewhat skeptic about a deal being made. “I don’t expect any grand bargains being struck,” he said. Camunez remarked that the US delegations don’t feel unified and that their platform is unclear. These are the weaknesses Chinese are sure to exploit.

There are several aspects of the trade deal Mr. Trump has promised to address in his campaign. The most glaring one is a huge trade deficit, reaching a staggering $375 billion last year. Even a Chinese promise of increasing its US imports by $50 billion would be considered a win for the Trump team, but the trouble is that there simply aren’t that many goods manufactured in the USA Chinese want to buy. Those that they do want, like high-tech electronics, are denied to them, due to security concerns.

Another objection Mr. Trump often used in his campaign against China is the theft of intellectual property. He was adamant that China must take steps to reduce and eventually stop this practice.

Source:scmp.com

Finally, there is the question of increased access to the Chinese market. This is the point that Chinese are most likely to agree with and allow foreign companies greater access to its market by changing regulations. There are already steps being taken in that direction, with an act allowing foreigners to own and control Chinese financial institutions, but the amount of the red tape included is so big that so far only one company has managed to meet the requirements.

It remains to be seen how Mr. Trump will react if negotiations fail and his tariffs package is put into action.

Source: money.cnn.com

China Demands U.S. Airlines Respect Chinese Law Over Taiwan

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Chinese Civil Aviation Administration has recently sent out a strongly-worded letter to United Airlines and American Airlines with a demand that both airlines obey Chinese law when making any reference to Taiwan, Hong Kong, and Macau. Any indication that any of these are independent countries must be removed from the companies’ public content.

Sources say that China has given a set timeline for these changes to be put into effect, threatening that if the demands are not met, “the relevant cyber-security authorities” will take over and deal with the matter accordingly. Considering the Chinese reputation when it comes to cyber-attacks, this can mean many things, various forms of hacking included.

Taiwan is one of the most sensitive issues for Beijing. A strict set of rules on how it may be addressed in public has been enforced for decades, and any hint of Taipei’s independence is met with serious consequences, including heavy fines and jail time.

Source:dallasnews.com

This isn’t the first time China has used coercion to force foreign companies to obey the official Communist Party stance on issues, especially those concerning Taiwan, but in recent years that number has increased significantly. Only last year, the Chinese embassy in London pressured the Man Booker International Prize to change the nationality of Wu Ming-Yi, one of the nominees for the award, from Taiwan to Taiwan, China. Public outcry has forced them to change it back to Taiwan again, but this time designating it as a province/territory.

A Marriott’s employee was fired for liking a post on Facebook by a Tibetan separatist group using the company’s account. Furthermore, Marriott made a mistake of listing Tibet and Taiwan as independent countries in their online survey, which earned them a week shutdown of their website in China.

U.S. State Department has been informed of the letter and, according to their spokesperson, “We object to Beijing dictating how U.S. firms, including airlines, organize their websites for ease of consumer use. Chinese companies’ websites operate freely and without political interference in the United States.” They have issued a complaint to the Chinese authorities. “While we seek a mutually beneficial commercial aviation relationship with China, we will consider taking appropriate action if necessary in response to unfair Chinese actions,” their spokesperson said.

The air traffic between China and the United States is heavily regulated, with American airlines allowed 140 direct flights per week, while Chinese get 180. With China set to replace the US as the world’s biggest air travel market by 2022, any threat of sanctions against foreign airliners is taken very seriously. Neither of the American companies has made a decision on how to handle the situation yet, American Airlines saying that the letter is under review and United Airlines has refused to comment. Both their sites list Taiwan as an independent country.

This is another step towards worsening relationships between Beijing and Taipei. Ever since Tsai Ing-wen became Taiwan’s president in 2016, the tensions have been rising and China has increased the number of its troops across the straits from Taiwan.

Source: foreignpolicy.com

How Will China Respond to Trump’s Tariff War?

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Some of the White House’s advocates of “America First” ideology believe that trade instruments which prevented Japan’s rise in the 1980s would do the same thing for China. However, the two countries are widely different and same measures cannot be applied in this trade war. On Tuesday, China confirmed that anti-dumping duties on sorghum that arrives from the United States would be imposed. China is the largest buyer of sorghum from the US, spending around $1 billion per year, but this may soon become a thing of the past.

Source:bbc.com

If this trade is disrupted, Trump will not receive the same support as he did in the 2016 election. A majority of the sorghum is produced in the US south, and these states are mostly republican. Here is how Trump managed to undermine trade in just a few weeks.

In March, a global tariff of 24 percent was introduced on steel imports as well as 10 percent on aluminum imports. Later that month, his administration made a case against Chinese technology which is licensed in the WTO and slates of tariffs were introduced, at $50 billion on Chinese products. Did you expect China to remain silent? They imposed tariffs on $3 billion worth of US goods. At the beginning of April, China also increased the taxes of up to 25 percent on 128 products from the United States, because of the USA-imposed steel and aluminum tariffs. Furthermore, China launched $50 billion in tariffs on a bunch of products from the United States such as cars, chemicals and soybeans and Trump threatened to introduce $100 billion in tariffs against China. Is this an endless and pointless trade war?

While the US is applying the familiar tactics – divide and rule – they might get a slap in the face from the country which economy is in a severe jump. China will not sit quietly as the US is imposing tariffs and they will return with same measures. What are some of the options for China to defend its economy against this nonsensical trade war?

Source:theguardian.com

First of all, they could defer trade and investment agreements which Trump signed when he visited China. Furthermore, banning the import of genetically modified products to China would raise the stakes and it could possibly start a wave of other countries taking the same measures. Genetically modified products are banned by many countries, and while the GMO products are stuck in the approval process in China, they will develop their GMO sector.

As we have already mentioned, disrupting the trade with China will hit blue-collar workers and farmers across the country. And they are the ones who brought Trump into power. Obstructing Chinese investment would be severe for the United States because China has other options. Hitting the US service could be beneficial because more than half of the $39 billion US surplus comes from Chinese people who are traveling and studying in the United States. Washington has already blocked visas to Bejing, so why should the Chinese government allow their tourists and people to visit the United States?

Source:qz.com

China is the largest foreign holder of the US Treasuries with $1.2 trillion of US debt. Some other foreign holders of the US debt are Japan, Hong Kong, Korea, Russia, and Brazil. With everything that has been going on, China might decide to sell the debt which would force Washington to take a different approach to cover the sustained deficits. The prolonged trade war will also undermine the US relationship with the NAFTA partners as well as the EU allies.

This trade war looks endless, and according to a growing number of reports, Trump’s administration plans to ratchet up the pressure against China. This could only backfire, and President Xi Jinping said that in a trade war “no one will emerge as a winner.” And he is right!

Source: foreignpolicyjournal.com

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