Difference between revisions of "Index.php"

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President Donald Trump, right, shakes hands with Chinese President Xi Jinping during a dinner at Mar-a-Lago, Thursday, April 6, 2017, in Palm Beach, Fla.<br>AP Photo/Alex Brandon<br><br><br><br><br>US President Donald Trump and Chinese President Xi Jinping are meeting now at Trump�s Mar-a-Lago estate in Florida. Most meetings between world leaders are relatively unimportant. <br><br>This meeting is an exception, not because of whatever agreements or statements will emerge, but because of what it reveals about the current needs of the political administration of the world�s two largest economies. <br><br>The issue of unfair Chinese trade practices was a recurrent theme in Trump�s campaign, and Trump needs to show his base that he can deliver on some of his promises. <br><br>Xi wants to avoid straining US-China relations because he needs stability at home<br>ahead of the Communist Party�s National Congress at the end of the year. <br><br>While the US and China do not see eye to eye on many issues, they share a need for stability in the broad relationship right now. <br><br>The three graphics below represent some of the fundamentals of this relationship.<br><br>China Relies on Exports to the US<br><br><br>The story for China is simple. China achieved 30 years of rapid economic growth primarily by relying on exports. The US is the largest market for China�s exports. <br><br>As the chart below shows, almost 20% of all Chinese exports went to the United States in 2015 (the last year for which this data is available). <br><br><br>Mauldin Economics<br><br><br><br><br>China has reached the limits of this export-led growth and is attempting to focus more on internal consumption without drastically reducing growth, which could put jobs and, by extension, social stability at risk. <br><br>To pull this off, Xi has asserted increasingly direct control over China�s political administration, economic policies, and the People�s Liberation Army. <br><br>This year�s National Congress will be one of the key moments in Xi�s consolidation of control. Most of Xi�s political challengers have been neutralized, but Xi still must strike a delicate balance. <br><br>He cannot afford to appear weak at either the domestic or international level. He also, however, cannot afford a full-scale trade conflict with the United States. If the US significantly restricts Chinese access to the US market, the effects on China�s economy would be drastic. <br><br>This is the �trump card� lurking behind these talks: China is in no position to play hardball with the US right now. <br><br>It should be noted that disagreements over trade between these two countries are not new. The administration of former President Barack Obama was less abrasive with China than Trump�s administration, but Obama still adopted measures to protect the US market. <br><br>For example, Obama erected tariffs on Chinese tires entering the US, which severely harmed China�s tire industry. <br><br>The US Depends on China�s Cheap Imports<br><br><br><br>We have written in-depth about why the US-China trade relationship favors the US. That, however, does not mean the US can simply do whatever it wants. More than one-fifth of all US imports came from China in 2015. <br><br>The chart below breaks down those imports by product type and compares China�s share in US imports with China�s share in global exports. <br><br><br>Mauldin Economics<br><br><br><br>China relies on exports to the US, but a similar case could be made that the US is addicted to cheap imports from China. <br><br>This is why all the talk of a trade war has been overblown from the start. Many have noted that Trump has not labeled China a currency manipulator, as he promised to do during the campaign. The US could weather a US-China trade war better than China could, but that does not mean that the US would come out unscathed. <br><br>If such an economic conflict did take place, the effects would be disproportionately felt by the very class of voters that put Trump in office. <br><br>Some feared that Trump would start either a trade war or a real war with China. He has moved away from both these scenarios because they aren�t in the interests of the US or the administration. He needs to show that he can deliver wins in the US-China relationship when it comes to trade, North Korea, and the South China Sea.  <br><br>Trump is already tweeting a big game about how difficult these meetings will be, and on a certain level he is right. But both sides have an interest in coming to a mutual understanding that both Trump and Xi can use to strengthen their positions at home. <br><br>US-China relations in 2017 have much more to do with domestic constraints in both countries than with open conflict between the two. <br><br><br>Never Forget Geography<br><br><br>We often return to the below map because it is highly relevant to any discussion of US-China relations<br>. <br><br>Mauldin Economics<br><br><br><br>China is surrounded by US allies and small island chains that the US Navy could use to put China in a de facto cage if a military conflict ever arises<br>. <br><br>This map also emphasizes North Korea�s importance in negotiations between China and the US. China uses North Korea to gain leverage over the US because it can claim, with some validity, to be the country with the most influence in North Korea. <br><br>The US is concerned about North Korea<br>because of the recent actions by Kim Jong Un�s administration. This plays into China�s hands-it can offer to cooperate on the North Korea issue in exchange for US concessions on some of the points laid out above.  <br><br>The map above also shows China�s geographic challenges in trying to assert itself in its own backyard against the United States. China�s best move right now is to try to destabilize US allies in the region, preferably by increasing China�s influence at the same time.<br><br><br>China is trying this to varying degrees with countries like the Philippines and Myanmar. But so far, it has had limited success partly because China lacks sufficient military power to challenge the US and its allies in the region. <br><br>Conclusion<br><br><br>Xi and Trump�s meeting at Mar-a-Lago will be a useful barometer in determining how US-China relations will develop over the year. If the above analysis is correct, those relations, at least in 2017, should be significantly more cooperative than most expect. <br><br>The US and China have differences but also share some broader interests. As we move further into the Trump administration�s time in office, that may change-especially if Xi is successful at consolidating his rule while bringing a semblance of stability to China�s economy. <br><br>But that is a big if. For now, keeping these basic strategic realities  [https://play.google.com/store/apps/details?id=com.gameking2017.kingrabbitsubwayrunner subway runner] in mind helps make sense of what�s at stake this week in geopolitics. <br><br><br><br>Grab George Friedman's Exclusive eBook,<br>The World Explained in Maps<br><br><br><br><br>The World Explained in Maps<br><br>reveals the panorama of geopolitical landscapes influencing today's governments and global financial systems. Don't miss this chance to prepare for the year ahead with the straight facts about every major country�s and region's current geopolitical climate. You won't find political rhetoric or media hype here. <br><br>The World Explained in Maps<br>is an essential guide for every investor as 2017 takes shape. Get your copy now-free!
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The recent economic data has been positive and the investors across the world are hoping to see brighter prospects that will help the economies to recover at a faster pace. The global economy is emerging once again, giving investors another reason to smile. However, analysts observe a change in the trading patterns of two giant economies,  [https://play.google.com/store/apps/details?id=com.gameking2017.kingrabbitsubwayrunner subway runner] the US and China, in particular. Disputes over trading activities in the two nations may affect the recovery pace, predict analysts.<br><br>The US has slapped a 35% tariff on the tires imported from China. The US economy has realized that importing made-in-China goods is affecting their domestic manufacturing sector with the local manufacturers losing their jobs. Hence, the world's biggest economy is planning to cut the trade cord with the Chinese over the export issues.<br><br>Co-incidentally, the Chinese government has announced that it would probe into the option of clearing the auto parts and chickens dumped by the US in the Chinese markets. The China government has now put the ball in the US' court after the US started enforcing and tightening the trade laws with an objective to remain more competitive in the market.<br><br>Analysts fear that the implications of this trade war will harm the growing economy. According to Michael Pento, chief economist at Delta Global Advisors Inc, the US should have fair rules as far as trading with the Chinese is concerned. Transparency in trading markets will help boost the economic recovery of the country. "Our banker right now is the Chinese, and it's best not to bite your banker's hand," said Pento.<br><br>Hence, the two powerful countries involved in the trade dispute should remain alert as their impulsive actions can have a derailing affect on the world trade and none wants that to happen all over again after facing the bygone economic and emotional depression of 2008.

Revision as of 17:05, 12 March 2018

The recent economic data has been positive and the investors across the world are hoping to see brighter prospects that will help the economies to recover at a faster pace. The global economy is emerging once again, giving investors another reason to smile. However, analysts observe a change in the trading patterns of two giant economies, subway runner the US and China, in particular. Disputes over trading activities in the two nations may affect the recovery pace, predict analysts.

The US has slapped a 35% tariff on the tires imported from China. The US economy has realized that importing made-in-China goods is affecting their domestic manufacturing sector with the local manufacturers losing their jobs. Hence, the world's biggest economy is planning to cut the trade cord with the Chinese over the export issues.

Co-incidentally, the Chinese government has announced that it would probe into the option of clearing the auto parts and chickens dumped by the US in the Chinese markets. The China government has now put the ball in the US' court after the US started enforcing and tightening the trade laws with an objective to remain more competitive in the market.

Analysts fear that the implications of this trade war will harm the growing economy. According to Michael Pento, chief economist at Delta Global Advisors Inc, the US should have fair rules as far as trading with the Chinese is concerned. Transparency in trading markets will help boost the economic recovery of the country. "Our banker right now is the Chinese, and it's best not to bite your banker's hand," said Pento.

Hence, the two powerful countries involved in the trade dispute should remain alert as their impulsive actions can have a derailing affect on the world trade and none wants that to happen all over again after facing the bygone economic and emotional depression of 2008.

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