China’s Economy is Affected by Interna Criticism
The Chinese economy has been hit hard by the eight-month trade war. From the data of the CCP Customs, the impact of the trade war is emerging. In the first two months, the total value of US-China trade fell by 19.9% year-on-year, exports to the US fell by 14.1%, and imports to the US fell by 35.1%. This made the dependence on US exports in the first two months of this year drop to 16.8%, down 2.1 percentage points from the same period of the previous year.
At the same time, China’s trade surplus has decreased, to only $43.71 billion, which is $10.6 billion less than the same period last year. The Hong Kong Economic Times believes that the trade war has not ended, the global economy has been hit, and external demand has been weak. In this context, China’s trade surplus may continue to decrease. If it continues, it may affect the balance of payments of the current account.
However, the CCP is an authoritarian regime that can transfer economic losses to the people, so the economic pressure is not terrible for Beijing. What really worried Beijing was the criticism of the system.
Hu Ping, editor-in-chief of “Beijing Spring”, believes that the autocratic government can’t stand the internal opposition, and Beijing must rely on strength to suppress the different internal voices. Once the different internal sounds broke out and couldn’t be pressed, it would have to fall. The Beijing authorities have already “uncounted a lot of enemies”, and once they step down, they may be “disasters.”
Therefore, Beijing hopes to reach an agreement as soon as possible to ease the pressure and suppress different voices. The last time the two sessions of the Chinese Communist Party passed the new Foreign Investment Law, which is Beijing’s move to the United States, trying to end the trade war as soon as possible.
But this new law, in the eyes of economists, is more symbolic and does not resolve trade disputes. Derek Scissors, a researcher at the American Institute of Enterprise Studies, a conservative think tank, told VOA that “the law has no doubt in China because the party is larger than the law.”
In addition to letting the National People’s Congress put a stamp on the Foreign Investment Law, Beijing prefers to use “buy and buy” to reduce the trade deficit and promise to buy 1.2 trillion US dollars of US products in six years.
US Agriculture Secretary Sonny Perdue revealed that Beijing has put “very attractive numbers” on the purchase of agricultural products to the United States, possibly doubling or double the purchase of US agricultural products. This is consistent with China’s previous statement. Before the trade war, China’s annual import of US agricultural products was about 20 billion U.S. dollars. Now China proposes to purchase an additional 30 billion U.S. dollars of agricultural products every year.
As we all know, the US government has also accused the CCP of unfair trade policies, causing a huge trade deficit with the US and demanding that the CCP adjust its economic and trade policies. However, the CCP is very embarrassed. Every time it uses large quantities to buy American goods, it blocks the Americans’ mouths and does not change trade policies. From the past, the CCP has done so often.
However, US semiconductor manufacturers said that the Chinese concession should not count the chip exports.
The current situation is very similar to the past. The CCP still wants to use “buy, buy and buy” to reach an agreement with the United States. Therefore, Stephen K. Bannon, the former chief strategist of Trump, reminded that it is not necessary to reach a “buy, buy and buy” commodity purchase agreement with Beijing, which would make the United States “reverse wins and loses”.
Bannon said that no one had thought before that Trump could reach a negotiation, but he did it, and the president succeeded in increasing his advantage over China. However, he pointed out that if the agreement is mainly focused on commodity procurement, then this advantage will be wasted. “At this critical juncture, it is easy to win or lose.”
“Adding tariffs” hanging on the US
As everyone knows, the trade deficit is indeed an important factor for the US to launch a trade war with the CCP, but it is not the only reason. There are also “structural problems” of the CCP, such as theft of intellectual property rights and compulsory technology transfer by the CCP. These damages to the United States are even more serious.
However, this is precisely the CCP’s unwillingness to change, because it involves the CCP’s tangled and tangled interests, and it may break the foundation of the CCP. In particular, the US side has to hang a large knife on the neck of the CCP, with a supervisory enforcement mechanism. It also requires that the CCP cannot retaliate once the United States sees that the CCP has failed to meet the standards and re-adds tariffs.
Everyone knows that China is a face-to-face society. It doesn’t matter if you lose in the dark. It doesn’t matter if you lose, but you can’t lose face. Beijing fears that once it accepts these demands from the United States, it may leave a critique of opposition forces and be accused of “sinning and humiliating the country.” Therefore, Beijing is more likely to withstand the pressure of trade wars and is reluctant to make concessions. But under the tariff pressure of the Trump administration, like a toothpaste, a little bit of concession.
However, the Trump administration is also discussing whether the Chinese concession is a serious consideration of the concessions, or is it once again “unreasonable.” That is to say, the actions of Beijing, the Americans do not dare to believe completely.
Professor Xie Tian, a professor at the Aiken School of Business at the University of South Carolina, believes that as long as Trump maintains tariff sanctions, the CCP will fully accept the US request in the morning and evening. This move is very effective and Beijing has no response measures.
Xie Tian pointed out that there are also people who tend to reform within the CCP system. When the trade war has caused China’s economy to be hit hard, they may force Beijing to make reforms. Although the CCP is an authoritarian government, it can pass the evil consequences of the trade war to the people, but the internal opposition is unbearable in Beijing. Therefore, Trump’s use of tariffs to deal with the CCP is a high-profile move that will continue to change.
China’s Economy is Affected by Interna Criticism - China,Economy, CCP Customs/10
The Chinese economy has been hit hard by the eight-month trade war. From the data of the CCP Customs, the impact of the trade war is emerging.