Current affairs perspective
With the extreme pressure of US President Trump in the 11th round of the Sino -US trade negotiations, recently sacrificed a blockade of Huawei, which has initially confirmed the discussion of the author last August: According to the Xunxidd trapThe theory, the essence of the Sino -US trade war is actually not a trade war, but the first strategy of preventing China's rise.The choice of trade war and the recent scientific and technological warfare as the leading strategy is the main reason for the cost of these two wars against the United States, which is far lighter than the real guns.
If China can finally reach a peaceful coexistence with the United States through its own acceptable trade agreement.If it is not possible, it is simply stabbing the American citizens through this trade war, making it dissatisfied with the American main warfare, thereby avoiding the further attack of the American main warfare in the future, and the routine war that promotes heavy casualties or sufficient to destroy humanity.nuclear war.
In addition, the focus of the trade war is not that the United States has been harmed lower than that of the United States in the United States, but who can get to the end.Remembering the fist, but because of poor constitution, the ultimate victor is still an opponent.Therefore, economic and political toughness is the focus of this victory.In the end, Trump's intention should not have the intention of cracking down the trap of Xidid (or that its solution is to fall down), and now you can only expect the Chinese President ...Wisdom to crack this trap.
The difficulty of reaching an agreement has increased significantly
Before the 11th round of trade negotiations, the market view is that Trump is still interesting to reach an agreement with China that is beneficial to its re -election.The overall situation.However, what I want to add is that because the political ecology in the United States and China has changed, it has increased its difficulty of reaching a trade agreement, which has increased to a very difficult point.
In other words, Trump will no longer have to be harmonized by the agreement that China can give; the agreement that Trump may accept, China will not give or not, because China can give it the mostOnce the excellent agreement, once Trump accepts it, it will be criticized by the Democratic Party as weakness, but it will not help its election; on the other hand, China cannot accept an agreement that is difficult to explain to history and the people because it is to meet Trump.Essence
Due to Trump's erratic, the author cannot rule out the possibility of the United States' possibility of imposing a 25%tariff on the remaining $ 300 billion in China.But if so, Trump may be looking for death.To understand this, first of all, what China is facing is the economic impact of macro demand referred to in economics, that is, the decline in macro demand from exports, consumption, domestic investment and direct foreign investment, and suffered.Although the impact is greater than the United States, it has always been a macro demand shock. As long as China can launch sufficient stimulus demand measures, it can completely offset the future impact. Of course, China still has the risk of underestimating the impact.
On the contrary, although the impact of the United States is small, it is an Aggregate Supply Shock. No matter how good officials at the US Federal Reserve, they must always make pain choices between inflation and economic boom.EssenceOne of them was the petroleum crisis from 1973 to 1974 and 1979 to 1980. At that time, oil prices soared four times and three times in a short period of time, which caused economic recession and inflation.), If the Fed wants to press back inflation, it must accept the economic recession of three to five years. If the Fed launched an expansion monetary policy to prevent the economic recession, the inflation will rise further.Essence
A good example of macro -supply impact includes the development of the Internet and cheap imports from China in the past two or three decades. As an example, because the cheap imports from China have limited American inflation and reduced raw materials of American companies (and half a half of American companies (and half a halfThe cost of making items, so that the US economy can continue to grow rapidly on the one hand, on the one hand, there is no need to face the rising results of inflation.However, once Trump's imports of more than 300 billion U.S. dollars in China will levy 25%of tariffs. Since most of the imports are consumer goods, the US consumer price index will rise sharply, and then the inflation rate is pushed to the self -continuously through inflation expectations.The high level (as to whether it is 4%to 6%, or 7%to 9%, depending on the Fed's monetary policy): If the Federal Reserve chooses to endure economic recession, the US inflation rate can be at a lower level.The inflation rate will reach a higher level.
Regardless of the Fed's choice, the inflation rate rising, economic recession, or half of the two will seriously affect Trump's people's hope.In addition, once a 25%tariff for the remaining $ 300 billion of China's imports will be announced, the US (He and Global) stock market will decline. As U.S. shareholders have not made sufficient expectations and preparations on Sino -US trade negotiations, the decline in U.S. stocks will decline at that time will beIt will be even worse.
Therefore, even if Trump wants to impose tariffs, he should choose to open a levy after successful reelection. If he can really understand the above pros and cons, he should not make such a stupid choice so that he will become the public enemy of American consumers, shareholders and enterprises.Of course, since we cannot determine whether Trump can understand the above advantages and disadvantages, what China can do can only be prepared with both hands.
The hidden financial hazards can be established in China, so it is undefeated
In the article published by Lianhe Zaobao in August and November last year, the author has explained it with the three -way virgin round of economics. Unless trade negotiations have made good progress, the People's Bank of China must block capital to flee to avoid capital at that time.Fighting RARR; RMB fell to RARR; the stock price fell again; the vicious circle of capital fled.On the contrary, as long as the capital fled, the People's Bank of China can completely offset the impact of macro demand brought by the trade war without worrying about the decline in the RMB to the decline in the RMB.Still eternal sinners will only adopt suggestions in their ability.
Unfortunately, the senior executives of individual people still failed to quickly accept the suggestions at the time, and even the trend of the RMB and A shares at that time was really critical, and a certain number of unharmed war appeared.Fortunately, the Chinese leader reached a consensus with Trump's consensus with Trump at the last G20 summit, which made the RMB and A shares rebound from a low level. LaterBegan to further block the channels for escape from capital and launch an expansion monetary policy to offset the macro demand shock brought by the trade war, and even though the recent deterioration of trade warfare has become more violent and newly added with scientific and technological warfare.Orderly controllable (at least there is no large amount of capital to escape).
Because of this, the negative impact of the upgrade of this trade war on China is far lower than the second half of last year (that is, the bad period of the last trade war).To understand this, we must first know that the economic downturn in the second half of last year did not originate from the shrinking export, but from the sharp decline in consumption and investment, that is, the decline in the stock market, the decline in RMB, and the vicious circle of capital fugitives, causing serious negative negative negative negativesThe wealth effect and economic uncertainty make people dare to consume and enterprises dare not invest, and even a large amount of consumption shrinking and investment shelving, which greatly reduces China's economic growth through the multiplication effect.
However, as China ’s subsequent fiscal and currency stimulus policies have stabilized economic growth, and the People's Bank of China further blocked the channels of capital fugitives.Orderly reduced, the effect of negative wealth and economic uncertainty is not too great.
Of course, the addition of tariffs will cause exports to decline in the future, as well as the decline in foreign direct investment or even evacuation, which will affect the Chinese economy. However, because these changes are impact on macro demand, China only needs to launch enough finances, currencies, and attract foreign direct investment in foreign countries., And to encourage domestic stimulus measures to invest and consumption, it can completely offset the negative impact of the trade war on China's macroeconomic economy.On the contrary, if the United States forcibly impose a 25%tariff on the remaining $ 300 billion in China, the Fed will have to make pain choices in inflation and economic boom in the future.
In short, as long as the People's Bank of China seal the capital to escape from the capital, it will be able to use a strong enough expansion monetary policy to completely dispel the macro demand shock brought by the trade war and scientific and technological warfare to ensure that China will be invincible in this trade war.place.
The author is an associate professor at the Department of Economics of Nanyang University of Technology in Singapore
