US Commerce Secretary Wilbur Ross said Monday the US government will <a href="https://www.wionews.com/world/us-to-extend-huaweis-partial-reprieve-on-supply-curbs-sources-243540">extend a reprieve given to Huawei Technologie</a>s that permits the Chinese firm to buy supplies from US companies so that it can service existing customers, even as nearly 50 of its units were being added to a US economic blacklist.

The "temporary general license," due to expire on Monday, will be extended for Huawei for 90 days, he told Fox Business Network Monday, confirming an expected decision first reported Friday by Reuters. He also said he was adding 46 <a href="https://www.wionews.com/world/huawei-launches-first-product-with-own-operating-system-242084">Huawei</a> affiliates to the Entity List, raising the total number to more than 100 Huawei entities that are covered by the restrictions.

Ross said the extension was to aid US customers, many of which operate networks in rural America.

"We're giving them a little more time to wean themselves off," Ross said.

Watch: US President Donald Trump denies business possibility with Huawei

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Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimizing disruption for its customers.

Huawei did not immediately comment Monday.

The extension, through Nov. 19, renews an agreement continuing the Chinese company's ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.

Asked what will happen in November to US companies, Ross said,&nbsp;"Everybody has had plenty of notice of it, there have been plenty of discussions with the president."

When the Commerce Department blocked Huawei from buying US goods earlier this year, it was seen as a major escalation in the Sino-US trade war.

The US government blacklisted Huawei, alleging the Chinese company is involved in activities contrary to national security or foreign policy interests.

As an example, the blacklisting order cited a pending federal criminal case concerning allegations Huawei violated US sanctions against Iran. Huawei has pleaded not guilty in the case.

The order noted that the indictment also accused Huawei of “deceptive and obstructive acts.”

At the same time, the United States says Huawei's smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.

Huawei, the world's largest telecommunications equipment maker, is still prohibited from buying American parts and components to manufacture new products without additional special licenses.

Many Huawei suppliers have requested special licenses to sell to the firm. Ross told reporters late last month he had received more than 50 applications, and that he expected to receive more. He said on Monday that there were no "specific licenses being granted for anything."

Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to US companies including Qualcomm, Intel and Micron Technology. Intel declined to comment on Monday. 
&nbsp;

US Commerce Secretary Wilbur Ross said Monday the US government will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from US companies so that it can service existing customers, even as nearly 50 of its units were being added to a US economic blacklist.

US Commerce Secretary Wilbur Ross said Monday the US government will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from US companies so that it can service existing customers, even as nearly 50 of its units were being added to a US economic blacklist. The "temporary general license," due to expire on Monday, will be extended for Huawei for 90 days, he told Fox Business Network Monday, confirming an expected decision first reported Friday by Reuters. He also said he was adding 46 Huawei affiliates to the Entity List, raising the total number to more than 100 Huawei entities that are covered by the restrictions. Ross said the extension was to aid US customers, many of which operate networks in rural America. "We're giving them a little more time to wean themselves off," Ross said. Watch: US President Donald Trump denies business possibility with Huawei × Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimizing disruption for its customers. Huawei did not immediately comment Monday. The extension, through Nov. 19, renews an agreement continuing the Chinese company's ability to maintain existing telecommunications networks and provide software updates to Huawei handsets. Asked what will happen in November to US companies, Ross said, "Everybody has had plenty of notice of it, there have been plenty of discussions with the president." When the Commerce Department blocked Huawei from buying US goods earlier this year, it was seen as a major escalation in the Sino-US trade war. The US government blacklisted Huawei, alleging the Chinese company is involved in activities contrary to national security or foreign policy interests. As an example, the blacklisting order cited a pending federal criminal case concerning allegations Huawei violated US sanctions against Iran. Huawei has pleaded not guilty in the case. The order noted that the indictment also accused Huawei of “deceptive and obstructive acts.” At the same time, the United States says Huawei's smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied. Huawei, the world's largest telecommunications equipment maker, is still prohibited from buying American parts and components to manufacture new products without additional special licenses. Many Huawei suppliers have requested special licenses to sell to the firm. Ross told reporters late last month he had received more than 50 applications, and that he expected to receive more. He said on Monday that there were no "specific licenses being granted for anything." Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to US companies including Qualcomm, Intel and Micron Technology. Intel declined to comment on Monday.

US gives Huawei another 90 days reprieve from ban amid economic blacklist

White House officials pushed back on Sunday against concerns that economic growth may be faltering, saying they saw little risk of recession despite a volatile week on global bond markets, and insisting their trade war with China was doing no damage to the United States.

Trump administration economic adviser Larry Kudlow said trade deputies from the two countries would speak within 10 days and "if those deputies meetings pan out...we are planning to have China come to the USA" to advance negotiations over ending a trade battle that has emerged as a potential risk to global economic growth.

But even with the stalks stalled for now and the threat of greater tariffs and other trade restrictions hanging over the world economy, Kudlow said on "Fox News Sunday" the United States remained "in pretty good shape."

"There is no recession in sight," Kudlow said. "Consumers are working. Their wages are rising. They are spending and they are saving."

His comments follow a rocky week in which concerns about a possible US recession began to drive financial markets and seemed to put administration officials on edge about whether the economy would hold up through the 2020 presidential election campaign. Democrats on Sunday argued Trump's trade policies are now posing an acute, short-term risk.

US stock markets tanked last week on recession fears with all three major US indexes closing down about 3% on Wednesday only to pair their losses by Friday due to expectations the European Central Bank might cut rates.

The Fed and 19 other central banks have already loosened monetary policy in what Fitch Ratings last week described as the largest shift since the 2009 recession.

Markets are expecting even more cuts to come. For a brief time last week bond investors demanded a higher interest rate on 2-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth.

Much of the uncertainty surrounds prospects for a resolution of the trade tensions between the United States and China.

The administration last week delayed the imposition of some of its planned tariffs to avoid disrupting the upcoming Christmas shopping season. President Donald Trump told reporters he had a call with China’s President Xi Jinping scheduled soon. It had not taken place as of Saturday night.

Trade adviser Peter Navarro on Sunday dismissed last week's market volatility as any sort of warning sign, saying "good" economic dynamics were encouraging investors to move money to the United States.

"We have the strongest economy in the world and money is coming here for our stock market. It's also coming here to chase yield in our bond markets," Navarro told ABC's "This Week."

For bond markets, the sort of movement Navarro described is often driven by trouble - in this case the possibility that the trade battle with China is lasting far longer than expected and becoming disruptive to business investment and growth.

Still, Navarro said the tariffs on Chinese goods, "are not hurting anybody here."

The US economy does continue to grow and add jobs each month. Retail sales in July jumped a stronger-than-expected 0.7%, the government reported last week, and Kudlow said that number showed that the main prop of the US economy is intact.

But manufacturing growth has slowed and lagging business investment has become a drag. Globally, flagging trade flows have pushed the German economy toward recession, and dampened growth in China.

A slowdown would be bad news for Trump, who is building his 2020 bid for a second term around the economy's performance. He told voters at a rally last week they had "no choice" but to vote for him to preserve their jobs and investments.

Despite talking up the economy, the president and his advisers have repeatedly accused the Fed of undermining the administration's economic policies. On Sunday, Kudlow again pointed the finger at the central bank, describing rate hikes through 2017 and 2018 as "very severe monetary restraint."

The Fed hiked rates seven times over those two years as part of a plan to restore normal monetary policy following the emergency steps taken to battle the 2007-2009 global financial crisis and recession.

Even with those steps, the Fed's target interest rate has remained well below historic norms, and policymakers have started cutting rates in response to growing global risks.

Democratic presidential candidates on Sunday joined the many economic analysts who have said the administration's sometimes erratic policies on trade -- at one point threatening tariffs on Mexico over immigration issues -- are to blame for increased uncertainty, disappointing business investment and market volatility.

“I’m afraid that this president is driving the global economy and our economy into recession," Democratic candidate Beto O’Rourke said on NBC's "Meet the Press."

Speaking to CNN's "State of the Union" on Sunday, Democratic South Bend, Indiana Mayor Pete Buttigieg criticized the administration for failing to deliver a deal with China.

"There is clearly no strategy for dealing with the trade war in a way that will lead to results for American farmers, or American consumers," he said.

White House officials pushed back on Sunday against concerns that economic growth may be faltering, saying they saw little risk of recession despite a volatile week on global bond markets, and insisting their trade war with China was doing no damage to the United States.

White House officials pushed back on Sunday against concerns that economic growth may be faltering, saying they saw little risk of recession despite a volatile week on global bond markets, and insisting their trade war with China was doing no damage to the United States. Trump administration economic adviser Larry Kudlow said trade deputies from the two countries would speak within 10 days and "if those deputies meetings pan out...we are planning to have China come to the USA" to advance negotiations over ending a trade battle that has emerged as a potential risk to global economic growth. But even with the stalks stalled for now and the threat of greater tariffs and other trade restrictions hanging over the world economy, Kudlow said on "Fox News Sunday" the United States remained "in pretty good shape." "There is no recession in sight," Kudlow said. "Consumers are working. Their wages are rising. They are spending and they are saving." His comments follow a rocky week in which concerns about a possible US recession began to drive financial markets and seemed to put administration officials on edge about whether the economy would hold up through the 2020 presidential election campaign. Democrats on Sunday argued Trump's trade policies are now posing an acute, short-term risk. US stock markets tanked last week on recession fears with all three major US indexes closing down about 3% on Wednesday only to pair their losses by Friday due to expectations the European Central Bank might cut rates. The Fed and 19 other central banks have already loosened monetary policy in what Fitch Ratings last week described as the largest shift since the 2009 recession. Markets are expecting even more cuts to come. For a brief time last week bond investors demanded a higher interest rate on 2-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth. Much of the uncertainty surrounds prospects for a resolution of the trade tensions between the United States and China. The administration last week delayed the imposition of some of its planned tariffs to avoid disrupting the upcoming Christmas shopping season. President Donald Trump told reporters he had a call with China’s President Xi Jinping scheduled soon. It had not taken place as of Saturday night. Trade adviser Peter Navarro on Sunday dismissed last week's market volatility as any sort of warning sign, saying "good" economic dynamics were encouraging investors to move money to the United States. "We have the strongest economy in the world and money is coming here for our stock market. It's also coming here to chase yield in our bond markets," Navarro told ABC's "This Week." For bond markets, the sort of movement Navarro described is often driven by trouble - in this case the possibility that the trade battle with China is lasting far longer than expected and becoming disruptive to business investment and growth. Still, Navarro said the tariffs on Chinese goods, "are not hurting anybody here." The US economy does continue to grow and add jobs each month. Retail sales in July jumped a stronger-than-expected 0.7%, the government reported last week, and Kudlow said that number showed that the main prop of the US economy is intact. But manufacturing growth has slowed and lagging business investment has become a drag. Globally, flagging trade flows have pushed the German economy toward recession, and dampened growth in China. A slowdown would be bad news for Trump, who is building his 2020 bid for a second term around the economy's performance. He told voters at a rally last week they had "no choice" but to vote for him to preserve their jobs and investments. Despite talking up the economy, the president and his advisers have repeatedly accused the Fed of undermining the administration's economic policies. On Sunday, Kudlow again pointed the finger at the central bank, describing rate hikes through 2017 and 2018 as "very severe monetary restraint." The Fed hiked rates seven times over those two years as part of a plan to restore normal monetary policy following the emergency steps taken to battle the 2007-2009 global financial crisis and recession. Even with those steps, the Fed's target interest rate has remained well below historic norms, and policymakers have started cutting rates in response to growing global risks. Democratic presidential candidates on Sunday joined the many economic analysts who have said the administration's sometimes erratic policies on trade -- at one point threatening tariffs on Mexico over immigration issues -- are to blame for increased uncertainty, disappointing business investment and market volatility. “I’m afraid that this president is driving the global economy and our economy into recession," Democratic candidate Beto O’Rourke said on NBC's "Meet the Press." Speaking to CNN's "State of the Union" on Sunday, Democratic South Bend, Indiana Mayor Pete Buttigieg criticized the administration for failing to deliver a deal with China. "There is clearly no strategy for dealing with the trade war in a way that will lead to results for American farmers, or American consumers," he said.

White House says no recession in sight, pushes China trade talks

Police in Southeast China's Fujian province have launched an investigation after a FedEx parcel sent from the United States was found to contain a handgun, the latest Chinese-related problem to affect the US&nbsp;package delivery firm.

Amid tense Sino-US&nbsp;relations, Memphis-based FedEx is already facing scrutiny in China on suspicion it illegally held back more than 100 Huawei packages after Washington in May placed the Chinese telecoms giant on a blacklist that effectively blocks US firms from doing business with it.

Police in the Jin'an district of Fuzhou, the capital of Fujian, said on Sunday on Weibo, a micro-blogging platform similar to Twitter, that an unidentified sporting goods company had received the parcel sent from a US customer via FedEx.

"Inside was a gun," the Jin'an police said on their official Weibo account. "At the present time, the Fuzhou police have already impounded the gun and started an investigation into the case."

FedEx, which has apologised for multiple incidents of Huawei packages being diverted, did not immediately respond to a request for comment on the Fuzhou incident outside of normal business hours.

Police in Southeast China's Fujian province have launched an investigation after a FedEx parcel sent from the United States was found to contain a handgun, the latest Chinese-related problem to affect the US package delivery firm.

Police in Southeast China's Fujian province have launched an investigation after a FedEx parcel sent from the United States was found to contain a handgun, the latest Chinese-related problem to affect the US package delivery firm. Amid tense Sino-US relations, Memphis-based FedEx is already facing scrutiny in China on suspicion it illegally held back more than 100 Huawei packages after Washington in May placed the Chinese telecoms giant on a blacklist that effectively blocks US firms from doing business with it. Police in the Jin'an district of Fuzhou, the capital of Fujian, said on Sunday on Weibo, a micro-blogging platform similar to Twitter, that an unidentified sporting goods company had received the parcel sent from a US customer via FedEx. "Inside was a gun," the Jin'an police said on their official Weibo account. "At the present time, the Fuzhou police have already impounded the gun and started an investigation into the case." FedEx, which has apologised for multiple incidents of Huawei packages being diverted, did not immediately respond to a request for comment on the Fuzhou incident outside of normal business hours.

Chinese police investigate FedEx package containing handgun

Chinese factory price inflation fell below zero for the first time in three years, official data showed Friday, the latest sign of weakening demand amid mounting trade tensions with the US.

The producer price index (PPI) -- an important barometer of the industrial sector that measures the cost of goods at the factory gate -- dropped 0.3 per cent year-on-year in July, down from zero per cent in June, according to the National Bureau of Statistics (NBS).

A slowdown in factory gate inflation reflects sluggish demand, while a turn to deflation could dent corporate profits and drag on the world's number two economy, which in turn could lead to a drop in prices globally.

The reading marks the first deflation since August 2016, and fell short of the -0.1 per cent forecast in a Bloomberg News survey.

The petroleum and natural gas mining sector led the drop, while a contraction in petroleum, coal and other fuel processing also widened, NBS official Dong Yaxiu said in a statement.

"The profitability for industrial firms will take a hit and the broader outlook will continue to slump," said Edward Moya, analyst at OANDA.

Additional monetary loosening is expected as the central People's Bank of China will put more weight on tackling factory-gate deflation, Julian Evans-Pritchard of Capital Economics wrote in a research note.

China's consumer price index (CPI) -- a gauge of retail inflation -- rose 2.8 per cent, up from 2.7 per cent in May, marking the fastest pace since February 2018.

Pork prices rose as supply was "slightly shortened" by the African swine fever epidemic while hot summer weather has led to decreased production in eggs, thus driving prices higher, according to Dong.

Chinese and US negotiators met in Shanghai in July in a bid to patch up the trade rift hurting the world's top two economies.&nbsp;

But tensions have mounted rapidly since then, as US President Donald Trump vowed to impose fresh tariffs on $300 billion in Chinese goods from September 1.

Chinese factory price inflation fell below zero for the first time in three years, official data showed Friday, the latest sign of weakening demand amid mounting trade tensions with the US.

Chinese factory price inflation fell below zero for the first time in three years, official data showed Friday, the latest sign of weakening demand amid mounting trade tensions with the US. The producer price index (PPI) -- an important barometer of the industrial sector that measures the cost of goods at the factory gate -- dropped 0.3 per cent year-on-year in July, down from zero per cent in June, according to the National Bureau of Statistics (NBS). A slowdown in factory gate inflation reflects sluggish demand, while a turn to deflation could dent corporate profits and drag on the world's number two economy, which in turn could lead to a drop in prices globally. The reading marks the first deflation since August 2016, and fell short of the -0.1 per cent forecast in a Bloomberg News survey. The petroleum and natural gas mining sector led the drop, while a contraction in petroleum, coal and other fuel processing also widened, NBS official Dong Yaxiu said in a statement. "The profitability for industrial firms will take a hit and the broader outlook will continue to slump," said Edward Moya, analyst at OANDA. Additional monetary loosening is expected as the central People's Bank of China will put more weight on tackling factory-gate deflation, Julian Evans-Pritchard of Capital Economics wrote in a research note. China's consumer price index (CPI) -- a gauge of retail inflation -- rose 2.8 per cent, up from 2.7 per cent in May, marking the fastest pace since February 2018. Pork prices rose as supply was "slightly shortened" by the African swine fever epidemic while hot summer weather has led to decreased production in eggs, thus driving prices higher, according to Dong. Chinese and US negotiators met in Shanghai in July in a bid to patch up the trade rift hurting the world's top two economies. But tensions have mounted rapidly since then, as US President Donald Trump vowed to impose fresh tariffs on $300 billion in Chinese goods from September 1.

China factory price deflates as demand weakens

Weaponising Yuan: Beijing's double-edged sword

<a href="https://www.wionews.com/business-%26-economy/gold-prices-slip-for-sixth-session-as-dollar-trades-near-1-year-high-153068">Gold prices</a> firmed on Tuesday ahead of a meeting of the <a href="https://www.wionews.com/business-economy/nasdaq-ends-at-record-high-dollar-falls-as-us-fed-signals-possible-rate-cut-234814">US Federal Reserve</a> where it is expected to signal how big an interest rate cut the world's biggest economy could take.

Spot gold was up 0.1 per cent to1,427.85 dollars per ounce as of 0954 GMT. US gold futures were up 0.6 per cent at1,428.30 dollars per ounce.

"The big question is what the tone of the Fed will be tomorrow. Interest rates are overwhelmingly likely to be cut. It's just a question of by how much," said Mitsubishi analyst Jonathan Butler.&nbsp;

"Gold is still at 6-year highs. Although it has been close to1,450 dollars recently, it seems to have found a level around1,425 dollars."

Investors awaited cues on the Fed's two-day monetary policy meeting beginning later in the session, which is expected to result in a 25-basis point cut in interest rates. If implemented, it would be the central bank's first rate cut in a decade.

The bank would be joining peers such as the European Central Bank in signalling the need for rate cuts. The <a href="https://www.wionews.com/business-economy/asia-stocks-higher-ahead-of-fed-pound-pressured-by-fresh-brexit-pain-239341">Bank of Japan</a> has also said it would ease "without hesitation" if the economy lost momentum in order to achieve its inflation target.

Gains in the dollar index, which touched a two-month high of 98.206 on the back of a weaker sterling, helped cap the rise in bullion.

"Liquidity is still thin as traders seem to be holding back before the Fed gives its views on monetary policy," said Benjamin Lu, an analyst at Phillip Futures, adding that a firm dollar was putting pressure on gold prices.&nbsp;

US-China trade negotiations, which begin in Shanghai on Tuesday, were also in the spotlight, although expectations for progress during the two-day meeting are low, with the markets hoping the two sides can at least detail commitments for goodwill gestures.&nbsp;

On the technical side, spot gold remains neutral in a range of 1,412-1,427 dollars per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.&nbsp;

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.83 per cent to 824.89 tonnes on Monday from Friday.

Among other precious metals, silver rose 0.2 per cent to16.49 dollars, while platinum edged 0.2 per cent higher to 877.29dollars.

Palladium dropped 0.5 per cent to1,545.31 dollars per ounce, after touching a near two-week high in the previous session.

Gold prices firmed on Tuesday ahead of a meeting of the US Federal Reserve where it is expected to signal how big an interest rate cut the world's biggest economy could take.

Gold prices firmed on Tuesday ahead of a meeting of the US Federal Reserve where it is expected to signal how big an interest rate cut the world's biggest economy could take. Spot gold was up 0.1 per cent to1,427.85 dollars per ounce as of 0954 GMT. US gold futures were up 0.6 per cent at1,428.30 dollars per ounce. "The big question is what the tone of the Fed will be tomorrow. Interest rates are overwhelmingly likely to be cut. It's just a question of by how much," said Mitsubishi analyst Jonathan Butler. "Gold is still at 6-year highs. Although it has been close to1,450 dollars recently, it seems to have found a level around1,425 dollars." Investors awaited cues on the Fed's two-day monetary policy meeting beginning later in the session, which is expected to result in a 25-basis point cut in interest rates. If implemented, it would be the central bank's first rate cut in a decade. The bank would be joining peers such as the European Central Bank in signalling the need for rate cuts. The Bank of Japan has also said it would ease "without hesitation" if the economy lost momentum in order to achieve its inflation target. Gains in the dollar index, which touched a two-month high of 98.206 on the back of a weaker sterling, helped cap the rise in bullion. "Liquidity is still thin as traders seem to be holding back before the Fed gives its views on monetary policy," said Benjamin Lu, an analyst at Phillip Futures, adding that a firm dollar was putting pressure on gold prices. US-China trade negotiations, which begin in Shanghai on Tuesday, were also in the spotlight, although expectations for progress during the two-day meeting are low, with the markets hoping the two sides can at least detail commitments for goodwill gestures. On the technical side, spot gold remains neutral in a range of 1,412-1,427 dollars per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.83 per cent to 824.89 tonnes on Monday from Friday. Among other precious metals, silver rose 0.2 per cent to16.49 dollars, while platinum edged 0.2 per cent higher to 877.29dollars. Palladium dropped 0.5 per cent to1,545.31 dollars per ounce, after touching a near two-week high in the previous session.

Gold firms ahead of expected Federal interest rate cut

US President Donald Trump ripped into China on Tuesday after <a href="https://www.wionews.com/world/china-us-trade-talks-to-restart-after-g20-tariff-truce-239483">US negotiators arrived in Shanghai </a>to resurrect talks aimed at ending a year-long trade war between the world's two top economies.

Trump took to Twitter to slam China hours after top US officials landed in the financial hub for the first face-to-face discussions since the US leader agreed to a trade war truce with Chinese President Xi Jinping in June.

"My team is negotiating with them now, but they always change the deal in the end to their benefit," Trump tweeted.

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..My team is negotiating with them now, but they always change the deal in the end to their benefit. They should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe. Then they could make a GREAT deal, like in past 30 years, and continue
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1156160004132675584?ref_src=twsrc%5Etfw">July 30, 2019</a></blockquote>
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Trump had accused China of reneging on its commitments before previous talks broke down in May.&nbsp;

This time the US leader said Beijing was supposed to start buying US agricultural products but they have shown "no signs that they are doing so".

"That is the problem with China, they just don't come through," he said.

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China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years....
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1156159999833513984?ref_src=twsrc%5Etfw">July 30, 2019</a></blockquote>
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Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade, in a tense stand-off centred on demands for China to curb the alleged theft of American technology and provide a level playing field to US companies.

<a href="https://www.wionews.com/world/us-trade-negotiators-will-travel-to-china-in-very-near-future-official-235396">US Trade Representative Robert Lighthizer </a>and Treasury Secretary Steven Mnuchin did not talk to reporters after arriving in the Chinese financial hub on Tuesday.&nbsp;

A motorcade believed to be carrying the US officials later headed to the city's famous Peace hotel, where they were expected to meet Chinese officials for dinner.

The US officials are due to hold formal talks with Vice Premier Liu He on Wednesday.

Trump's Twitter tirade will reinforce already low expectations that this week's negotiations will lead to a major breakthrough.

US election gambit

Trump said last week he believed Beijing was hoping to delay a deal until after the US presidential election in November 2020, and on Tuesday the Republican said China could wait to see if a Democratic opponent wins the vote and "continue to ripoff the USA".

"The problem with them waiting, however, is that if &amp; when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all," he said.

"We have all the cards, our past leaders never got it!"

Days before the Shanghai meeting, Trump threatened to pull recognition of China's developing nation status at the World Trade Organization -- prompting an irritable reply from Beijing about the "arrogance and selfishness" of the US.

The US leader has also angered the Chinese side by claiming the slowing economy is forcing them to make a trade deal, and blacklisting telecom giant Huawei over national security concerns.

In a commentary on Tuesday, state news agency Xinhua admitted relations were "strained" and called for the US to "treat China with due respect if it wants a trade deal".

New city

Holding talks in Shanghai instead of Beijing was seen as a nod to a time of better relations, as the city was the home of the 1972 Shanghai Communique -- an important step in building diplomatic relations between the US and China.

Chinese Commerce Minister Zhong Shan, who is seen as a tough negotiator, is expected to join Liu on the Chinese side.

But both sides were busy lowering expectations in the run-up to talks.&nbsp;

Mnuchin told CNBC last week there were still "a lot of issues" while Chinese state-run daily The Global Times wrote that it is "widely believed that trade talks will take a long time".

There was no sign of the rhetoric letting up either, with the China Daily newspaper's Tuesday editorial saying "the US should give its go-to tactic of maximum pressure a couple of days off as it has proven ineffective against China".

It pointed to an announcement at the weekend that China would buy more US agricultural products including pork, cotton and soybean as a sign of China's "goodwill" -- and called for the US to "reciprocate if it wants any progress to be made".

US President Donald Trump ripped into China on Tuesday after US negotiators arrived in Shanghai to resurrect talks aimed at ending a year-long trade war between the world's two top economies.

US President Donald Trump ripped into China on Tuesday after US negotiators arrived in Shanghai to resurrect talks aimed at ending a year-long trade war between the world's two top economies. Trump took to Twitter to slam China hours after top US officials landed in the financial hub for the first face-to-face discussions since the US leader agreed to a trade war truce with Chinese President Xi Jinping in June. "My team is negotiating with them now, but they always change the deal in the end to their benefit," Trump tweeted. ..My team is negotiating with them now, but they always change the deal in the end to their benefit. They should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe. Then they could make a GREAT deal, like in past 30 years, and continue — Donald J. Trump (@realDonaldTrump) July 30, 2019 × Trump had accused China of reneging on its commitments before previous talks broke down in May. This time the US leader said Beijing was supposed to start buying US agricultural products but they have shown "no signs that they are doing so". "That is the problem with China, they just don't come through," he said. China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years.... — Donald J. Trump (@realDonaldTrump) July 30, 2019 × Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade, in a tense stand-off centred on demands for China to curb the alleged theft of American technology and provide a level playing field to US companies. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin did not talk to reporters after arriving in the Chinese financial hub on Tuesday. A motorcade believed to be carrying the US officials later headed to the city's famous Peace hotel, where they were expected to meet Chinese officials for dinner. The US officials are due to hold formal talks with Vice Premier Liu He on Wednesday. Trump's Twitter tirade will reinforce already low expectations that this week's negotiations will lead to a major breakthrough. US election gambit Trump said last week he believed Beijing was hoping to delay a deal until after the US presidential election in November 2020, and on Tuesday the Republican said China could wait to see if a Democratic opponent wins the vote and "continue to ripoff the USA". "The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all," he said. "We have all the cards, our past leaders never got it!" Days before the Shanghai meeting, Trump threatened to pull recognition of China's developing nation status at the World Trade Organization -- prompting an irritable reply from Beijing about the "arrogance and selfishness" of the US. The US leader has also angered the Chinese side by claiming the slowing economy is forcing them to make a trade deal, and blacklisting telecom giant Huawei over national security concerns. In a commentary on Tuesday, state news agency Xinhua admitted relations were "strained" and called for the US to "treat China with due respect if it wants a trade deal". New city Holding talks in Shanghai instead of Beijing was seen as a nod to a time of better relations, as the city was the home of the 1972 Shanghai Communique -- an important step in building diplomatic relations between the US and China. Chinese Commerce Minister Zhong Shan, who is seen as a tough negotiator, is expected to join Liu on the Chinese side. But both sides were busy lowering expectations in the run-up to talks. Mnuchin told CNBC last week there were still "a lot of issues" while Chinese state-run daily The Global Times wrote that it is "widely believed that trade talks will take a long time". There was no sign of the rhetoric letting up either, with the China Daily newspaper's Tuesday editorial saying "the US should give its go-to tactic of maximum pressure a couple of days off as it has proven ineffective against China". It pointed to an announcement at the weekend that China would buy more US agricultural products including pork, cotton and soybean as a sign of China's "goodwill" -- and called for the US to "reciprocate if it wants any progress to be made".

Donald Trump tears into China on Twitter as trade talks resume

China outlined plans to build a modern, high-tech army in a<a href="https://www.wionews.com/world/us-thaad-system-deployment-to-south-korea-undermines-regional-strategic-balance-says-china-238130"> national defence plan</a> published Wednesday, as it accused Washington of undermining global strategic stability and warned against Taiwanese independence.

The first comprehensive white paper since 2012 offers insight into the world's largest army as it scrambles to catch up to America's formidable firepower as tensions deepen between the two powers.

Beijing is firm on the self-ruled <a href="https://www.wionews.com/world/china-to-impose-sanctions-on-us-firms-in-taiwan-arms-sale-235357">island of Taiwan</a> -- which China views as its own territory -- and makes "no promise to renounce the use of force" in bringing it back into the fold.

"China must be and will be reunited," the paper reads.

It says Taiwan "separatists" are the biggest threat to the peaceful reunification of the country.

"The PLA will resolutely defeat anyone attempting to separate Taiwan from China," it says.

"This hostile signalling of resolve may backfire within Taiwan by exacerbating anxieties that are already heightened by the clear failures of the model of 'one country, two systems' in Hong Kong," Kania said.

"The United States is clearly the intended audience for this signalling of red lines as well."

Watch Video:

<div class="videoWrapper trancodeVideo"><iframe src="https://www.wionews.com/videos/gravitastaiwan-a-us-china-flashpoint-236522/embed" width="560" height="350" style="width:100%;max-width:560px;" class="includeVideo" frameborder="0" autoplay=1 allowfullscreen></iframe></div>

The Mainland Affairs Council, Taiwan's top policy-making body on China, slammed the white paper for making "absurd remarks".

"We firmly oppose and condemn Beijing authorities for using cross-strait issues as a pretext for military expansion and threatening to use force against Taiwan," it said in a statement.

And with pro-democracy protests raging in Hong Kong, China's defence ministry spokesman Wu Qian cited a law stipulating that the PLA could be deployed to maintain public order if requested by the city's semi-autonomous government.

"International strategic competition is on the rise," the document says, adding that the United States has adjusted its national security and defence strategies and adopted "unilateral policies".

The US "has provoked and intensified competition among major countries, significantly increased its defence expenditure, pushed for additional capacity in nuclear, outer space, cyber and missile defence, and undermined global strategic stability".

The plan calls for more cutting-edge technology in the People's Liberation Army (PLA) arsenal, admitting it "still lags far behind the world's leading militaries".

War is evolving towards "intelligent" combat, the paper says, citing a growing use of AI, big data, cloud computing and "new and high-tech military technologies based on IT".

China's defence spending is second only to the United States, and it said earlier this year it planned to raise it by 7.5 per cent in 2019, though the increase in expenditure has slowed as the economy has cooled in recent years.

The PLA has been focused on catching up with technology used by armed forces in the US and western Europe, and is reportedly building a third aircraft carrier as well as developing a new generation of destroyer vessels, stealth fighter jets and ballistic missiles.

The US-China trade war is pushing Beijing to ramp up efforts to develop its own technological innovations, which would benefit the PLA, said Lyle Morris, senior policy analyst at the RAND Corporation think tank.

"The PLA still lags behind the US military in most indicators of technological superiority, but is closing the gap fast," Morris said. 
&nbsp;

China outlined plans to build a modern, high-tech army in a national defence plan published Wednesday, as it accused Washington of undermining global strategic stability and warned against Taiwanese independence.

China outlined plans to build a modern, high-tech army in a national defence plan published Wednesday, as it accused Washington of undermining global strategic stability and warned against Taiwanese independence. The first comprehensive white paper since 2012 offers insight into the world's largest army as it scrambles to catch up to America's formidable firepower as tensions deepen between the two powers. Beijing is firm on the self-ruled island of Taiwan -- which China views as its own territory -- and makes "no promise to renounce the use of force" in bringing it back into the fold. "China must be and will be reunited," the paper reads. It says Taiwan "separatists" are the biggest threat to the peaceful reunification of the country. "The PLA will resolutely defeat anyone attempting to separate Taiwan from China," it says. "This hostile signalling of resolve may backfire within Taiwan by exacerbating anxieties that are already heightened by the clear failures of the model of 'one country, two systems' in Hong Kong," Kania said. "The United States is clearly the intended audience for this signalling of red lines as well." Watch Video: The Mainland Affairs Council, Taiwan's top policy-making body on China, slammed the white paper for making "absurd remarks". "We firmly oppose and condemn Beijing authorities for using cross-strait issues as a pretext for military expansion and threatening to use force against Taiwan," it said in a statement. And with pro-democracy protests raging in Hong Kong, China's defence ministry spokesman Wu Qian cited a law stipulating that the PLA could be deployed to maintain public order if requested by the city's semi-autonomous government. "International strategic competition is on the rise," the document says, adding that the United States has adjusted its national security and defence strategies and adopted "unilateral policies". The US "has provoked and intensified competition among major countries, significantly increased its defence expenditure, pushed for additional capacity in nuclear, outer space, cyber and missile defence, and undermined global strategic stability". The plan calls for more cutting-edge technology in the People's Liberation Army (PLA) arsenal, admitting it "still lags far behind the world's leading militaries". War is evolving towards "intelligent" combat, the paper says, citing a growing use of AI, big data, cloud computing and "new and high-tech military technologies based on IT". China's defence spending is second only to the United States, and it said earlier this year it planned to raise it by 7.5 per cent in 2019, though the increase in expenditure has slowed as the economy has cooled in recent years. The PLA has been focused on catching up with technology used by armed forces in the US and western Europe, and is reportedly building a third aircraft carrier as well as developing a new generation of destroyer vessels, stealth fighter jets and ballistic missiles. The US-China trade war is pushing Beijing to ramp up efforts to develop its own technological innovations, which would benefit the PLA, said Lyle Morris, senior policy analyst at the RAND Corporation think tank. "The PLA still lags behind the US military in most indicators of technological superiority, but is closing the gap fast," Morris said.

China will be reunited, PLA will defeat anyone attempting to separate Taiwan: National defence plan

US President Donald Trump on Monday praised Beijing's handling of pro-democracy protests in Hong Kong, a day after suspected triad gangsters attacked demonstrators in a bloody escalation.

Hong Kong has been plunged into its worst crisis in recent history by weeks of marches, which drew millions, and sporadic violent confrontations between police and pockets of hardcore protesters.

The demonstrations have evolved into a call for democratic reforms, universal suffrage and a halt to sliding freedoms which China had promised to respect in the semi-autonomous territory after its handover from Britain in 1997.

"I know that's a very important situation for President Xi" Jinping of China, Trump said during a White House meeting with Pakistan's Prime Minister Imran Khan.

When a reporter suggested that the Hong Kong and Chinese governments were ignoring violence against the protesters, Trump replied that "I think it's been relatively nonviolent."

Hospital authorities said 45 people were wounded in the attack late Sunday which led to the arrest of six men, some of whom police alleged had triad gangster backgrounds.

"China could stop them if they wanted", Trump said of the protests.&nbsp;

"I'm not involved in it very much but I think President Xi of China has acted responsibly, very responsibly," said Trump, who last year began a trade war with China that has led to tariffs on hundreds of billions of dollars in mutual trade, a dispute still unsettled.

After Sunday's violence critics accused Hong Kong police of responding too slowly.

"They've been out there protesting for a long time. I've never seen protests like it where you have that many people. It looks like two million people," Trump said.

"Those are big protests... I hope that President Xi will do the right thing, but it has been going on a long time, there's no question."

Hardcore protesters have stormed Hong Kong's legislature, and on Sunday some demonstrators targeted with eggs and graffiti China's representative office in the financial hub, which China's foreign ministry called "absolutely intolerable."

US President Donald Trump on Monday praised Beijing's handling of pro-democracy protests in Hong Kong, a day after suspected triad gangsters attacked demonstrators in a bloody escalation.

US President Donald Trump on Monday praised Beijing's handling of pro-democracy protests in Hong Kong, a day after suspected triad gangsters attacked demonstrators in a bloody escalation. Hong Kong has been plunged into its worst crisis in recent history by weeks of marches, which drew millions, and sporadic violent confrontations between police and pockets of hardcore protesters. The demonstrations have evolved into a call for democratic reforms, universal suffrage and a halt to sliding freedoms which China had promised to respect in the semi-autonomous territory after its handover from Britain in 1997. "I know that's a very important situation for President Xi" Jinping of China, Trump said during a White House meeting with Pakistan's Prime Minister Imran Khan. When a reporter suggested that the Hong Kong and Chinese governments were ignoring violence against the protesters, Trump replied that "I think it's been relatively nonviolent." Hospital authorities said 45 people were wounded in the attack late Sunday which led to the arrest of six men, some of whom police alleged had triad gangster backgrounds. "China could stop them if they wanted", Trump said of the protests. "I'm not involved in it very much but I think President Xi of China has acted responsibly, very responsibly," said Trump, who last year began a trade war with China that has led to tariffs on hundreds of billions of dollars in mutual trade, a dispute still unsettled. After Sunday's violence critics accused Hong Kong police of responding too slowly. "They've been out there protesting for a long time. I've never seen protests like it where you have that many people. It looks like two million people," Trump said. "Those are big protests... I hope that President Xi will do the right thing, but it has been going on a long time, there's no question." Hardcore protesters have stormed Hong Kong's legislature, and on Sunday some demonstrators targeted with eggs and graffiti China's representative office in the financial hub, which China's foreign ministry called "absolutely intolerable."

Donald Trump praises China response to Hong Kong protests

US President Donald Trump on Thursday accused China of backsliding on promises to increase purchases of American farm exports.

The president's latest salvo on Twitter comes the same week that <a href="https://www.wionews.com/world/after-trump-xi-g20-meeting-us-china-resume-talks-to-resolve-trade-war-234508">US and Chinese trade officials</a> had their first contact in months in an effort to revive negotiations that nearly collapsed in May.

Trump and his Chinese counterpart Xi Jinping met last month on the sidelines of the Group of 20 summit&nbsp;in Japan, agreeing to cease further hostilities while the talks resumed.

"Mexico is doing great at the Border, but <a href="https://www.wionews.com/world/chinas-2019-growth-seen-slowing-to-62-per-cent-as-trade-war-weighs-reuters-poll-234697">China</a> is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would," Trump said Thursday on Twitter.&nbsp;

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<blockquote class="twitter-tweet" data-lang="en">
Mexico is doing great at the Border, but China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1149318492711264257?ref_src=twsrc%5Etfw">July 11, 2019</a></blockquote>
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"Hopefully they will start soon!"

Following the Osaka summit, Trump announced that, in return for Washington's pledge to suspend a planned tariff increase on $300 billion in Chinese imports, Beijing had offered to buy "a tremendous amount of food and agriculture product" from the United States.

Hopes for a trade deal with China have lifted spirits on Wall Street but lingering trade conflicts have weighed on US business sentiment and are one of the main dangers on the horizon for the United States, economists say.

Reducing America's soaring trade deficit with China has long been a principal aim in Trump's trade battle with Beijing, which he also accuses of stealing American technology and unfairly intervening in markets.

Since last year, the two countries have traded tariffs on more than $360 billion in two-way trade.

The US global trade deficit has expanded this year but has fallen with China while rising with Mexico, pointing to the realignment of commercial relationships.

Trump has offered billions in aid to buy out US farms badly damaged in the US-China trade war. US soy exports collapsed last year, virtually wiping out foreign markets farmers had spent years cultivating.

Bill Nelson, an analyst at Doane Advisory Services, told AFP the major Chinese purchases that markets had been expecting had so far failed to materialize.

Chinese soybean purchases zoomed higher in the first quarter of the year to 9.5 million tons, according to official numbers, making up for the sales drought at the end of 2018.

But they have since fallen off sharply, with few major sales recorded since the end of last month.

"China is not making major purchases, certainly not since the Xi meeting," Nelson said.&nbsp;

"Trump implied China would be immediately out there and sales would be going to happen right away. This is not what has occurred."

US President Donald Trump on Thursday accused China of backsliding on promises to increase purchases of American farm exports. The president's latest salvo on Twitter comes the same week that US and Chinese trade officials had their first contact in months in an effort to revive negotiations that nearly collapsed in May.

US President Donald Trump on Thursday accused China of backsliding on promises to increase purchases of American farm exports. The president's latest salvo on Twitter comes the same week that US and Chinese trade officials had their first contact in months in an effort to revive negotiations that nearly collapsed in May. Trump and his Chinese counterpart Xi Jinping met last month on the sidelines of the Group of 20 summit in Japan, agreeing to cease further hostilities while the talks resumed. "Mexico is doing great at the Border, but China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would," Trump said Thursday on Twitter. Mexico is doing great at the Border, but China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon! — Donald J. Trump (@realDonaldTrump) July 11, 2019 × "Hopefully they will start soon!" Following the Osaka summit, Trump announced that, in return for Washington's pledge to suspend a planned tariff increase on $300 billion in Chinese imports, Beijing had offered to buy "a tremendous amount of food and agriculture product" from the United States. Hopes for a trade deal with China have lifted spirits on Wall Street but lingering trade conflicts have weighed on US business sentiment and are one of the main dangers on the horizon for the United States, economists say. Reducing America's soaring trade deficit with China has long been a principal aim in Trump's trade battle with Beijing, which he also accuses of stealing American technology and unfairly intervening in markets. Since last year, the two countries have traded tariffs on more than $360 billion in two-way trade. The US global trade deficit has expanded this year but has fallen with China while rising with Mexico, pointing to the realignment of commercial relationships. Trump has offered billions in aid to buy out US farms badly damaged in the US-China trade war. US soy exports collapsed last year, virtually wiping out foreign markets farmers had spent years cultivating. Bill Nelson, an analyst at Doane Advisory Services, told AFP the major Chinese purchases that markets had been expecting had so far failed to materialize. Chinese soybean purchases zoomed higher in the first quarter of the year to 9.5 million tons, according to official numbers, making up for the sales drought at the end of 2018. But they have since fallen off sharply, with few major sales recorded since the end of last month. "China is not making major purchases, certainly not since the Xi meeting," Nelson said. "Trump implied China would be immediately out there and sales would be going to happen right away. This is not what has occurred."

China fails to buy agricultural goods as promised: Donald Trump

The United States and China have reached a truce in their escalating trade war. Following a meeting between US president, Donald Trump and his Chinese counterpart, Xi Jinping at the G20, the two leaders agreed to renew talks. Tariffs, which began to be introduced by both sides on an array of imports in 2018, will not be raised further.

But a number of tariffs remain and trade relations are still far from normal between the world’s two largest economies. This may not be a cold war. But it is a great power rivalry focusing on technological supremacy and which side has the best development model.

China’s economy is slowing down and recent tariffs from the US on its exports have not helped. China’s growth rate declined from 6.6 per cent&nbsp;in 2018 to 6.4 per cent in the first quarter of 2019. But in the long term, the pressure exerted by Trump’s administration will strengthen China. It will help China speed up its efforts to restructure its economy, focus more on innovation, and also boost the country’s national pride.

Technological advancements are central to empire building and the rise of new powers, with steam power and then electronic technologies driving previous British and American empires. The fourth industrial revolution will shift international competition away from labour, territory, nuclear arms, and soft power to new technology including robotics, artificial intelligence (AI), and wireless services.

Wake up call

Until recently, US policymakers operated under the assumption that the US was the world’s technological superpower and Silicon Valley was the globe’s innovation hotbed. China was regarded as a copycat that builds clumsy clones of American technologies or uses its big state-owned enterprises to purchase innovative US companies and absorb their intellectual property and know-how.

But when it comes to 5G – the next generation of superfast internet technology – the US has lagged behind. No American company has comparable wireless equipment to Huawei. This spurred Trump to wage war on the Chinese tech company. First he declared a national emergency, banning sales and the use of telecoms equipment deemed to pose “unacceptable risks”. Then he lobbied allies to do the same.

US-based companies followed suit. First, Google removed Huawei from its Android service, then the Wi-Fi Alliance, Bluetooth, and others followed suit.

Huawei’s 5G capabilities and the fallout from them can be seen as China’s Sputnik moment. In the same way the Soviet Union was the first to launch a satellite into space, creating the appearance that the Soviets were winning the engineering challenge of the day, China is outpacing other countries in the development of 5G today. China realises the dangers of technological dependence, economic entanglement, and scientific reliance on the US.

Innovation revolution

Huawei is a product of the Chinese government’s industrial policy strategy. The vision to move up the economic value chain from a low-end manufacturer to a global innovation leader led to the launch of its Made In China 2025 initiative and an Artificial Intelligence Development Plan to channel resources into strategic sectors such as computing, AI, robotics, and aerospace.

China aims to achieve an AI self-sufficiency manufacturing rate of 80 per cent, minimising its dependence on other countries for the complex parts needed in this tech. It also aims to become a leading technology hub in AI by 2030. This is bearing fruit, as in 2017, 48 per cent of global AI funding was Chinese compared to 38% being American. Chinese AI company iFlyTek often beats Facebook, Alphabet’s DeepMind, and IBM’s Watson in competitions to process natural speech, even in its “second language” English.

China is now the world’s biggest producer of scientific research papers and Semantic Scholar, the academic search engine for scientific articles, suggests Chinese scholars have surpassed their US counterparts in producing AI papers.

So the Huawei ban and tariffs on Chinese goods will not slow China – they will stimulate its new innovation system and boost scientific research aimed at becoming more independent.

Domestic boost 
 
Another consequence will be an acceleration of China’s attempt to rebalance its economy away from external demand and investment towards domestic consumption. This started in 2008 with the global financial crisis and has become increasingly necessary as China’s middle class develops. Since then large-scale government-led infrastructure investments, measures to increase household income, reductions of income tax, and improvements to social welfare systems have helped grow domestic consumption.

When Trump first announced tariffs in 2018, China’s domestic consumption was responsible for 76.2 per cent of its GDP growth, and the Chinese stock market absorbed the impact and bounced back after an initial sharp decline. Since then, the Chinese government has introduced new policies to boost domestic consumption further, including more tax cuts, improved childcare, and elderly care initiatives and incentives. So the trade war has helped China’s efforts to redistribute wealth and restructure its economy.

The trade war has also rallied the Chinese public around its government. US treatment of Chinese companies has been perceived as bullying and people have compared it to the way that the British Empire forced unfair trade practices on China in the 19th century. This topic is incredibly emotive in Chinese society and has boosted domestic support for the government.

The Chinese word for crisis is composed of two characters – one for danger and the other for opportunity. The country’s ability to capitalise on the current challenge from the US will strengthen it for years to come. 
 
(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/us-china-trade-war-is-making-china-stronger-118852">original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp;

 
&nbsp;

The United States and China have reached a truce in their escalating trade war. Following a meeting between US president, Donald Trump and his Chinese counterpart, Xi Jinping at the G20, the two leaders agreed to renew talks.

The United States and China have reached a truce in their escalating trade war. Following a meeting between US president, Donald Trump and his Chinese counterpart, Xi Jinping at the G20, the two leaders agreed to renew talks. Tariffs, which began to be introduced by both sides on an array of imports in 2018, will not be raised further. But a number of tariffs remain and trade relations are still far from normal between the world’s two largest economies. This may not be a cold war. But it is a great power rivalry focusing on technological supremacy and which side has the best development model. China’s economy is slowing down and recent tariffs from the US on its exports have not helped. China’s growth rate declined from 6.6 per cent in 2018 to 6.4 per cent in the first quarter of 2019. But in the long term, the pressure exerted by Trump’s administration will strengthen China. It will help China speed up its efforts to restructure its economy, focus more on innovation, and also boost the country’s national pride. Technological advancements are central to empire building and the rise of new powers, with steam power and then electronic technologies driving previous British and American empires. The fourth industrial revolution will shift international competition away from labour, territory, nuclear arms, and soft power to new technology including robotics, artificial intelligence (AI), and wireless services. Wake up call Until recently, US policymakers operated under the assumption that the US was the world’s technological superpower and Silicon Valley was the globe’s innovation hotbed. China was regarded as a copycat that builds clumsy clones of American technologies or uses its big state-owned enterprises to purchase innovative US companies and absorb their intellectual property and know-how. But when it comes to 5G – the next generation of superfast internet technology – the US has lagged behind. No American company has comparable wireless equipment to Huawei. This spurred Trump to wage war on the Chinese tech company. First he declared a national emergency, banning sales and the use of telecoms equipment deemed to pose “unacceptable risks”. Then he lobbied allies to do the same. US-based companies followed suit. First, Google removed Huawei from its Android service, then the Wi-Fi Alliance, Bluetooth, and others followed suit. Huawei’s 5G capabilities and the fallout from them can be seen as China’s Sputnik moment. In the same way the Soviet Union was the first to launch a satellite into space, creating the appearance that the Soviets were winning the engineering challenge of the day, China is outpacing other countries in the development of 5G today. China realises the dangers of technological dependence, economic entanglement, and scientific reliance on the US. Innovation revolution Huawei is a product of the Chinese government’s industrial policy strategy. The vision to move up the economic value chain from a low-end manufacturer to a global innovation leader led to the launch of its Made In China 2025 initiative and an Artificial Intelligence Development Plan to channel resources into strategic sectors such as computing, AI, robotics, and aerospace. China aims to achieve an AI self-sufficiency manufacturing rate of 80 per cent, minimising its dependence on other countries for the complex parts needed in this tech. It also aims to become a leading technology hub in AI by 2030. This is bearing fruit, as in 2017, 48 per cent of global AI funding was Chinese compared to 38% being American. Chinese AI company iFlyTek often beats Facebook, Alphabet’s DeepMind, and IBM’s Watson in competitions to process natural speech, even in its “second language” English. China is now the world’s biggest producer of scientific research papers and Semantic Scholar, the academic search engine for scientific articles, suggests Chinese scholars have surpassed their US counterparts in producing AI papers. So the Huawei ban and tariffs on Chinese goods will not slow China – they will stimulate its new innovation system and boost scientific research aimed at becoming more independent. Domestic boost Another consequence will be an acceleration of China’s attempt to rebalance its economy away from external demand and investment towards domestic consumption. This started in 2008 with the global financial crisis and has become increasingly necessary as China’s middle class develops. Since then large-scale government-led infrastructure investments, measures to increase household income, reductions of income tax, and improvements to social welfare systems have helped grow domestic consumption. When Trump first announced tariffs in 2018, China’s domestic consumption was responsible for 76.2 per cent of its GDP growth, and the Chinese stock market absorbed the impact and bounced back after an initial sharp decline. Since then, the Chinese government has introduced new policies to boost domestic consumption further, including more tax cuts, improved childcare, and elderly care initiatives and incentives. So the trade war has helped China’s efforts to redistribute wealth and restructure its economy. The trade war has also rallied the Chinese public around its government. US treatment of Chinese companies has been perceived as bullying and people have compared it to the way that the British Empire forced unfair trade practices on China in the 19th century. This topic is incredibly emotive in Chinese society and has boosted domestic support for the government. The Chinese word for crisis is composed of two characters – one for danger and the other for opportunity. The country’s ability to capitalise on the current challenge from the US will strengthen it for years to come. (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

US-China trade war is making China stronger

Top US and Chinese negotiators held phone talks on Tuesday as the world's top two economies seek to <a href="https://www.wionews.com/world/china-says-us-tariffs-must-be-lifted-to-reach-a-deal-to-end-trade-war-232996">resolve their trade war</a>, more than a week after they declared a truce.

Talks had broken down in May over US accusations that Beijing had reneged on its commitments, and the dispute escalated with the two sides exchanging steep increases in punitive tariffs.

But US President Donald Trump and Chinese leader Xi Jinping agreed to revive negotiations when they met on the <a href="https://www.wionews.com/business-economy/g20-says-worsening-trade-wars-pose-risk-to-world-economy-225664">sidelines of the G20 summit</a> in Japan on June 29.

US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer spoke with Chinese Vice Premier Liu He and Commerce Minister Zhong Shan on Tuesday.

White House economic adviser Larry Kudlow told reporters the talks "went constructively" but it was "too soon for details."

In an interview with the Fox Business Network, Kudlow described the discussions as "preliminary" and said meetings will "probably" be arranged, but did not give more details.

Kudlow noted that Trump has agreed to hold off on imposing new tariffs and will allow certain US products to be sold to Chinese telecom giant Huawei.

"Having said that, we have a very strong -&nbsp;I want to underscore this -&nbsp;a very strong expectation that China will really shortly, maybe immediately, begin to purchase US agricultural products," he told the US broadcaster.

The Chinese commerce ministry said in a brief statement that the two sides exchanged "opinions on implementing the consensus reached between the two countries' heads of state in Osaka."

Washington and Beijing have hit each other with punitive tariffs covering more than $360 billion in two-way trade and those duties remain in place.

After his meeting with Xi in Osaka, Trump said he would refrain from imposing tariffs on more Chinese products. He had previously threatened to put punitive duties on an additional $300 billion in Chinese exports.

He also triggered a backlash in the US Congress by agreeing to soften some US export restrictions on components to Huawei, though Trump stipulated that officials would take care to avoid creating new risks to US national security.

The United States had imposed tough sanctions on the company, whose equipment US officials fear could be used as Trojan horses for China's intelligence services.

The ceasefire comes as the US presidential campaign has started ahead of the November 2020 election.

Asked about speculation that Beijing may be waiting to see how the race plays out, Kudlow said it "would be a very big mistake on their part."

"I think that kind of thinking would probably do great damage to these trade talks," he said.

But he suggested that the US was in no hurry to finalize a deal.

"Speed is not an issue, quality is the issue," Kudlow said. "And so I make no forecast on that and reiterate this view. &nbsp;There's no timetable, none of that stuff."

Top US and Chinese negotiators held phone talks on Tuesday as the world's top two economies seek to resolve their trade war, more than a week after they declared a truce.

Top US and Chinese negotiators held phone talks on Tuesday as the world's top two economies seek to resolve their trade war, more than a week after they declared a truce. Talks had broken down in May over US accusations that Beijing had reneged on its commitments, and the dispute escalated with the two sides exchanging steep increases in punitive tariffs. But US President Donald Trump and Chinese leader Xi Jinping agreed to revive negotiations when they met on the sidelines of the G20 summit in Japan on June 29. US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer spoke with Chinese Vice Premier Liu He and Commerce Minister Zhong Shan on Tuesday. White House economic adviser Larry Kudlow told reporters the talks "went constructively" but it was "too soon for details." In an interview with the Fox Business Network, Kudlow described the discussions as "preliminary" and said meetings will "probably" be arranged, but did not give more details. Kudlow noted that Trump has agreed to hold off on imposing new tariffs and will allow certain US products to be sold to Chinese telecom giant Huawei. "Having said that, we have a very strong - I want to underscore this - a very strong expectation that China will really shortly, maybe immediately, begin to purchase US agricultural products," he told the US broadcaster. The Chinese commerce ministry said in a brief statement that the two sides exchanged "opinions on implementing the consensus reached between the two countries' heads of state in Osaka." Washington and Beijing have hit each other with punitive tariffs covering more than $360 billion in two-way trade and those duties remain in place. After his meeting with Xi in Osaka, Trump said he would refrain from imposing tariffs on more Chinese products. He had previously threatened to put punitive duties on an additional $300 billion in Chinese exports. He also triggered a backlash in the US Congress by agreeing to soften some US export restrictions on components to Huawei, though Trump stipulated that officials would take care to avoid creating new risks to US national security. The United States had imposed tough sanctions on the company, whose equipment US officials fear could be used as Trojan horses for China's intelligence services. The ceasefire comes as the US presidential campaign has started ahead of the November 2020 election. Asked about speculation that Beijing may be waiting to see how the race plays out, Kudlow said it "would be a very big mistake on their part." "I think that kind of thinking would probably do great damage to these trade talks," he said. But he suggested that the US was in no hurry to finalize a deal. "Speed is not an issue, quality is the issue," Kudlow said. "And so I make no forecast on that and reiterate this view. There's no timetable, none of that stuff."

After Trump, Xi G20 meeting, US, China resume talks to resolve trade war

The United States said Tuesday that its $2.2 billion arms sale to <a href="https://www.wionews.com/world/sale-of-weapons-to-taiwan-violates-one-china-policy-cancel-it-immediately-china-to-us-234236">Taiwan will contribute to stability</a> in Asia after China demanded that Washington cancel the order.

The State Department said the deal, which includes <a href="https://www.wionews.com/world/us-approves-possible-22-billion-arms-sale-to-taiwan-amid-tension-with-china-234130">battle tanks and anti-aircraft missiles</a>, did not change US recognition of Beijing as China's sole government.

"Our interest in Taiwan, especially as it relates to these military sales, is to promote peace and stability across the strait, across the region," State Department spokeswoman Morgan Ortagus told reporters.

"So there is no change of course in our long-standing one-China policy," she said.

"I don't see our notification here as anything other than complying with the Taiwan Relations Act," she said, referring to the law passed by Congress in 1979 that requires the United States to ensure that the island has the means to defend itself.

It was the biggest US arms sale in years to the self-governing democracy, where China's defeated nationalists fled in 1949 and which Beijing considers a province awaiting reunification.

China said it lodged a complaint through diplomatic channels expressing "strong dissatisfaction and resolute opposition" to the sale.

The deal includes 108 M1A2T Abrams tanks, 250 Stinger portable anti-aircraft missiles, related equipment and support at an estimated cost of just over $2.2 billion, according to the Defense Security Cooperation Agency (DSCA).

China has significantly stepped up diplomatic and military pressure on Taipei since the election in 2016 of President Tsai Ing-wen, whose Democratic Progressive Party refuses to acknowledge that the island is part of "One China".

The United States said Tuesday that its $2.2 billion arms sale to Taiwan will contribute to stability in Asia after China demanded that Washington cancel the order.

The United States said Tuesday that its $2.2 billion arms sale to Taiwan will contribute to stability in Asia after China demanded that Washington cancel the order. The State Department said the deal, which includes battle tanks and anti-aircraft missiles, did not change US recognition of Beijing as China's sole government. "Our interest in Taiwan, especially as it relates to these military sales, is to promote peace and stability across the strait, across the region," State Department spokeswoman Morgan Ortagus told reporters. "So there is no change of course in our long-standing one-China policy," she said. "I don't see our notification here as anything other than complying with the Taiwan Relations Act," she said, referring to the law passed by Congress in 1979 that requires the United States to ensure that the island has the means to defend itself. It was the biggest US arms sale in years to the self-governing democracy, where China's defeated nationalists fled in 1949 and which Beijing considers a province awaiting reunification. China said it lodged a complaint through diplomatic channels expressing "strong dissatisfaction and resolute opposition" to the sale. The deal includes 108 M1A2T Abrams tanks, 250 Stinger portable anti-aircraft missiles, related equipment and support at an estimated cost of just over $2.2 billion, according to the Defense Security Cooperation Agency (DSCA). China has significantly stepped up diplomatic and military pressure on Taipei since the election in 2016 of President Tsai Ing-wen, whose Democratic Progressive Party refuses to acknowledge that the island is part of "One China".

Military ties with Taiwan meant to promote peace across the strait: US

China on Monday said "unilateral bullying" by the United States was the cause behind the escalating Iran nuclear crisis, after <a href="https://www.wionews.com/world/britains-oil-tanker-seizure-will-not-go-without-a-response-iran-defence-minister-233959">Tehran</a> announced it was <a href="https://www.wionews.com/world/iran-says-it-will-enrich-uranium-at-any-level-challenging-us-233760">set to breach its uranium enrichment</a> cap.

"The facts show that unilateral bullying has already become a worsening tumour," said Chinese foreign ministry spokesman Geng Shuang at a press briefing in Beijing.

"The <a href="https://www.wionews.com/world/iran-better-be-careful-warns-trump-on-breaching-uranium-enrichment-cap-233859">maximum pressure exerted by the US</a> on Iran is the root cause of the Iranian nuclear crisis," he said.

Iran threatened on Sunday to abandon more commitments to an endangered 2015 nuclear deal unless a solution is found with the remaining parties after the US pulled out.&nbsp;

The 2015 deal was reached between Iran and <a href="https://www.wionews.com/world/after-britain-germany-strongly-urges-iran-to-halt-uranium-enrichment-233803">six world powers</a> -- Britain, China, France, Germany, the United States and Russia -- and saw Tehran agree to drastically scale down its nuclear programme in exchange for sanctions relief.

Washington began reimposing sanctions on Iran in August 2018 and has targeted crucial sectors including oil exports and the banking system, fuelling a deep recession.

Watch: Iran Shifts From Patience to Confrontation

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<a href="https://www.wionews.com/world/un-nuclear-watchdogs-board-to-meet-on-iran-at-request-of-us-233425">Tehran's move to start enriching uranium</a> above the maximum purification level has already drawn opposition from countries backing the nuclear deal, with Germany urging it to "stop and reverse all activities inconsistent with its commitments."

Geng said China has expressed "regret" for Tehran's decision to reduce its fulfilment of the Iran nuclear deal.&nbsp;

China on Monday said "unilateral bullying" by the United States was the cause behind the escalating Iran nuclear crisis, after Tehran announced it was set to breach its uranium enrichment cap.

China on Monday said "unilateral bullying" by the United States was the cause behind the escalating Iran nuclear crisis, after Tehran announced it was set to breach its uranium enrichment cap. "The facts show that unilateral bullying has already become a worsening tumour," said Chinese foreign ministry spokesman Geng Shuang at a press briefing in Beijing. "The maximum pressure exerted by the US on Iran is the root cause of the Iranian nuclear crisis," he said. Iran threatened on Sunday to abandon more commitments to an endangered 2015 nuclear deal unless a solution is found with the remaining parties after the US pulled out. The 2015 deal was reached between Iran and six world powers -- Britain, China, France, Germany, the United States and Russia -- and saw Tehran agree to drastically scale down its nuclear programme in exchange for sanctions relief. Washington began reimposing sanctions on Iran in August 2018 and has targeted crucial sectors including oil exports and the banking system, fuelling a deep recession. Watch: Iran Shifts From Patience to Confrontation × Tehran's move to start enriching uranium above the maximum purification level has already drawn opposition from countries backing the nuclear deal, with Germany urging it to "stop and reverse all activities inconsistent with its commitments." Geng said China has expressed "regret" for Tehran's decision to reduce its fulfilment of the Iran nuclear deal.

'Bullying' by United States is cause behind escalating Iran nuclear crisis: China

United States President Donald Trump in a series of tweets on Saturday said he had a great meeting with Chinese President Xi Jinping on the sidelines of the <a href="https://www.wionews.com/world/g20-summit-donald-trump-confirms-wont-impose-new-tariffs-on-china-231445">G20 summit in Japan's Osaka </a>where he also agreed to continue negotiations over the stalled trade talks between the two world economies.

"I had a great meeting with President Xi of <a href="https://www.wionews.com/world/china-eases-foreign-investment-curbs-amid-cooling-trade-tensions-231699">China </a>yesterday, far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate," the president wrote on Twitter.

The US-China trade war and climate change have been contentious issues during the G20 summit.

After a meeting with Chinese President Xi Jinping on the last day of the annual summit, US President Donald Trump says relations between the two countries are "back on track" after a breakdown in trade talks last month following Washington`s imposed tariffs on US $300 billion of Chinese goods.

"China has agreed that, during the negotiation, they will begin purchasing large amounts of agricultural product from our great Farmers," Trump added.

The US President further noted that he will allow Huawei Technologies to buy products from US suppliers, in a concession to the communist country.

"At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy the product from them which will not impact our National Security," Trump said.

"Importantly, we have opened up negotiations again with China as our relationship with them continues to be a very good one. The quality of the transaction is far more important to me than speed. I am in no hurry, but things look very good! There will be no reduction in the Tariffs currently being charged to China," he added.

The remarks came after the US Commerce Department last month had reportedly moved to blacklist Huawei, cutting it off from the US suppliers.

The US also has been engaged in a global campaign to block the Chinese tech giant from so-called 5G communications networks, calling the company a security threat.

The Trump administration has alleged that Beijing could use Huawei`s products to spy on countries that use them in their networks. The allegations were, however, denied by the company.&nbsp;

United States President Donald Trump in a series of tweets on Saturday said he had a great meeting with Chinese President Xi Jinping on the sidelines of the G20 summit in Japan's Osaka where he also agreed to continue negotiations over the stalled trade talks between the two world economies.

United States President Donald Trump in a series of tweets on Saturday said he had a great meeting with Chinese President Xi Jinping on the sidelines of the G20 summit in Japan's Osaka where he also agreed to continue negotiations over the stalled trade talks between the two world economies. "I had a great meeting with President Xi of China yesterday, far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate," the president wrote on Twitter. The US-China trade war and climate change have been contentious issues during the G20 summit. After a meeting with Chinese President Xi Jinping on the last day of the annual summit, US President Donald Trump says relations between the two countries are "back on track" after a breakdown in trade talks last month following Washington`s imposed tariffs on US $300 billion of Chinese goods. "China has agreed that, during the negotiation, they will begin purchasing large amounts of agricultural product from our great Farmers," Trump added. The US President further noted that he will allow Huawei Technologies to buy products from US suppliers, in a concession to the communist country. "At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy the product from them which will not impact our National Security," Trump said. "Importantly, we have opened up negotiations again with China as our relationship with them continues to be a very good one. The quality of the transaction is far more important to me than speed. I am in no hurry, but things look very good! There will be no reduction in the Tariffs currently being charged to China," he added. The remarks came after the US Commerce Department last month had reportedly moved to blacklist Huawei, cutting it off from the US suppliers. The US also has been engaged in a global campaign to block the Chinese tech giant from so-called 5G communications networks, calling the company a security threat. The Trump administration has alleged that Beijing could use Huawei`s products to spy on countries that use them in their networks. The allegations were, however, denied by the company.

Huawei allowed to buy from US suppliers as relations with China are 'back on track'

Leaders will try to negotiate a way out of the trade war. Reports says 2 sides have already reached tentative agreements. It's a big bilateral meet on the sidelines of G20 summit. Watch this video to know more.

G20 Summit Day 2: Xi maps the history of U.S-China ties

US President Doanld Trump said US-China bilateral can be a very productive meeting. He also said, ''We can do something truly monumental''. US has imposed tariffs on $250 Bn of Chinese imports. China has also imposed retaliatory tariffs on Washington. Watch this video to know more.

G20 Summit Day 2: Xi Upholds Cooperation Over Confrontation

G20 Summit Day 2: U.S-China Bilateral

By Bill Durodie

On June 28 and 29, the G20 summit will convene for the 14th time in Osaka, Japan. This gathering of leaders from the world’s leading economies, including the EU, plus invited guests and international organisations, ought to offer an important moment for mature reflection and collective coordination regarding the future needs of the world economy at a difficult time.

Instead, it is likely to descend either into directly confrontational rhetoric or, alternatively, empty promises and vague platitudes that avoid its mission to be the “premier forum for international economic cooperation”. The focus could end up being on more peripheral matters such as climate change, counter-terrorism, health and migration that are perceived of as being less contentious but should not be fundamental concerns of the G20.

The G20 is no stranger to crisis. It emerged from the 1997-98 Asian Financial Crisis that led G7 finance ministers (representing almost half of world GDP) to establish a wider group in order to engage with the major emerging economies. Then, in the wake of the 2007-08 global financial crisis, the group was further elevated to become a forum for heads of state.

In 2019, it is the continuing dispute between the US and China over trade that appears to loom largest. But this ought not be the main focus of the G20 either. As is well understood, trade wars are symptoms of underlying economic problems rather than their cause. The main focus ought to be on addressing those.

Trade and tariffs are not the fundamental drivers of growth and prosperity. Rather, these derive from domestic productivity levels in the making of goods and services that are, in their turn, driven by investment. To trade effectively, the key is to have something worth selling in the first place.

Tariffs, regulation, barriers

Unfortunately, the protectionist measures that had hastened the advent of World War II, and that were dismantled subsequently through the establishment of the GATT/WTO, led instead to a growing proliferation of non-tariff or technical barriers to trade. Rather than invest in new industries, older ones were sustained artificially behind a chaff of regulatory standards, intellectual property laws, state subsidies and public procurement policies.

Accordingly, assertions that we have been living through a time marked by a so-called “rules-based international trading system” fall very wide of the mark. All the evidence points to systematic attempts by the key players – and the United States in particular – to subvert any supposed “liberal world order”, both economically and militarily.

Now it may be, of course, that President Trump – who is certainly not the first US, or other, world leader to engage in such embargoes against China – understands full well that to compete internationally as a successful exporter it is the ability to produce efficiently at home that matters more than trade deals. Some of his pronouncements have reflected as much, looking to put pressure on manufacturers, such as Harley-Davidson and Nike, to bring their production back to its origins.

But, irrespective, the adverse effects of this approach are evident for all to see. Many American firms have warned the US Department of Commerce that such measures hurt both businesses and consumers alike. The latter invariably bear the brunt of any related price increases.

The IMF has cut its world economic growth forecast in accordance. And anyway, many enterprises will simply relocate elsewhere, such as to Vietnam, which is not currently on the receiving end of such additional duties.

A risky game

The deeper consequences, though, will take more time to become manifest. These include growing differences among the Western powers over how to handle the economic rise of the East.

This was seen recently, through the US stance towards its partners not using the Chinese firm Huawei to develop critical 5G infrastructure, despite its being the leading global player in the field. Such actions could come to damage relations with key allies, such as the UK and Germany.

In this regard, the US is playing a very risky game. With its relations veering towards a potential conflict with Iran, as well as its ongoing disputes with Russia and China, the US may yet come to rue antagonising its friends as well.

Or, at the very least, it may regret making them have to choose between their relations with the US and China. Only this week, the UK chancellor, Phillip Hammond launched the new Shanghai-London Stock Connect that looks set to deepen financial relations by facilitating investment between them.

This, and China’s recent decision not to pursue WTO market economy status, may also point to a growing maturity on its part in relation to such matters. Certainly, its most successful strategy in the past was always to keep a low profile on the international stage and avoid confrontation in foreign affairs, while focusing more on its domestic concerns.

Historically, it has often been extraneous circumstances that have accelerated change in world affairs more than any conscious push. The two powers that dominated each of the last two preceding centuries – the US and UK – did so as much through the decline and imperial overreach of their predecessors as through their own efforts. That, and its underlying crisis of innovation and investment, are what the US leadership would do well to reflect upon most in Osaka.

(Bill Durodie is Professor and Chair of International Relations, University of Bath)

(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/g20-us-china-trade-war-points-to-the-real-crisis-that-global-leaders-must-confront-119359">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp; 
&nbsp;

By Bill Durodie On June 28 and 29, the G20 summit will convene for the 14th time in Osaka, Japan. This gathering of leaders from the world’s leading economies, including the EU, plus invited guests and international organisations, ought to offer an important moment for mature reflection and collective coordination regarding the future needs of the world economy at a difficult time.

By Bill Durodie On June 28 and 29, the G20 summit will convene for the 14th time in Osaka, Japan. This gathering of leaders from the world’s leading economies, including the EU, plus invited guests and international organisations, ought to offer an important moment for mature reflection and collective coordination regarding the future needs of the world economy at a difficult time. Instead, it is likely to descend either into directly confrontational rhetoric or, alternatively, empty promises and vague platitudes that avoid its mission to be the “premier forum for international economic cooperation”. The focus could end up being on more peripheral matters such as climate change, counter-terrorism, health and migration that are perceived of as being less contentious but should not be fundamental concerns of the G20. The G20 is no stranger to crisis. It emerged from the 1997-98 Asian Financial Crisis that led G7 finance ministers (representing almost half of world GDP) to establish a wider group in order to engage with the major emerging economies. Then, in the wake of the 2007-08 global financial crisis, the group was further elevated to become a forum for heads of state. In 2019, it is the continuing dispute between the US and China over trade that appears to loom largest. But this ought not be the main focus of the G20 either. As is well understood, trade wars are symptoms of underlying economic problems rather than their cause. The main focus ought to be on addressing those. Trade and tariffs are not the fundamental drivers of growth and prosperity. Rather, these derive from domestic productivity levels in the making of goods and services that are, in their turn, driven by investment. To trade effectively, the key is to have something worth selling in the first place. Tariffs, regulation, barriers Unfortunately, the protectionist measures that had hastened the advent of World War II, and that were dismantled subsequently through the establishment of the GATT/WTO, led instead to a growing proliferation of non-tariff or technical barriers to trade. Rather than invest in new industries, older ones were sustained artificially behind a chaff of regulatory standards, intellectual property laws, state subsidies and public procurement policies. Accordingly, assertions that we have been living through a time marked by a so-called “rules-based international trading system” fall very wide of the mark. All the evidence points to systematic attempts by the key players – and the United States in particular – to subvert any supposed “liberal world order”, both economically and militarily. Now it may be, of course, that President Trump – who is certainly not the first US, or other, world leader to engage in such embargoes against China – understands full well that to compete internationally as a successful exporter it is the ability to produce efficiently at home that matters more than trade deals. Some of his pronouncements have reflected as much, looking to put pressure on manufacturers, such as Harley-Davidson and Nike, to bring their production back to its origins. But, irrespective, the adverse effects of this approach are evident for all to see. Many American firms have warned the US Department of Commerce that such measures hurt both businesses and consumers alike. The latter invariably bear the brunt of any related price increases. The IMF has cut its world economic growth forecast in accordance. And anyway, many enterprises will simply relocate elsewhere, such as to Vietnam, which is not currently on the receiving end of such additional duties. A risky game The deeper consequences, though, will take more time to become manifest. These include growing differences among the Western powers over how to handle the economic rise of the East. This was seen recently, through the US stance towards its partners not using the Chinese firm Huawei to develop critical 5G infrastructure, despite its being the leading global player in the field. Such actions could come to damage relations with key allies, such as the UK and Germany. In this regard, the US is playing a very risky game. With its relations veering towards a potential conflict with Iran, as well as its ongoing disputes with Russia and China, the US may yet come to rue antagonising its friends as well. Or, at the very least, it may regret making them have to choose between their relations with the US and China. Only this week, the UK chancellor, Phillip Hammond launched the new Shanghai-London Stock Connect that looks set to deepen financial relations by facilitating investment between them. This, and China’s recent decision not to pursue WTO market economy status, may also point to a growing maturity on its part in relation to such matters. Certainly, its most successful strategy in the past was always to keep a low profile on the international stage and avoid confrontation in foreign affairs, while focusing more on its domestic concerns. Historically, it has often been extraneous circumstances that have accelerated change in world affairs more than any conscious push. The two powers that dominated each of the last two preceding centuries – the US and UK – did so as much through the decline and imperial overreach of their predecessors as through their own efforts. That, and its underlying crisis of innovation and investment, are what the US leadership would do well to reflect upon most in Osaka. (Bill Durodie is Professor and Chair of International Relations, University of Bath) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

US-China trade war points to the real crisis that global leaders must confront at G20 Summit

By Allen Morrison and Stewart Black 
 
When US President Donald Trump meets Chinese leader Xi Jinping at the G-20 economic summit in Japan, hopes aren’t all that high that they will conclude with a comprehensive trade deal.

Nonetheless, most US business leaders and investors are optimistic that the two countries will eventually reach a trade agreement – and when they do, it will pry open Chinese markets and create a wealth of opportunities for US companies.

Specifically, American negotiators are pushing for a deal that could end forced technology transfers, improve intellectual property protection and widen access to China’s markets – all with the ultimate goal of creating a “level playing field” for US businesses.

Yet as beneficial as resolving intellectual property and technology transfer issues with China maybe – not to mention ending the trade war – this is not the biggest reason American companies have failed to do business in China. Rather, as our forthcoming research shows, their biggest failure stems from their inability to penetrate the country’s complex business ecosystems.

Changes to intellectual property regulations and tariff provisions will not magically fix this.

Doing business in China

Since the 1970s, foreign companies, including US businesses, have poured trillions of dollars into China to build global supply chains and access their markets.

In 2018, total foreign direct investment stocks in China reached a record $2.76 trillion, up from just over $915 billion a decade earlier.

For some Western companies as diverse as Coca-Cola, General Motors, Apple, Lego and L'Oréal, China has been a boon and remains a focus of their international expansion plans. After decades of commitment, they have made significant progress in China by emphasizing adaptability, delegation of decision-making, cultural learning, and talent acquisition and development.

But research we’re planning to publish later this summer shows that China remains an enigma for most U.S. businesses. Only 41 companies in the Standard &amp; Poor’s 500 stock index generate 10 per cent or more of their global revenues from China. Of the 30 largest companies in the index, only four have revenues that exceed 10 per cent of their global revenues.

And a 2017 Goldman Sachs analysis found that in all, S&amp;P 500 companies earned just 1 per cent of their revenues in China, compared with 30 per cent in total non-US sales.

Rise of the Chinese ‘megafirm’ 
 
No doubt Chinese government regulations, tariffs and the theft of intellectual property are among the significant barriers that have made it harder for US&nbsp;and other Western companies to do business in China. But we found that the biggest challenge is their failure to penetrate state-dominated business ecosystems built around what are essentially Chinese “megafirms.”

China’s largest conglomerates, which have grown an average of 20 per cent&nbsp;per year over the past decade have much in common with their Asian cousins. Like the chaebol of South Korea and keiretsu in Japan, affiliates and subsidiaries of Chinese megafirms are typically part of a network of cross-owned businesses. Ownership structures are difficult for outsiders to penetrate and act as nearly insurmountable barriers to entry for foreign companies.

But Chinese megafirms have a unique aspect to their structure and ownership: the role of the state, which includes national, provincial or municipal entities. Rather than serve as background context for decision-making within Chinese megafirms acting strictly as a regulator, the state is itself an owner and plays a much greater role than most Americans know.

The 10 biggest Chinese companies by revenue are all either state-owned or owned by a mixture of publicly listed investors and Chinese government entities. Of the 111 Chinese businesses on the Fortune Global 500 list in 2018, state-owned entities represented nearly 71%.

The rest were privately owned – many with publicly listed shares – but don’t let that fool you. With only a few exceptions, publicly listed companies in China are invariably partly owned by other companies in which operate in their ecosystem and these, in turn, are owned or partly owned by either the state or government-controlled entities.

Given the dearth of publicly accessible information and exacerbated by the maze of cross-ownerships, following the equity trail and fully understanding ownership is difficult in China and most often futile.

Success for foreign companies in China is invariably dependent on fitting into a major business ecosystem. These include networks of suppliers, assemblers, financial institutions, distributors, retailers and trading companies. At the center of this circle are typically one or several megafirms.

Unfortunately, the US businesses that can’t make it to the inside of that circle – the vast majority – are unable to prosper in China. And the Chinese government helps to pick who gets in, and who doesn’t.

Megafirms meet megabanks 
 
The Chinese government does not need to own a controlling share in order to exert powerful influence.

It can cause its companies to enter into new partnerships, diversify into new product lines, set up new production facilities, or expand distribution merely by signaling the desired outcomes through public or private statements, “introductions” to targeted partners and promises of new customers and revenue streams.

The government also uses Chinese “megabanks” to drive economic growth according to national priorities. In 2018, nearly 65 per cent of all bank loans in China were to corporate entities, twice as high as in the U.S. Megafirms are provided funding at preferential rates, leaving those on the outside at a disadvantage.

The banking sector in China is huge, with total assets of about $35 trillion in 2018, more than three times the country’s entire GDP. This circular financing feeds corporate growth and creates a circular system of codependency.

Because foreign companies are outside the system, they are at inherent disadvantage when it comes to attaining local loans from Chinese banks.

That creates another problem for Western companies. Most of them invest overseas with the goal of repatriating profits back home. China makes this very difficult. Which means they typically have to bring money in from their home countries – but because of Chinese tax rules and strict foreign exchange controls, they also have difficulty getting their investments back out.

Impenetrable China

A positive resolution to the trade war – either during the G-20 or sometime later – would be welcomed by many. But we believe that whatever agreements are reached on tariffs or intellectual property, these structural issues will persist.

The US&nbsp;and other outside companies that want to do business in China face a dilemma: Do they reinvent themselves in an effort to become insiders in China? Doing so would not only require a change in mentality, but also a commitment to being “in China, for China.”

Otherwise, China’s business ecosystem, with its megafirms and layers of affiliates with the government at the center of it all, will remain largely impenetrable for Western companies. Irrespective of what happens at the G-20, China is very unlikely to change a system that has created massive wealth and prosperity for the Chinese people. 
&nbsp;

(Allen Morrison is Professor of Global Management, Arizona State University; Stewart Black is Professor of Management Practice in Global Leadership and Strategy, INSEAD)

(This article was originally published on The Conversation. Read the original article)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp; 
&nbsp;

By Allen Morrison and Stewart Black When US President Donald Trump meets Chinese leader Xi Jinping at the G-20 economic summit in Japan, hopes aren’t all that high that they will conclude with a comprehensive trade deal.

By Allen Morrison and Stewart Black When US President Donald Trump meets Chinese leader Xi Jinping at the G-20 economic summit in Japan, hopes aren’t all that high that they will conclude with a comprehensive trade deal. Nonetheless, most US business leaders and investors are optimistic that the two countries will eventually reach a trade agreement – and when they do, it will pry open Chinese markets and create a wealth of opportunities for US companies. Specifically, American negotiators are pushing for a deal that could end forced technology transfers, improve intellectual property protection and widen access to China’s markets – all with the ultimate goal of creating a “level playing field” for US businesses. Yet as beneficial as resolving intellectual property and technology transfer issues with China maybe – not to mention ending the trade war – this is not the biggest reason American companies have failed to do business in China. Rather, as our forthcoming research shows, their biggest failure stems from their inability to penetrate the country’s complex business ecosystems. Changes to intellectual property regulations and tariff provisions will not magically fix this. Doing business in China Since the 1970s, foreign companies, including US businesses, have poured trillions of dollars into China to build global supply chains and access their markets. In 2018, total foreign direct investment stocks in China reached a record $2.76 trillion, up from just over $915 billion a decade earlier. For some Western companies as diverse as Coca-Cola, General Motors, Apple, Lego and L'Oréal, China has been a boon and remains a focus of their international expansion plans. After decades of commitment, they have made significant progress in China by emphasizing adaptability, delegation of decision-making, cultural learning, and talent acquisition and development. But research we’re planning to publish later this summer shows that China remains an enigma for most U.S. businesses. Only 41 companies in the Standard & Poor’s 500 stock index generate 10 per cent or more of their global revenues from China. Of the 30 largest companies in the index, only four have revenues that exceed 10 per cent of their global revenues. And a 2017 Goldman Sachs analysis found that in all, S&P 500 companies earned just 1 per cent of their revenues in China, compared with 30 per cent in total non-US sales. Rise of the Chinese ‘megafirm’ No doubt Chinese government regulations, tariffs and the theft of intellectual property are among the significant barriers that have made it harder for US and other Western companies to do business in China. But we found that the biggest challenge is their failure to penetrate state-dominated business ecosystems built around what are essentially Chinese “megafirms.” China’s largest conglomerates, which have grown an average of 20 per cent per year over the past decade have much in common with their Asian cousins. Like the chaebol of South Korea and keiretsu in Japan, affiliates and subsidiaries of Chinese megafirms are typically part of a network of cross-owned businesses. Ownership structures are difficult for outsiders to penetrate and act as nearly insurmountable barriers to entry for foreign companies. But Chinese megafirms have a unique aspect to their structure and ownership: the role of the state, which includes national, provincial or municipal entities. Rather than serve as background context for decision-making within Chinese megafirms acting strictly as a regulator, the state is itself an owner and plays a much greater role than most Americans know. The 10 biggest Chinese companies by revenue are all either state-owned or owned by a mixture of publicly listed investors and Chinese government entities. Of the 111 Chinese businesses on the Fortune Global 500 list in 2018, state-owned entities represented nearly 71%. The rest were privately owned – many with publicly listed shares – but don’t let that fool you. With only a few exceptions, publicly listed companies in China are invariably partly owned by other companies in which operate in their ecosystem and these, in turn, are owned or partly owned by either the state or government-controlled entities. Given the dearth of publicly accessible information and exacerbated by the maze of cross-ownerships, following the equity trail and fully understanding ownership is difficult in China and most often futile. Success for foreign companies in China is invariably dependent on fitting into a major business ecosystem. These include networks of suppliers, assemblers, financial institutions, distributors, retailers and trading companies. At the center of this circle are typically one or several megafirms. Unfortunately, the US businesses that can’t make it to the inside of that circle – the vast majority – are unable to prosper in China. And the Chinese government helps to pick who gets in, and who doesn’t. Megafirms meet megabanks The Chinese government does not need to own a controlling share in order to exert powerful influence. It can cause its companies to enter into new partnerships, diversify into new product lines, set up new production facilities, or expand distribution merely by signaling the desired outcomes through public or private statements, “introductions” to targeted partners and promises of new customers and revenue streams. The government also uses Chinese “megabanks” to drive economic growth according to national priorities. In 2018, nearly 65 per cent of all bank loans in China were to corporate entities, twice as high as in the U.S. Megafirms are provided funding at preferential rates, leaving those on the outside at a disadvantage. The banking sector in China is huge, with total assets of about $35 trillion in 2018, more than three times the country’s entire GDP. This circular financing feeds corporate growth and creates a circular system of codependency. Because foreign companies are outside the system, they are at inherent disadvantage when it comes to attaining local loans from Chinese banks. That creates another problem for Western companies. Most of them invest overseas with the goal of repatriating profits back home. China makes this very difficult. Which means they typically have to bring money in from their home countries – but because of Chinese tax rules and strict foreign exchange controls, they also have difficulty getting their investments back out. Impenetrable China A positive resolution to the trade war – either during the G-20 or sometime later – would be welcomed by many. But we believe that whatever agreements are reached on tariffs or intellectual property, these structural issues will persist. The US and other outside companies that want to do business in China face a dilemma: Do they reinvent themselves in an effort to become insiders in China? Doing so would not only require a change in mentality, but also a commitment to being “in China, for China.” Otherwise, China’s business ecosystem, with its megafirms and layers of affiliates with the government at the center of it all, will remain largely impenetrable for Western companies. Irrespective of what happens at the G-20, China is very unlikely to change a system that has created massive wealth and prosperity for the Chinese people. (Allen Morrison is Professor of Global Management, Arizona State University; Stewart Black is Professor of Management Practice in Global Leadership and Strategy, INSEAD) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

A Trump-Xi trade deal would do little to fix the real problems US companies face in China

<a href="https://www.wionews.com/world/fedex-sues-us-government-over-shipment-restrictions-230266">FedEx</a> warned Tuesday that its fiscal 2020 earnings outlook remains clouded by trade war uncertainty as the company's chief executive criticized the Trump administration's lurch towards protectionism.

Overall the company is projecting 2020 diluted earnings-per-share to be down by a "mid-single-digit" percentage point compared with the 2019 level.

FedEx expects higher operating income in fiscal 2020 from its domestic package and freight shipping services as growing e-commerce activity fuels higher revenues.

But operating income is expected to be dented at FedEx Express, its international shipping division, in part because of trade uncertainty.&nbsp;

"We've been very disappointed over the last few years with the assumptions that we made on the growth of international trade, particularly with the Trump administration," Chief Executive Fred Smith said on a conference call with financial analysts.

"The United States policy since 1934... was to expand international trade and now we have a huge dispute with China where the US has basically become protectionist, defined as 'I'll make everything I need in my own borders.'"

Smith, long an outspoken advocate of free trade, also took issue with China's policy on trade, which he described as "mercantilist."

US President Donald Trump and Chinese leader Xi Jinping are expected to meet at the G20 gathering in Japan later this week, an occasion that investors are hoping will bring the two countries closer to an agreement after months of tariffs, countermeasures and threats.

Smith said the company remained committed to operating in China and "completely dedicated" to comply with Chinese laws. &nbsp;

He said the company has experienced more audits "to some degree" at its Guangzhou hub in the wake of the US-China dispute.

FedEx again apologized over delivery problems involving Chinese telecommunications giant Huawei following a US crackdown on the company that Trump has linked to the <a href="https://www.wionews.com/world/us-hopes-to-re-launch-china-trade-talks-will-not-accept-conditions-on-tariffs-230453">US-China trade war</a>.

Smith said the company's newly-filed lawsuit against the Commerce Department over export restrictions was not directly related to the Huawei case but was due to a broader set of government actions that are "opaque" and put too much onus on delivery companies.

On Monday, FedEx sued the US Commerce Department over export restrictions it said to impose an "impossible burden" on delivery firms and asked a US District Court to block enforcement of the measures.

FedEx says the US rules make shippers liable for packages that could violate the restrictions, even if the shipper has no prior knowledge of the problem.

FedEx reported a net loss of $2 billion for the quarter ending May 31, compared with $1.1 billion in profits in the year-ago period.&nbsp;

The company cited lower international revenues and $316 million in costs associated with a voluntary employee buyout as factors in the loss.

Revenues rose three per cent overall to $17.8 billion.

Shares rose 0.7 per cent to $157.05 in after-hours trading.

FedEx warned Tuesday that its fiscal 2020 earnings outlook remains clouded by trade war uncertainty as the company's chief executive criticized the Trump administration's lurch towards protectionism.

FedEx warned Tuesday that its fiscal 2020 earnings outlook remains clouded by trade war uncertainty as the company's chief executive criticized the Trump administration's lurch towards protectionism. Overall the company is projecting 2020 diluted earnings-per-share to be down by a "mid-single-digit" percentage point compared with the 2019 level. FedEx expects higher operating income in fiscal 2020 from its domestic package and freight shipping services as growing e-commerce activity fuels higher revenues. But operating income is expected to be dented at FedEx Express, its international shipping division, in part because of trade uncertainty. "We've been very disappointed over the last few years with the assumptions that we made on the growth of international trade, particularly with the Trump administration," Chief Executive Fred Smith said on a conference call with financial analysts. "The United States policy since 1934... was to expand international trade and now we have a huge dispute with China where the US has basically become protectionist, defined as 'I'll make everything I need in my own borders.'" Smith, long an outspoken advocate of free trade, also took issue with China's policy on trade, which he described as "mercantilist." US President Donald Trump and Chinese leader Xi Jinping are expected to meet at the G20 gathering in Japan later this week, an occasion that investors are hoping will bring the two countries closer to an agreement after months of tariffs, countermeasures and threats. Smith said the company remained committed to operating in China and "completely dedicated" to comply with Chinese laws. He said the company has experienced more audits "to some degree" at its Guangzhou hub in the wake of the US-China dispute. FedEx again apologized over delivery problems involving Chinese telecommunications giant Huawei following a US crackdown on the company that Trump has linked to the US-China trade war. Smith said the company's newly-filed lawsuit against the Commerce Department over export restrictions was not directly related to the Huawei case but was due to a broader set of government actions that are "opaque" and put too much onus on delivery companies. On Monday, FedEx sued the US Commerce Department over export restrictions it said to impose an "impossible burden" on delivery firms and asked a US District Court to block enforcement of the measures. FedEx says the US rules make shippers liable for packages that could violate the restrictions, even if the shipper has no prior knowledge of the problem. FedEx reported a net loss of $2 billion for the quarter ending May 31, compared with $1.1 billion in profits in the year-ago period. The company cited lower international revenues and $316 million in costs associated with a voluntary employee buyout as factors in the loss. Revenues rose three per cent overall to $17.8 billion. Shares rose 0.7 per cent to $157.05 in after-hours trading.

FedEx offers cautious 2020 outlook as CEO slams United States, China on trade

<a href="https://www.wionews.com/world/us-hopes-to-re-launch-china-trade-talks-will-not-accept-conditions-on-tariffs-230453">US hopes to re-launch China trade talks, will not accept conditions on tariffs</a>

The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday.

<a href="https://www.wionews.com/india-news/us-secretary-of-state-of-state-mike-pompeo-to-meet-pm-modi-external-affairs-minister-s-jaishankar-today-230463">US Secretary of State of State Mike Pompeo to meet PM Modi, External Affairs Minister S Jaishankar today &nbsp;</a>

US Secretary of State Mike Pompeo will be meeting Prime Minister Narendra Modi in New Delhi today.&nbsp;

His meeting with PM Modi is scheduled to begin at 10 am followed by a meet with External Affairs Minister S Jaishankar at 12 pm.&nbsp;

<a href="https://www.wionews.com/world/us-border-chief-john-sanders-quits-amid-outcry-over-child-detainees-230455">US border chief John Sanders quits amid outcry over child detainees</a>

The acting head of the US Customs and Border Protection agency announced his resignation on Tuesday amid a public outcry over alarming detention conditions of migrant children in Texas.

<a href="https://www.wionews.com/world/robert-muller-to-testify-before-house-committees-on-us-russia-probe-in-july-congress-230456">Robert Muller to testify before House committees on US-Russia probe in July: Congress</a>

Former US special counsel Robert Mueller has agreed to testify in public on July 17 about his report into Russian interference in the 2016 presidential election, the House Judiciary and Intelligence Committees said Tuesday.

<a href="https://www.wionews.com/world/robots-to-take-20-million-jobs-worsening-inequality-study-230459">Robots to take 20 million jobs, worsening inequality: Study</a>

Robots are expected to take over some 20 million manufacturing jobs worldwide by 2030, extending a trend of worsening social inequality while boosting overall economic output, a new study shows.

&nbsp;

US hopes to re-launch China trade talks, will not accept conditions on tariffs The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday.

US hopes to re-launch China trade talks, will not accept conditions on tariffs The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday. US Secretary of State of State Mike Pompeo to meet PM Modi, External Affairs Minister S Jaishankar today US Secretary of State Mike Pompeo will be meeting Prime Minister Narendra Modi in New Delhi today. His meeting with PM Modi is scheduled to begin at 10 am followed by a meet with External Affairs Minister S Jaishankar at 12 pm. US border chief John Sanders quits amid outcry over child detainees The acting head of the US Customs and Border Protection agency announced his resignation on Tuesday amid a public outcry over alarming detention conditions of migrant children in Texas. Robert Muller to testify before House committees on US-Russia probe in July: Congress Former US special counsel Robert Mueller has agreed to testify in public on July 17 about his report into Russian interference in the 2016 presidential election, the House Judiciary and Intelligence Committees said Tuesday. Robots to take 20 million jobs, worsening inequality: Study Robots are expected to take over some 20 million manufacturing jobs worldwide by 2030, extending a trend of worsening social inequality while boosting overall economic output, a new study shows.

News brief: Big stories of the day

Lawyers for a senior executive at Chinese tech giant <a href="https://www.wionews.com/business-economy/huawei-ceo-says-underestimated-impact-of-us-ban-sees-revenue-dip-227902">Huawei</a> asked Canada's justice minister on Monday to quash extradition proceedings against Meng Wanzhou and for her to be released.

The court proceedings are scheduled to start on January 20. Meng is currently out on bail.

The United States wants to put Meng on trial for fraud for allegedly violating Iran sanctions and lying about it to US banks -- accusations that her lawyers dispute.

A copy of the letter to Justice Minister David Lametti was not made public.

But in a press release announcing the letter Meng's lawyers urged Lametti to "withdraw the proceedings because the extradition proceedings are without merit and cessation of the proceedings would be in the best interests of Canada's national interests."

They argue that the case is "palpably" political and "simply extraordinary" from legal, jurisdictional and foreign policy perspectives.

"In our view, Canada is at cross-roads respecting the United States' request that Canada extradite Ms&nbsp;Meng, for conduct that could not be an offence in Canada and which is at odds with Canadian values and established foreign policy regarding Iran," they said.

Under Canadian law, the justice minister can intervene in extradition cases.

Canada's relations with China have soured over Meng's arrest on a US warrant in December 2018 during a flight stopover in Vancouver.

In a move widely seen as retaliation and described by some observers as "hostage diplomacy," Beijing detained two Canadians -- former diplomat Michael Kovrig and businessman Michael Spavor -- and blocked Canadian agricultural shipments worth billions of dollars.

It later accused Kovrig of espionage and alleged that Spavor provided him with intelligence.

Former Canadian prime minister Jean Chretien recently urged Prime Minister Justin Trudeau to reject the US extradition request and cancel the case.

Foreign Minister Chrystia Freeland disagreed.

"It would set a very dangerous precedent for Canada to alter its behavior when it comes to honoring an extradition treaty in response to external pressure," she said.

Lametti's office said it would be "inappropriate" to comment while Meng's case is before the courts.

Lawyers for a senior executive at Chinese tech giant Huawei asked Canada's justice minister on Monday to quash extradition proceedings against Meng Wanzhou and for her to be released.

Lawyers for a senior executive at Chinese tech giant Huawei asked Canada's justice minister on Monday to quash extradition proceedings against Meng Wanzhou and for her to be released. The court proceedings are scheduled to start on January 20. Meng is currently out on bail. The United States wants to put Meng on trial for fraud for allegedly violating Iran sanctions and lying about it to US banks -- accusations that her lawyers dispute. A copy of the letter to Justice Minister David Lametti was not made public. But in a press release announcing the letter Meng's lawyers urged Lametti to "withdraw the proceedings because the extradition proceedings are without merit and cessation of the proceedings would be in the best interests of Canada's national interests." They argue that the case is "palpably" political and "simply extraordinary" from legal, jurisdictional and foreign policy perspectives. "In our view, Canada is at cross-roads respecting the United States' request that Canada extradite Ms Meng, for conduct that could not be an offence in Canada and which is at odds with Canadian values and established foreign policy regarding Iran," they said. Under Canadian law, the justice minister can intervene in extradition cases. Canada's relations with China have soured over Meng's arrest on a US warrant in December 2018 during a flight stopover in Vancouver. In a move widely seen as retaliation and described by some observers as "hostage diplomacy," Beijing detained two Canadians -- former diplomat Michael Kovrig and businessman Michael Spavor -- and blocked Canadian agricultural shipments worth billions of dollars. It later accused Kovrig of espionage and alleged that Spavor provided him with intelligence. Former Canadian prime minister Jean Chretien recently urged Prime Minister Justin Trudeau to reject the US extradition request and cancel the case. Foreign Minister Chrystia Freeland disagreed. "It would set a very dangerous precedent for Canada to alter its behavior when it comes to honoring an extradition treaty in response to external pressure," she said. Lametti's office said it would be "inappropriate" to comment while Meng's case is before the courts.

Huawei executive asks Canada to quash US extradition request

The US Commerce Department blacklisted five Chinese tech entities Friday in a new move against Beijing's supercomputing industry likely to raise tensions ahead of a meeting between President Trump and Xi Jinping next week.

The notice targets Sugon -- a prominent Chinese supercomputer manufacturer -- along with three of its microchip subsidiaries and a computing institute owned by the People's Liberation Army.

All of the entities will be effectively barred from obtaining US technology after the government determined they were "acting contrary to the national security or foreign policy interests of the United States."

Trade tensions between the world's top two economies have spilled over into the tech sector in recent months, with Trump's administration moving to essentially ban Chinese tech firm <a href="https://www.wionews.com/world/huawei-phone-sales-plunge-cutbacks-planned-as-us-pressure-bites-227979">Huawei</a> from the huge US market on security grounds.

In May, it added Huawei to an "entity list" of companies barred from receiving US-made components without permission from Washington, though the company was granted a 90-day reprieve.

Facebook and Google have since both announced they will move to cut off Huawei in order to comply with the US sanctions, further isolating the Chinese tech giant.

Beijing has responded with threats to release its own blacklist of "unreliable" foreign companies and individuals that appears aimed at pressuring foreign companies to maintain commercial relations with Huawei.

Earlier this month, Beijing summoned executives from American firms Dell and Microsoft and South Korea's Samsung, among others, to warn them that any moves to ramp down their businesses in China may lead to retaliation, The New York Times reported.

Trump and his Chinese counterpart Xi are set to meet next week on the sidelines of the G20 summit in Japan.

The US Commerce Department blacklisted five Chinese tech entities Friday in a new move against Beijing's supercomputing industry likely to raise tensions ahead of a meeting between President Trump and Xi Jinping next week.

The US Commerce Department blacklisted five Chinese tech entities Friday in a new move against Beijing's supercomputing industry likely to raise tensions ahead of a meeting between President Trump and Xi Jinping next week. The notice targets Sugon -- a prominent Chinese supercomputer manufacturer -- along with three of its microchip subsidiaries and a computing institute owned by the People's Liberation Army. All of the entities will be effectively barred from obtaining US technology after the government determined they were "acting contrary to the national security or foreign policy interests of the United States." Trade tensions between the world's top two economies have spilled over into the tech sector in recent months, with Trump's administration moving to essentially ban Chinese tech firm Huawei from the huge US market on security grounds. In May, it added Huawei to an "entity list" of companies barred from receiving US-made components without permission from Washington, though the company was granted a 90-day reprieve. Facebook and Google have since both announced they will move to cut off Huawei in order to comply with the US sanctions, further isolating the Chinese tech giant. Beijing has responded with threats to release its own blacklist of "unreliable" foreign companies and individuals that appears aimed at pressuring foreign companies to maintain commercial relations with Huawei. Earlier this month, Beijing summoned executives from American firms Dell and Microsoft and South Korea's Samsung, among others, to warn them that any moves to ramp down their businesses in China may lead to retaliation, The New York Times reported. Trump and his Chinese counterpart Xi are set to meet next week on the sidelines of the G20 summit in Japan.

US blocks more Chinese tech firms on national security concerns

Commerce and Industry Minister Piyush Goyal on Friday said India is well placed to handle the "crossfire" resulting from global trade war on the strength of the country's economy.

At a time when the world is witnessing trade wars across nations, India too will be impacted.

"Obviously, in a situation when the world is seeing trade wars across nations, across continents, India will come in the crossfire. But then it's a crossfire which we can handle," the minister said during Question Hour in Rajya Sabha.

The global trade war has been triggered by the US after it raised duties on imports, including aluminium and steel. Other countries, including India too retaliated by raising import duty on goods from the US.

The minister said irrespective of the world trade situation, India is looking at ways to "encash' opportunities to further exports. 
 
The minister further said India is competent to handle the international trade situation.

Goyal also dismissed contentions that India's exports have been hit badly after the US has terminated its Preferential Trade Treatment or GSP (Generalised System of Preferences) to India from June 5 this year.

"I would like to submit that the total impact of GSP is under $250-269 million in a year and for a country of size and strength of India, I can assure members (of the House) that it will not have any significant impact. India can handle the situation," he said when asked if India was discussing the issue with the US.

GSP, the minister said was unilateral, non-obligatory concession given by the US to India as a developing country.

"Some of the demands that were raised on India were such that India could not yield. I think national sovereignty and national interest is paramount," he said when asked if the government would initiate further negotiations in this regard with the US.

He further said India will continue to negotiate with all countries, including the US, but it will not be at the cost of sovereignty. 
 
On the country's exports, Goyal said it increased significantly during the last fiscal and in the current year also, the outward shipments are showing increasing trends.

He further said India has fortified its foreign exchange reserves and the government is taking pro-active measures to promote exports.

On a question related to the forthcoming visit of US Secretary of State Mike Pompeo to India, Goyal said there will be discussions on several issues.

Pompeo will be visiting India from June 25-27.&nbsp;

Commerce and Industry Minister Piyush Goyal on Friday said India is well placed to handle the "crossfire" resulting from global trade war on the strength of the country's economy.

Commerce and Industry Minister Piyush Goyal on Friday said India is well placed to handle the "crossfire" resulting from global trade war on the strength of the country's economy. At a time when the world is witnessing trade wars across nations, India too will be impacted. "Obviously, in a situation when the world is seeing trade wars across nations, across continents, India will come in the crossfire. But then it's a crossfire which we can handle," the minister said during Question Hour in Rajya Sabha. The global trade war has been triggered by the US after it raised duties on imports, including aluminium and steel. Other countries, including India too retaliated by raising import duty on goods from the US. The minister said irrespective of the world trade situation, India is looking at ways to "encash' opportunities to further exports. The minister further said India is competent to handle the international trade situation. Goyal also dismissed contentions that India's exports have been hit badly after the US has terminated its Preferential Trade Treatment or GSP (Generalised System of Preferences) to India from June 5 this year. "I would like to submit that the total impact of GSP is under $250-269 million in a year and for a country of size and strength of India, I can assure members (of the House) that it will not have any significant impact. India can handle the situation," he said when asked if India was discussing the issue with the US. GSP, the minister said was unilateral, non-obligatory concession given by the US to India as a developing country. "Some of the demands that were raised on India were such that India could not yield. I think national sovereignty and national interest is paramount," he said when asked if the government would initiate further negotiations in this regard with the US. He further said India will continue to negotiate with all countries, including the US, but it will not be at the cost of sovereignty. On the country's exports, Goyal said it increased significantly during the last fiscal and in the current year also, the outward shipments are showing increasing trends. He further said India has fortified its foreign exchange reserves and the government is taking pro-active measures to promote exports. On a question related to the forthcoming visit of US Secretary of State Mike Pompeo to India, Goyal said there will be discussions on several issues. Pompeo will be visiting India from June 25-27.

India well placed to deal with global trade crossfire, says Piyush Goyal

Harley-Davidson Inc will partner with China's Qianjiang Motorcycle Co to build a new smaller motorcycle than its trademark "big hogs", making good on promises to move more production outside the United States that have angered President Donald Trump.

Trump last year threatened to impose<a href="https://www.wionews.com/world/modi-reduced-tariffs-on-harley-davidson-motorcycles-by-50-i-said-it-was-still-unacceptable-trump-226103"> higher taxes on Harley</a> after it made plans to move production for European customers overseas, part of a longer-term strategy for dealing with lower sales in the US and higher costs because of trade tariffs.

The partnership Harley outlined on Wednesday is aimed both at taking a bigger chunk of China's huge bike and moped market, while also fitting in with a plan to cut costs and source half of all sales outside the United States by 2027.

The new bike would have an engine displacement of 338 cubic centimetres, one of the smallest in the company's 116-year old history, and would be sold in China from the end of 2020.

Harley's existing range of motorcycles are generally far larger and come with high price tags and engine capacities of more than 601 cubic centimetres.

That has made the company a niche seller in Asia's big markets, where lightweight bikes and scooters dominate and left it struggling to win over consumers globally to replace a traditional US customer base which is ageing.

Harley declined to reveal a price range for the new motorbike, but Qianjiang said it would be "affordable" and Harley said it would be introduced elsewhere in Asia after the initial launch in China.

"The international motorcycle market is huge, but Harley-Davidson has not been able to penetrate it with large/expensive bikes," said Craig Kennison, an analyst with brokerage Baird.

"Our recent dealer survey work reinforces the need for Harley-Davidson to add more first-time riders. For many, affordability is an issue."

Harley's sales in China grew 27 per cent in 2018 compared to 2017, and the company has already boosted investment at its Thailand plant to serve that market and avoid additional import duty.

Harley said it had picked Qianjiang, owned by Chinese Volvo brand operator Geely, based on its experience developing upscale smaller motorcycles, supply base and knowledge of emerging markets.

The company said in 2018 that it planned to launch lightweight motorcycles in Asia and electric bikes globally. It expects to launch its first electric motorcycle without the traditional clutch and gear-shift controls later this year.

As part of a plan it calls "More Roads to Harley-Davidson", the company expects to spend $675 million-$825 million over the next four years, cutting costs and generating $5.9 billion-$6.4 billion in revenue in 2022.

Harley-Davidson Inc will partner with China's Qianjiang Motorcycle Co to build a new smaller motorcycle than its trademark "big hogs", making good on promises to move more production outside the United States that have angered President Donald Trump.

Harley-Davidson Inc will partner with China's Qianjiang Motorcycle Co to build a new smaller motorcycle than its trademark "big hogs", making good on promises to move more production outside the United States that have angered President Donald Trump. Trump last year threatened to impose higher taxes on Harley after it made plans to move production for European customers overseas, part of a longer-term strategy for dealing with lower sales in the US and higher costs because of trade tariffs. The partnership Harley outlined on Wednesday is aimed both at taking a bigger chunk of China's huge bike and moped market, while also fitting in with a plan to cut costs and source half of all sales outside the United States by 2027. The new bike would have an engine displacement of 338 cubic centimetres, one of the smallest in the company's 116-year old history, and would be sold in China from the end of 2020. Harley's existing range of motorcycles are generally far larger and come with high price tags and engine capacities of more than 601 cubic centimetres. That has made the company a niche seller in Asia's big markets, where lightweight bikes and scooters dominate and left it struggling to win over consumers globally to replace a traditional US customer base which is ageing. Harley declined to reveal a price range for the new motorbike, but Qianjiang said it would be "affordable" and Harley said it would be introduced elsewhere in Asia after the initial launch in China. "The international motorcycle market is huge, but Harley-Davidson has not been able to penetrate it with large/expensive bikes," said Craig Kennison, an analyst with brokerage Baird. "Our recent dealer survey work reinforces the need for Harley-Davidson to add more first-time riders. For many, affordability is an issue." Harley's sales in China grew 27 per cent in 2018 compared to 2017, and the company has already boosted investment at its Thailand plant to serve that market and avoid additional import duty. Harley said it had picked Qianjiang, owned by Chinese Volvo brand operator Geely, based on its experience developing upscale smaller motorcycles, supply base and knowledge of emerging markets. The company said in 2018 that it planned to launch lightweight motorcycles in Asia and electric bikes globally. It expects to launch its first electric motorcycle without the traditional clutch and gear-shift controls later this year. As part of a plan it calls "More Roads to Harley-Davidson", the company expects to spend $675 million-$825 million over the next four years, cutting costs and generating $5.9 billion-$6.4 billion in revenue in 2022.

Harley-Davidson strikes deal to build smaller bike in China

France and Germany will increase their efforts to reduce tensions over Iran, but time was running out and the risk of war could not be ruled out, their foreign ministers said on Wednesday.&nbsp;

"We want to unify our efforts so that there is a de-escalation process that starts," French Foreign Minister Jean-Yves Le Drian told reporters after a cabinet meeting in Paris.

"There is still time and we hope all the actors show more calm. There is still time, but only a little time," he said.

Britain, France and Germany, known as the E3, plan a new push to keep Iran in the 2015 nuclear deal despite Tehran`s threat to violate one of its central limits, but they may be nearing the end of the diplomatic road they embarked on more than 15 years ago, diplomats told Reuters on Tuesday.

Germany Foreign Minister Heiko Maas, who attended the French cabinet meeting, echoed those comments adding that "the risk of war in the Gulf has not been averted."

"We need to do everything so that it doesn`t come to this. That`s why we are talking to all sides. I was in Iran and we are also talking with the Americans. We need to de-escalate through dialogue. It is a time of `diplomacy first` and that`s what we are committed to."

The E3 countries have strained to keep the accord between major powers and Iran on life support since US President Donald Trump unilaterally withdrew from it last year and began re-imposing American sanctions.

Le Drian said Iran`s threat on Monday to breach the 2015 nuclear deal`s limit on its uranium hexafluoride stocks within 10 days was very worrying and not in Tehran`s interest, but he also pointed the finger at the United States.&nbsp;

"We also consider the US` decision to break with the accord is not good and that its maximum pressure campaign is contributing to tensions," he said.

France and Germany will increase their efforts to reduce tensions over Iran, but time was running out and the risk of war could not be ruled out, their foreign ministers said on Wednesday.

France and Germany will increase their efforts to reduce tensions over Iran, but time was running out and the risk of war could not be ruled out, their foreign ministers said on Wednesday. "We want to unify our efforts so that there is a de-escalation process that starts," French Foreign Minister Jean-Yves Le Drian told reporters after a cabinet meeting in Paris. "There is still time and we hope all the actors show more calm. There is still time, but only a little time," he said. Britain, France and Germany, known as the E3, plan a new push to keep Iran in the 2015 nuclear deal despite Tehran`s threat to violate one of its central limits, but they may be nearing the end of the diplomatic road they embarked on more than 15 years ago, diplomats told Reuters on Tuesday. Germany Foreign Minister Heiko Maas, who attended the French cabinet meeting, echoed those comments adding that "the risk of war in the Gulf has not been averted." "We need to do everything so that it doesn`t come to this. That`s why we are talking to all sides. I was in Iran and we are also talking with the Americans. We need to de-escalate through dialogue. It is a time of `diplomacy first` and that`s what we are committed to." The E3 countries have strained to keep the accord between major powers and Iran on life support since US President Donald Trump unilaterally withdrew from it last year and began re-imposing American sanctions. Le Drian said Iran`s threat on Monday to breach the 2015 nuclear deal`s limit on its uranium hexafluoride stocks within 10 days was very worrying and not in Tehran`s interest, but he also pointed the finger at the United States. "We also consider the US` decision to break with the accord is not good and that its maximum pressure campaign is contributing to tensions," he said.

France, Germany to increase efforts to reduce Iran tensions, avert war: Ministers

China on Tuesday urged the United States to properly solve<a href="https://www.wionews.com/world/amid-heightened-us-china-tensions-science-suffers-collateral-damage-228220"> trade disputes through consultations </a>based on the principles of equality and mutual respect.

Foreign ministry spokesman Lu Kang made the statement at a regular press conference in Beijing, as a series of public hearings regarding proposed US tariffs on approximately $300 billion worth of Chinese products kicked off in Washington D.C. on Monday.

The hearings, to be held by the Office of the US Trade Representative (USTR) daily for two weeks, will be attended by hundreds of witnesses, most of whom are expected to voice their opposition to the proposed tariffs and explain how trade protectionism would hurt their businesses, industries and consumers.

"I have noticed that, as the hearing for proposed US tariffs&nbsp;on Chinese imports gets underway, the waves of voices within the United States against additional tariffs are going higher and higher. Even (Larry) Kudlow, director of the White House National Economic Council, openly admitted that US businesses and consumers will pay for the new tariffs. In addition, according to a recent report by Goldman Sachs, the costs of the tariffs imposed by the US government completely shifted to American companies and families, and their impact on American commodity prices is greater than previously estimated," said Lu.

Twenty-five per cent tariffs on some 250 billion dollars' worth in goods from China are currently in effect, and have already backfired.

Last week, over 600 US companies and associations sent a letter to the White House, urging it to stop escalating trade tensions with China through tariff hikes.

According to the anti-tariff campaign "Tariffs Hurt the Heartland," the proposed new tariffs, if imposed, would result in the loss of more than 2 million US jobs, add more than 2,000 dollars in costs for an average American family of four, and reduce the value of US gross domestic product by 1 per cent, combined with the impact of previously implemented tariffs and retaliatory measures imposed by the Chinese side.

The spokesman stressed that for a long period of time, trade and investment brought huge benefits to industries and consumers in both the US and China.

"History has proved that the trade disputes between the United States and China can be properly resolved through consultation, as long as the negotiation and dialogue are based on mutual respect, equality and mutual benefit. Any practice against such principles is doomed to fail," he said.

China on Tuesday urged the United States to properly solve trade disputes through consultations based on the principles of equality and mutual respect. Foreign ministry spokesman Lu Kang made the statement at a regular press conference in Beijing, as a series of public hearings regarding proposed US tariffs on approximately $300 billion worth of Chinese products kicked off in Washington D.

China on Tuesday urged the United States to properly solve trade disputes through consultations based on the principles of equality and mutual respect. Foreign ministry spokesman Lu Kang made the statement at a regular press conference in Beijing, as a series of public hearings regarding proposed US tariffs on approximately $300 billion worth of Chinese products kicked off in Washington D.C. on Monday. The hearings, to be held by the Office of the US Trade Representative (USTR) daily for two weeks, will be attended by hundreds of witnesses, most of whom are expected to voice their opposition to the proposed tariffs and explain how trade protectionism would hurt their businesses, industries and consumers. "I have noticed that, as the hearing for proposed US tariffs on Chinese imports gets underway, the waves of voices within the United States against additional tariffs are going higher and higher. Even (Larry) Kudlow, director of the White House National Economic Council, openly admitted that US businesses and consumers will pay for the new tariffs. In addition, according to a recent report by Goldman Sachs, the costs of the tariffs imposed by the US government completely shifted to American companies and families, and their impact on American commodity prices is greater than previously estimated," said Lu. Twenty-five per cent tariffs on some 250 billion dollars' worth in goods from China are currently in effect, and have already backfired. Last week, over 600 US companies and associations sent a letter to the White House, urging it to stop escalating trade tensions with China through tariff hikes. According to the anti-tariff campaign "Tariffs Hurt the Heartland," the proposed new tariffs, if imposed, would result in the loss of more than 2 million US jobs, add more than 2,000 dollars in costs for an average American family of four, and reduce the value of US gross domestic product by 1 per cent, combined with the impact of previously implemented tariffs and retaliatory measures imposed by the Chinese side. The spokesman stressed that for a long period of time, trade and investment brought huge benefits to industries and consumers in both the US and China. "History has proved that the trade disputes between the United States and China can be properly resolved through consultation, as long as the negotiation and dialogue are based on mutual respect, equality and mutual benefit. Any practice against such principles is doomed to fail," he said.

Waves of voices within US against additional tariffs going higher: China

China's Huawei Technologies Co Ltd has taken a <a href="https://www.wionews.com/business-economy/huawei-ceo-says-underestimated-impact-of-us-ban-sees-revenue-dip-227902">harder-than-expected hit from a US ban</a>, the company's founder and CEO Ren Zhengfei said and slashed revenue expectations for the year.

Ren's downbeat assessment that the ban will hit revenue by $30 billion, the first time Huawei has quantified the impact of the US action, comes as a surprise after weeks of defiant comments from company executives who maintained Huawei was technologically self-sufficient.

The United States has put Huawei on an export blacklist citing national security issues, barring US suppliers from selling to the world's largest telecommunications equipment maker and No.2 maker of smartphones, without special approval.

The firm has denied its products pose a security threat.

The ban has forced companies, including Alphabet Inc's Google and British chip designer ARM to limit or cease their relationships with the Chinese company.

Huawei had not expected that US determination to "crack" the company would be "so strong and so pervasive", Ren said, speaking at the company's Shenzhen headquarters on Monday.

Two US tech experts, George Gilder and Nicholas Negroponte, also joined the session.

"We did not expect they would attack us on so many aspects," Ren said, adding he expects a revival in business in 2021.

"We cannot get components supply, cannot participate in many international organisations, cannot work closely with many universities, cannot use anything with US components, and cannot even establish a connection with networks that use such components."

Huawei, which turned in a revenue of 721.2 billion yuan ($104 billion) last year, expects revenue of around $100 billion this year and the next, Ren said. This compares to an initial target for growth in 2019 to between $125 billion and $130 billion depending on foreign exchange fluctuations.

Trade war

The Trump administration slapped sanctions on Huawei at a time when US-China trade talks hit rough waters, prompting assertions from China's leaders about the country's progress in achieving self-sufficiency in the key semiconductor business.

Huawei has also said it could roll out its Hongmeng operating system (OS), which is being tested, within nine months if needed, as its phones face being cut off from updates of Google's Android OS in the wake of the ban.

But industry insiders have remained sceptical that Chinese chip makers can quickly meet the challenge of supplying Huawei's needs and those of other domestic technology firms.

Negroponte, a founder of the Massachusetts Institute of Technology Media Lab, said the US ban was a mistake.

"Our president has already said publicly that he would reconsider Huawei if we can make a trade deal. So clearly that is not about national security," he said.

"It is about something else," Negroponte added.

Huawei's smartphone sales have, however, been hit by the uncertainty. Ren said the firm's international smartphone shipments plunged 40%. While he did not give the time period, a spokesman clarified the CEO was referring to the past month.

Bloomberg reported on Sunday that Huawei was preparing for a 40-60% drop in international smartphone shipments.

The CEO, however, said Huawei will not cut research and development spending despite the expected hit from the ban to the company's finances and would not have large-scale layoffs.

China's Huawei Technologies Co Ltd has taken a harder-than-expected hit from a US ban, the company's founder and CEO Ren Zhengfei said and slashed revenue expectations for the year.

China's Huawei Technologies Co Ltd has taken a harder-than-expected hit from a US ban, the company's founder and CEO Ren Zhengfei said and slashed revenue expectations for the year. Ren's downbeat assessment that the ban will hit revenue by $30 billion, the first time Huawei has quantified the impact of the US action, comes as a surprise after weeks of defiant comments from company executives who maintained Huawei was technologically self-sufficient. The United States has put Huawei on an export blacklist citing national security issues, barring US suppliers from selling to the world's largest telecommunications equipment maker and No.2 maker of smartphones, without special approval. The firm has denied its products pose a security threat. The ban has forced companies, including Alphabet Inc's Google and British chip designer ARM to limit or cease their relationships with the Chinese company. Huawei had not expected that US determination to "crack" the company would be "so strong and so pervasive", Ren said, speaking at the company's Shenzhen headquarters on Monday. Two US tech experts, George Gilder and Nicholas Negroponte, also joined the session. "We did not expect they would attack us on so many aspects," Ren said, adding he expects a revival in business in 2021. "We cannot get components supply, cannot participate in many international organisations, cannot work closely with many universities, cannot use anything with US components, and cannot even establish a connection with networks that use such components." Huawei, which turned in a revenue of 721.2 billion yuan ($104 billion) last year, expects revenue of around $100 billion this year and the next, Ren said. This compares to an initial target for growth in 2019 to between $125 billion and $130 billion depending on foreign exchange fluctuations. Trade war The Trump administration slapped sanctions on Huawei at a time when US-China trade talks hit rough waters, prompting assertions from China's leaders about the country's progress in achieving self-sufficiency in the key semiconductor business. Huawei has also said it could roll out its Hongmeng operating system (OS), which is being tested, within nine months if needed, as its phones face being cut off from updates of Google's Android OS in the wake of the ban. But industry insiders have remained sceptical that Chinese chip makers can quickly meet the challenge of supplying Huawei's needs and those of other domestic technology firms. Negroponte, a founder of the Massachusetts Institute of Technology Media Lab, said the US ban was a mistake. "Our president has already said publicly that he would reconsider Huawei if we can make a trade deal. So clearly that is not about national security," he said. "It is about something else," Negroponte added. Huawei's smartphone sales have, however, been hit by the uncertainty. Ren said the firm's international smartphone shipments plunged 40%. While he did not give the time period, a spokesman clarified the CEO was referring to the past month. Bloomberg reported on Sunday that Huawei was preparing for a 40-60% drop in international smartphone shipments. The CEO, however, said Huawei will not cut research and development spending despite the expected hit from the ban to the company's finances and would not have large-scale layoffs.

US ban hurting more than expected, to wipe $30 billion off revenue: Huawei CEO Ren Zhengfei

By Amitrajeet A Batabyal&nbsp;

President Donald Trump’s trade war with China is based on two basic and complementary assumptions: The US economy is strong and, perhaps more importantly, stronger than the Chinese economy.

Last summer when the war began heating up, both assumptions were certainly true. The American economy was booming, while China’s was slowing. Hence, the US was in a better position to withstand any pain in a tariff war of attrition.

But the first of those assumptions, at least, is beginning to falter as signs grow of economic weakness in the US.

As an economist who conducts research in international trade, I believe that a weaker US economy would likely affect Trump’s ability to engage in a prolonged trade war with China – no matter how much he might want to.

Signs of Weakness

The US economy has been expanding for a decade now, and no economy can continue to grow indefinitely. The May jobs report was the latest indicator that the party may be coming to an end.

The report showed that the US economy added only 75,000 jobs that month, a significantly lower number than the 224,000 jobs added in April. Even though the unemployment rate stayed at the extremely low figure of 3.6 per cent, worryingly, there was virtually no wage growth. In addition, another key metric, the so-called ISM Manufacturing Index, fell to its lowest level in Trump’s presidency in May.

And while GDP growth has remained fairly robust, there have been other harbingers of underlying weakness in recent months, including a bond market signal that a recession may be on the horizon and a broad measure of the health of the US economy that recorded its slowest increase in more than two years.

Putting this all together, it suggests a key premise behind Trump’s trade war with China may not hold up for much longer.

Trade War’s Role

One of the reasons to blame for economic sluggishness is the trade war itself and specifically Trump’s use of tariffs to prosecute it.

Contrary to what he has said in the past, elementary trade theory shows that tariffs not only hurt the intended target but the tariff-imposing nation as well. This fundamental theoretical prediction is now being borne out in practice.

For instance, a recent and ongoing study by a group of economists shows that the higher prices resulting from Trump’s tariffs on China have been paid largely by US retailers, and some of them may soon be passed on to consumers. A separate study focused on washing machines found that tariffs resulted in an average 12 per cent increase in the price of the appliance, whether it was imported or made domestically.

Then there’s the impact of the retaliatory tariffs. Studies show that the US coal, crude oil and agricultural sectors have all been detrimentally affected by Chinese tariffs imposed in response. In addition, there is a reason to believe that the slowdown in American job growth is being felt most acutely in the sectors that are most susceptible to trade tensions such as manufacturing, construction, mining and logging.

In other words, if the deleterious impacts of Trump’s trade war with China continue to be felt in an economy that is weakening, it is certainly likely that there will be much greater opposition to these tariffs from industry groups and lawmakers.

These possibilities cast serious doubt on Trump’s ability to continue – let alone achieve the concessions he might need to win – a protracted trade war with China.

Fed to the Rescue?

Trump may end up having an unexpected ally in the Federal Reserve, however.

Evidence of weakness has already ended the US central bank’s policy of monetary tightening by raising interest rates. The latest data will no doubt put considerable pressure on the Fed to actually cut rates to avoid a more sustained slowdown.

If it does, then the Fed-driven stimulation will mitigate some of the pain felt by Americans as a result of Trump’s trade war with China and allow him to continue to prosecute his trade war.

High Stakes

That being said, it is still too early to say definitively that the US economy is cooling.

And, given Trump’s unpredictability, it’s impossible to forecast what may happen no matter what. At least for now, the president appears to have no intention of backing down.

But for me, a weakening economy adds to the reasons why this trade war is not only futile but harmful. For one thing, I believe tariffs alone cannot address the underlying structural problems that afflict US-China trade.

And let’s not forget that the trade war has global repercussions. The Organisation for Economic Cooperation and Development recently warned that an escalation of this trade war – as Trump has repeatedly threatened – will damage the rest of the world, trimming 0.7 per cent off global growth by 2021. That may not sound like much, but this trimming amounts to a whopping $600 billion in lost economic activity.

It’s a reminder that the stakes of this war are enormous.

(Arthur J. Gosnell Professor of Economics, Rochester Institute of Technology)

(This article was originally published on The Conversation. Read the<a href="https://theconversation.com/could-a-weakening-us-economy-imperil-trumps-trade-war-against-china-118576"> original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp; 
&nbsp;

By Amitrajeet A Batabyal President Donald Trump’s trade war with China is based on two basic and complementary assumptions: The US economy is strong and, perhaps more importantly, stronger than the Chinese economy.

By Amitrajeet A Batabyal President Donald Trump’s trade war with China is based on two basic and complementary assumptions: The US economy is strong and, perhaps more importantly, stronger than the Chinese economy. Last summer when the war began heating up, both assumptions were certainly true. The American economy was booming, while China’s was slowing. Hence, the US was in a better position to withstand any pain in a tariff war of attrition. But the first of those assumptions, at least, is beginning to falter as signs grow of economic weakness in the US. As an economist who conducts research in international trade, I believe that a weaker US economy would likely affect Trump’s ability to engage in a prolonged trade war with China – no matter how much he might want to. Signs of Weakness The US economy has been expanding for a decade now, and no economy can continue to grow indefinitely. The May jobs report was the latest indicator that the party may be coming to an end. The report showed that the US economy added only 75,000 jobs that month, a significantly lower number than the 224,000 jobs added in April. Even though the unemployment rate stayed at the extremely low figure of 3.6 per cent, worryingly, there was virtually no wage growth. In addition, another key metric, the so-called ISM Manufacturing Index, fell to its lowest level in Trump’s presidency in May. And while GDP growth has remained fairly robust, there have been other harbingers of underlying weakness in recent months, including a bond market signal that a recession may be on the horizon and a broad measure of the health of the US economy that recorded its slowest increase in more than two years. Putting this all together, it suggests a key premise behind Trump’s trade war with China may not hold up for much longer. Trade War’s Role One of the reasons to blame for economic sluggishness is the trade war itself and specifically Trump’s use of tariffs to prosecute it. Contrary to what he has said in the past, elementary trade theory shows that tariffs not only hurt the intended target but the tariff-imposing nation as well. This fundamental theoretical prediction is now being borne out in practice. For instance, a recent and ongoing study by a group of economists shows that the higher prices resulting from Trump’s tariffs on China have been paid largely by US retailers, and some of them may soon be passed on to consumers. A separate study focused on washing machines found that tariffs resulted in an average 12 per cent increase in the price of the appliance, whether it was imported or made domestically. Then there’s the impact of the retaliatory tariffs. Studies show that the US coal, crude oil and agricultural sectors have all been detrimentally affected by Chinese tariffs imposed in response. In addition, there is a reason to believe that the slowdown in American job growth is being felt most acutely in the sectors that are most susceptible to trade tensions such as manufacturing, construction, mining and logging. In other words, if the deleterious impacts of Trump’s trade war with China continue to be felt in an economy that is weakening, it is certainly likely that there will be much greater opposition to these tariffs from industry groups and lawmakers. These possibilities cast serious doubt on Trump’s ability to continue – let alone achieve the concessions he might need to win – a protracted trade war with China. Fed to the Rescue? Trump may end up having an unexpected ally in the Federal Reserve, however. Evidence of weakness has already ended the US central bank’s policy of monetary tightening by raising interest rates. The latest data will no doubt put considerable pressure on the Fed to actually cut rates to avoid a more sustained slowdown. If it does, then the Fed-driven stimulation will mitigate some of the pain felt by Americans as a result of Trump’s trade war with China and allow him to continue to prosecute his trade war. High Stakes That being said, it is still too early to say definitively that the US economy is cooling. And, given Trump’s unpredictability, it’s impossible to forecast what may happen no matter what. At least for now, the president appears to have no intention of backing down. But for me, a weakening economy adds to the reasons why this trade war is not only futile but harmful. For one thing, I believe tariffs alone cannot address the underlying structural problems that afflict US-China trade. And let’s not forget that the trade war has global repercussions. The Organisation for Economic Cooperation and Development recently warned that an escalation of this trade war – as Trump has repeatedly threatened – will damage the rest of the world, trimming 0.7 per cent off global growth by 2021. That may not sound like much, but this trimming amounts to a whopping $600 billion in lost economic activity. It’s a reminder that the stakes of this war are enormous. (Arthur J. Gosnell Professor of Economics, Rochester Institute of Technology) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

Could a weakening US economy imperil Trump’s trade war against China?

Beijing on Tuesday slammed what it called "irresponsible and erroneous comments" by Washington about a proposed <a href="https://www.wionews.com/world/hong-kong-businesses-pledge-closures-as-extradition-anger-builds-226173">Hong Kong law</a> that would allow extraditions to mainland China after the United States expressed concerns about the legislation.

"We demand that the US side... be cautious and stop interfering in Hong Kong affairs and <a href="https://www.wionews.com/world/china-backs-hong-kong-extradition-law-opposes-foreign-interference-225947">China's internal affairs</a> in any form," foreign ministry spokesman Geng Shuang said at a regular press briefing.

Earlier in the day, US State Department spokesperson&nbsp;Morgan <a href="https://www.wionews.com/world/changes-in-fugitive-offenders-ordinance-could-undermine-hong-kongs-autonomy-us-226098">Ortagus in media briefing expressed "grave concern"</a> about the Hong Kong government’s proposed amendments to its fugitive offenders ordinance. 
&nbsp; 
She said a peaceful demonstration on Sunday by hundreds of thousands of people in Hong Kong "clearly shows the public’s opposition to the proposed amendments."

"The United States shares the concern of many in Hong Kong that the lack of procedural protection in the proposed amendments could undermine Hong Kong’s autonomy and negatively impact the territory’s longstanding protections of human rights, fundamental freedoms and democratic values," she said.

Ortagus said the United States was concerned that the amendments could damage Hong Kong’s business environment "and subject our citizens residing in or visiting Hong Kong to China’s capricious judicial system."

Watch: Hong Kong's largest protest since 1997

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"Any amendments to the fugitive offenders ordinance should be pursued with great care and in full consultation with a broad range of local and international stakeholders who may be affected by the amendments," she said.

Hong Kong leader Carrie Lam vowed on Monday to push ahead with the amendments despite the city's biggest protest since its handover from British to Chinese rule in 1997.

Britain handed Hong Kong back to China under a "one country, two systems" formula with guarantees that its autonomy and freedoms, including an independent justice system, would be protected.

But many accuse China of extensive meddling in many sectors, denying democratic reforms and squeezing freedoms.

Beijing on Tuesday slammed what it called "irresponsible and erroneous comments" by Washington about a proposed Hong Kong law that would allow extraditions to mainland China after the United States expressed concerns about the legislation.

Beijing on Tuesday slammed what it called "irresponsible and erroneous comments" by Washington about a proposed Hong Kong law that would allow extraditions to mainland China after the United States expressed concerns about the legislation. "We demand that the US side... be cautious and stop interfering in Hong Kong affairs and China's internal affairs in any form," foreign ministry spokesman Geng Shuang said at a regular press briefing. Earlier in the day, US State Department spokesperson Morgan Ortagus in media briefing expressed "grave concern" about the Hong Kong government’s proposed amendments to its fugitive offenders ordinance. She said a peaceful demonstration on Sunday by hundreds of thousands of people in Hong Kong "clearly shows the public’s opposition to the proposed amendments." "The United States shares the concern of many in Hong Kong that the lack of procedural protection in the proposed amendments could undermine Hong Kong’s autonomy and negatively impact the territory’s longstanding protections of human rights, fundamental freedoms and democratic values," she said. Ortagus said the United States was concerned that the amendments could damage Hong Kong’s business environment "and subject our citizens residing in or visiting Hong Kong to China’s capricious judicial system." Watch: Hong Kong's largest protest since 1997 × "Any amendments to the fugitive offenders ordinance should be pursued with great care and in full consultation with a broad range of local and international stakeholders who may be affected by the amendments," she said. Hong Kong leader Carrie Lam vowed on Monday to push ahead with the amendments despite the city's biggest protest since its handover from British to Chinese rule in 1997. Britain handed Hong Kong back to China under a "one country, two systems" formula with guarantees that its autonomy and freedoms, including an independent justice system, would be protected. But many accuse China of extensive meddling in many sectors, denying democratic reforms and squeezing freedoms.

China demands US 'stop interfering' in Hong Kong

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