China’s response to US President Donald Trump’s imposition of new tariffs on Chinese goods last month with their own 25 percent tariffs is a “proportional” response, a writer and lecturer on China tells Radio Sputnik.
Beijing imposed retaliatory tariffs of up to 25 percent on at least 120 US products April 2 in response to Trump's imposition of tariffs on billions in imports from China the month prior.
"I think the responses by China are very measured," Jude Woodward told Radio Sputnik's Loud & Clear. "They were announced previously in response to the US tariff on steel and aluminum, [which is a trade action] that has a value of about $3 billion of Chinese goods."
"So, China announced that it would impose tariffs on approximately $3 billion of US goods. So, that's an exactly proportionate response. It would be unbelievable if China made no response at all. I think this is a response that says, ‘We will respond, but we will not escalate this tariff war,'" Woodward told hosts John Kiriakou and Brian Becker.
Last month, Trump signed a memorandum to slap new tariffs on imports from China. The order imposed a 25 percent import tax on steel and a 10 percent import tax on aluminum. According to the White House, the tariffs are designed to offset the advantages that China allegedly creates for itself through unfair trade practices.
Late Sunday, China's Finance Ministry announced a list of tariffs on up to $3 billion in US goods. The measures, which took effect Monday, increased tariffs by up to 25 percent on more than 100 US products, including frozen pork, wine and certain fruits and nuts.
According to Sputnik news analyst Walter Smolarek, who spoke to Loud & Clear, it is the US that has mistreated Chinese manufacturers rather than the other way around.
"The US corporations that operate in China make tremendous profits off of the relatively low wages they pay Chinese workers," Smolarek noted.
Although Trump has repeatedly claimed that China's unfair trade practices, among which he counts stealing technologies and intellectual property, negatively impact the US economy and its workers, Woodward disagreed.
"Nobody is forcing any company to hand over technology to China. China has been acquiring technological know-how, not by things like reverse-engineering, which the West would describe as stealing intellectual property; rather, China has been investing in foreign firms that already have the technology. That's perfectly reasonable," Woodward explained.
Just days after initiating its 'petroyuan' futures contract, and hours after an unprecedented announcement that China will pay for oil in yuan, The Global Times, the unofficial mouthpiece of the Chinese government, printed a remarkable story from 'one of its editors' highlighting the 'petroyuan' and its potential to topple the US Dollar as global reserve currency.
The Shanghai debut of China's first yuan-denominated crude futures trading market on Monday proved a great success, with major domestic and foreign traders displaying active interest. Total turnover amounted to 18.3 billion yuan ($2.9 billion) on the first trading day.
The market's better-than-expected performance is believed to have significantly contributed to the recent strength of the yuan on global currency markets.
As China largely depends on crude imports, price volatility in the commodity market is a major impediment. It launched the crude futures market to address the problem and also to gain more pricing power over the crucial commodity.
An important move by Beijing to open up its financial sector, the new crude benchmark has garnered increasing attention, because it challenges the current dollar-dominated pricing scheme of crude oil markets - commonly known as the petrodollar system - which helps underpin the dollar's status as the major international reserve currency.
Once the yuan-denominated crude futures market is established as a major oil benchmark with active trading volume and significant domestic and global investor participation, the acceptance of the Chinese yuan as a mode of global transaction will rise.
Analysts expect sufficient demand for crude futures contracts from both industrial and financial clients, as they need a tool to manage risk and hedge against inflation. The market offers companies in the real economy a hedging tool that can better reflect market conditions in Asia.
The evident enthusiasm for the new yuan-denominated crude contracts in the past few days will have pleased the Shanghai International Energy Exchange (INE) and China's regulators. They aim to establish a third global crude benchmark in the country.
The widespread pricing and trading of crude oil in the yuan, or the "petroyuan," is likely to shake people's confidence in the US dollar, and theoretically back up the value of China's yuan in the global market place.
No comments:
Post a Comment