Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
Europe could have been a winner in the trade war between China and the US, says political analyst Shaun Rein at the Thinkers Forum. Not only did they lose the opportunity to win from the trade war, but they are going to be the larger economic losers of the next decade, becoming an open-air museum, he adds.
Shanghai-based business analyst Shaun Rein explains why China has the upper hand in the current trade war with the US. For anything the US does not want to send to China, China has an alternative to hit back, he says at the Thinkers Forum.
U.S. President Trump has threatened a 100% tariff hike on Chinese goods, and Harry Broadman, former US Assistant Trade Representative and Chief of Staff of the President’s Council of Economic Advisers, tries to make sense out of both countries’ moves at Al Jazeera.
Leading economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, explains at CNBC why China can walk away from a trade agreement with the US if they do not like it, although its economy is not very bright at this stage. He does not expect to see any great push to improve consumption or the economy at large, as the leadership is happy with the current modest growth.
Many observers wrongly see the current trade war between China and the US as a Cold War 2.0, says political analyst Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know® in an interview with Dwarkesh Patel. If American politicians started this war without seeing the difference from a cold war, it might be tough to bring it to an end, he adds.
U.S. President Donald Trump may be enthusiastic about the trade deal between China and the U.S., which was closed in London this week. However, business analyst Shaun Rein points out that the deal is lacking crucial details and might not work, as he notes in The Economic Times. “So, the economy in China is not booming, but China is not going to blink. They have the resolve to push hard back against Trump,” he adds.
Shaun Rein:
Trump is saying the deal has been signed and he has been talking about that the Chinese are going to send rare earths and magnets in advance to whatever the United States needs because what you have seen in the last month is the lack of rare earths that were exported to the United States has really crippled the American economy.
You can have companies, the big automakers like Ford and GM are rumoured to say, we need to relocate our manufacturing to China, so we can get access to rare earths despite the heavy tariffs that they would then incur by going into the United States. But here is the thing, China’s media has been a lot more circumspect with the details of this so-called trade agreement.
China has said the rumour is that they will give maybe export licenses to rare earths on a six-month trial basis to American companies. So, basically Trump is exaggerating the win in his mind and China is being a lot more honest probably saying well we do not have all the details ironed out, we want to come to an agreement but quite frankly China has the upper hand in the trade war with the United States right now…
The United States needs a deal. Frankly, China controls about 30-35% of global manufacturing. So, America might have the money, they might have the capital, but they need to buy the products from China. At the end of the day, China makes not just rare earths, about 90% of refined rare earths, but they also make most of the ibuprofen, most of the Tylenol.
Most of the antibiotics in the world comes from China. So, at the end of the day, that is real leverage. So, for instance in 2017, 18% of Chinese exports went to the US, that number is down to 14%. China on the other hand has shifted and exports to Asean, has gone up to 16%.
So, basically, it is a game of chicken right now. China’s economy is hurting, do not get me wg. There are about 15 million people who are involved in the export sector. You have seen that the CPI index has dropped about 0.1%. So, we are dealing with the D-word, deflation.
So, the economy in China is not booming, but China is not going to blink. They have the resolve to push hard back against Trump and Scott Bessent and Howard Lutnick because at the end of the day, the Americans need to buy from China. They cannot buy antibiotics from any other country in the world except for a little bit from India.
The Trump administration is pretty clueless on China, and that is only one of many issues when both countries are going to deal with each other, says leading economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know, in an interview with the Australian broadcaster ABC. Both can inflict huge damage on each other, but neither is in a position to win a full-blown trade war, he adds.
For a week, US President Trump has been speculating on how a call with his Chinese counterpart, Xi Jinping, will solve their trade issues. Harry Broadman, a former US trade representative, explains in Politico why Trump is wrong.
Politico:
Trump’s expectation that a call with Xi can reboot U.S.-China trade talks on those issues and render substantive results defies the diplomatic and policymaking protocols of China’s ruling Chinese Communist Party.
“Trump is a deal maker. Xi Jinping is not a deal maker — he’s a Party guy at the top of an administrative superstructure,” said Harry Broadman, a former assistant U.S. trade representative in the George H.W. Bush and Bill Clinton administrations. “I cannot imagine that Xi would get into specifics — at most they might agree on certain principles but that’s not likely to satisfy Trump.”
There’s also a risk that a call between the two leaders could backfire for Trump by undermining longer term trade negotiations with China.
China is having the upper hand in the trade war with Trump and can replace almost every product it purchases from the US with products from other countries, with the exception, perhaps, of semiconductors, says Shaun Rein, a Shanghai-based political analyst and author of The Split: Finding the Opportunities in China’s Economy in the New World Order, at CNBC. China might push back harder than the US or Europe might be thinking, he adds.
Shanghai-based business analyst Shaun Rein, in an extensive interview at Forbes, says that after a very bearish 2024, China’s economy has found its way upwards because of Trump. “People rallied together and said, ‘We’ll deal with lower incomes. We’ll deal with bad sales. We want to make Trump bend’, he tells Forbes.
Forbes:
Long-time China market researcher Shaun Rein chalked up one of his three international business bestsellers in 2018 with “The War for China’s Wallet,” a look at how to sell to the country’s more than one billion consumers. At a time when investors, multinationals and politicians are awaiting a relatively brisk post-pandemic spending recovery in the world’s second-biggest economy, Rein has some good news: it’s coming soon.
“I’ve been in China for 28 years. Last year was probably the most bearish I’ve ever been on the economy,” Rein said in a Zoom interview from Shanghai earlier this month. “Youth unemployment hit 18.8%. Companies weren’t hiring. Fixed asset investment went up only about 0.1 percent. Last July and August were as bad as the height of Covid in terms of confidence and spending. Average retail sales only grew three to four percent year-on-year. People were scared,” even though personal savings totaling $20 trillion, among the world’s largest, he said.
In the last two months, however, Rein’s outlook has reversed. “This is the most bullish I’ve been on China in the last six years,” said Rein, the founder and managing director of Shanghai-headquartered China Market Research Group. Harvard-educated Rein’s other books include “The End of Cheap China” in 2012, “The End of Copycat China” in 2014, and last year’s “The Split: Finding Opportunities in China’s Economy in the New World Older.”
A catalyst for his new, upbeat view is that the hardest punches thrown by the Trump administration in this year’s trade war have yet to prove very damaging to China’s overall economy. “The Chinese feel that China has beat Trump with the tariff and trade war since Liberation Day, and they had the resolve to push back hard. They were not going to bend down because they wanted to push back over a century of humiliation. China bent down during the Qing Dynasty to the Western imperial powers. China wasn’t going to do that again.”
“People rallied together and said, ‘We’ll deal with lower incomes. We’ll deal with bad sales. We want to make Trump bend.’ And Trump did,” Rein said. “By going from 145% to 30% tariffs, Chinese felt they beat Trump. I don’t want say there’s exuberance in the country, but there’s a lot less anxiety than at any time I’ve seen in the last 7-8 years.”
Shaun Rein, an American Harvard graduate and managing director of the China Market Research Group (which is based in China), replied to Bessent’s comments: “China won’t fold to Trump and Bessent’s economic coercion – they hold the cards.”
Rein added, “In the United States, a lot of people think that China is nervous about the trade and it’s going to kneel down and fold and give in to all of Trump’s demands. That’s just not gonna happen.”
Rein added, “Right now, Xi Jinping and the Chinese people are coalescing, they’re not scared about the United States. They’re going to push back really hard.” He added, “They’re gonna push back a lot harder than Americans think.”
China’s consumers, workers, and manufacturers look with relative confidence in their country’s position in the tariff war between the US and the rest of the world. Marketing expert Ashley Dudarenok looks at the social media, memes, comments, and other reactions of the Chinese, she tells at Time.
Time:
The AI-generated videos depicting Americans taking factory jobs, says Ashley Dudarenok, who runs a China and Hong Kong-based consumer research consultancy, relied on subverting a “long-standing stereotype about global labor dynamics.” And quickly, she tells TIME, the caricature was “absolutely everywhere, and it’s still trending.”
“There was the trade war, there was the tariff war, and now there is the meme war,” Dudarenok says.
Even among the Chinese workforce, more and more aspire to work in sectors other than manufacturing. Dudarenok says across Chinese social media she’s seen comments saying, “Chinese people don’t want to do these jobs, why would Americans want to do these jobs?” or “Chinese manufacturers are moving into Vietnam, into Africa—now we have another option: America.”
Still, the tariffs are no joke to those in China whose livelihoods depend on manufacturing goods for export. Some have also taken to social media to respond to the tariffs: by explaining how cheaply they actually manufacture goods and how much of the price consumers paid pre-tariffs came from brand markups…
Some have even appealed to Americans to buy directly from them. “They want to get rid of the middleman,” says Mei. But consumers should beware that claiming to manufacture for big brands while actually producing knock-offs is a common scam, and some scammers could be exploiting consumer panic about potential price hikes. While China produces more than half of the world’s clothing and textiles, Dudarenok says manufacturers that are “trusted partners” with big brands don’t typically sell their partners out so easily. ..
The government’s message is clear, Dudarenok says: “China is prepared to fight for its right to be in the room and to be at the table.”
, explains at CNBC why China can walk away from a trade agreement with the US if they do not like it, although its economy is not very bright at this stage. He does not expect to see any great push to improve consumption or the economy at large, as the leadership is happy with the current modest growth.
