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A war to do more, not less



Talking P oints:

– The Key Problem of American-Chinese Trade Tensions is fast China moves to a market-oriented economy

– 2006 was a turning point for trade when the US believed China's market liberalization slowed

– measures that China introduced between 2016 and 19659004 and 2017 have the Revived the concerns of the United States and put us in the situation in which we find the two countries today.

The Fundamental Issue Underpinning US-China Trade

Ever since US President Richard Nixon visited China in 1

972, t he US and China had a long History of trade disputes. More recently ince in 2001, when China became a member of the World Trade Organization (WTO) [1965512] the US and its Western allies have pressurized China to reform its trade regime a process known as trade liberalization.

In particular, the US has pushed for liberalization in areas such as intellectual property rights, industrial policy, agriculture practices and legal framework; much of these efforts are still in progress 19659004] The underlying fundamental problem that separates the two countries is the Process and the speed at which China passes from a state-led to a market-oriented economy.

Category

Edition

From when

Industrial Policy

Investment Restrictions

2001

Made in China 2025

2015

Indigenous Innovation

~ 2007 [19659056] Technology Transfer

Mid-2000s

Information and communication technology policy

2014

Subsidies

2001

Overcapacity

(ie steel, aluminum)

Mid-2000s [19659056] Export restrictions [19659063] (ie, rare earths)

~ 2006

Intellectual property rights

Intellectual property rights

(ie, law, enforcement)

2001

Services

Electronic payment services

~ 2010

Financial Services

(ie Banking, Insurance)

2001

Agriculture

Beef, Poultry and Pork

~ 2006

Biotechnology Regulation [1 9659051] 2001

For the US the liberalization process will decide whether it can export anything and everything that it wants to sell to China and in turn buy everything what it wants to buy from the Chinese market. However, progress is slow, and so threaten the US China the introduction of new tariffs .

In this trade relationship, t paroli are used as a penalty to punish the counterpart if either no or slow progress is made the desired direction. The penalties could reduce the volume of trade in the short term and increase costs around . Nevertheless, somewhat paradoxically is the end of US target that threatens a trade war more trade with China, no less – the US just want it on more favorable terms performed .

Increasing trade with the USA is also desired for China [1965-9012]. At the same time, the mitigation of financial risks as well as the development of internal growth momentums was classified by the Government as a top priority . China works on s strengthen regulatory oversight and promotes domestic innovations. These measures serve China's long-term goal s although China's trading partners may not fully welcome it. This adds more nuance to the bilateral relationship – which already has many stress points.

Trade between China and the US Continues to Grow

Trade flows between China and the US reached new all-time highs in 2017, despite growing trade tensions between the two countries. In determining what areas of tariffs could affect any economy, tensions in the trade should continue to worsen and it is important to see where the most significant trade between China and the US takes place.

<img class = "gsstx" itemprop = "image" src = "https://ac-dn.net/b/4kK0bC/A-War-to-Trade-More-Not-Less—Whats- behind-US-China-Tariffs_body_Picture_4.png "alt =" A war to trade more, not less – What's behind US China? Customs [196519140] In 2017, the first three areas of the US [19659004] Exports to China Transport (eg aviation products, motor vehicles), machinery and electrical products (eg semiconductors, navigation measures) and plant products (eg oilseeds, cereals) .The first three areas of the USA imported from China machinery and electrical products, furniture and toys and textiles.

 A war to act more, not less - What is behind the US-China tariffs

A history of On and Ab in US-China Trade

From the center 1990s to 2002, China implemented "dramatic and rapid reforms on [19659004] State "Companies (SEOs)," as stated in the annual report that the US trade presentation was submitted to Congress. This was one of the reasons why the US supported China's accession to the WTO. Between 2001 and 2005, the relationship between the US and China boomed and the US acknowledged that "China has taken significant and often impressive steps to reform its economy" and that "the US has benefited greatly" ,

The year 2006 was a watershed, however, when the US saw China's "market liberalization slowed. [196551212]" About the next seven years, US-China trade volumes continued to "expand rapidly"; At the same time, conflicts between the two parties increased and intensified. In 2013, China announced that it would play a "crucial role" in the free market, a direction the US was "encouraged" to do. But only three years later, the two countries encountered considerable disagreement over whether China has made significant economic reforms and made enough changes in the trade regime.

In 2017, the US claimed that the state of China's state economy was "worse today than it was five years ago"; China took a different view. In addition to many long-running disputes in intellectual property (IP) rights and agriculture, China's Made in China 2025 Plan (2015), National Security Law (2015) and [19659168] Cybersecurity Law (2016) worried about the US that foreign technology is being replaced by Chinese technology. Despite the high-level bilateral meetings in 2017, the two parties have not reached consensus on whether China has sufficiently changed its trade and investment regime. This led to a whole series of detailed questions and led us to the situation in which we are today.

In the next few reports we will examine how today's trading tensions are developing and how they can affect FX

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Whether you are a new or seasoned trader, DailyFX has multiple resources, which can help you: an indicator of surveillance Merchant sentiment ; quarterly trade forecasts ; analytical and educational webinars that take place daily ; Trading Guide to Help You to Improve Trading Performance and even one for those who are New to Currency Trading .

— Written by Renee Mu, currency analyst and Christopher Vecchio, CFA, senior currency strategist


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