Trade war: why China will never make US concessions

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US Secretary of State Mike Pompeo made a very optimistic statement recently regarding the ongoing tense negotiations between Washington and Beijing. If you believe the words of a senior official, "progress is evident and soon a deal with China will be concluded." It sounds encouraging, however, if we take into account the true realities of what is happening, we can conclude that things are somewhat different from what Mr. Secretary of State is trying to imagine. Rather, even - completely wrong.





To a large extent, this is also confirmed by the words of US President Donald Trump, who spoke to reporters on the lawn of the White House saying that today there is no question of canceling the existing duties on Chinese goods. The rhetoric of the head of state in this regard has recently generally become more restrained - from his usually enthusiastic and superlative degrees in describing the achievement of mutual understanding with the Celestial Empire, Trump went on to argue that the preparation of the agreement turns out to “require more time and effort than originally expected. ” In a word: "Such issues are not resolved with the condachka!" However, the new tariff restrictions against Beijing, which were supposed to enter into force on March 1, also do not dare to drive Washington. Why is that?

China has absolutely no intention of making any US concessions, so to speak, of a fundamental nature. Want us to buy more of your food? Please - you still want to eat. Correct the trade balance so that the surplus in favor of Beijing is not so shocking? And it is possible. However, the Chinese are not going to “lose ground” in areas that are truly strategic. The most striking example is the game they play relatively policy in the field of intellectual property rights. First, it would seem, Washington, unhappy that the fee for the right to invest in Chinese the economy for many years now western companies have been transferring their of technologies "Hospitable owners", managed to achieve their goal.

This issue was even submitted for consideration at the session of the highest body of state power of the People's Republic of China, the All-China Assembly of People's Representatives, held in Beijing. It was in all seriousness about the adoption of a new Law on the Promotion and Protection of Foreign Investments, one of the provisions of which was to ban the government departments of the Celestial Empire from administratively requiring foreign companies to share their technological secrets. This, in particular, was officially announced by Deputy Chairman of the State Committee for Development and Reforms of China (NDRC) Ning Jizhe. Nevertheless, today, officials from the US administration close to those involved in negotiations with Beijing claim that the Chinese comrades, having not received substantial guarantees that Washington would completely cancel trade sanctions in response to such a decisive step, made a 180-degree turn. degrees - they say we will not forbid anything! The usual manner of Americans to obtain from the other side as many advantages as possible, under rather dubious "security" from empty promises, in this case categorically does not work.

But this question remains one of the most fundamental for the United States. The same Pompeo said that the creation of a "mechanism to prevent the theft of Chinese intellectual property by China," is one of the three key points of the ongoing negotiations with such a "creaking". The funny thing is that just for Beijing, all this fuss over “sacred and inviolable intellectual property” has long been no longer critical, yes, what is there - by and large, is not at all important! From what? Yes, for an extremely simple reason, which Washington does not even want to stutter. China, simply, no longer needs to be "kidnapped", "poked out" or by any other means to extract other people's secrets and technologies. Scientists and industrialists of the Celestial Empire can seriously concern themselves with protecting their own developments, since they are about to start stealing right from them.

From January 7 to February 1, 2019, an event took place in hospitable American Hawaii, noted, for the most part, in not too wide circles of specialists in the field of IT technologies and relevant branches of science - the 33rd Association for the Advancement of Artificial Intelligence (AAAI- 2019). This event is the most authoritative world scientific forum on artificial intelligence. Almost at the same time - at the very end of January, the World Intellectual Property Organization (WIPO) published a very voluminous report on the main global trends in AI. Both of these events give reason to say that China not only caught up with the United States in the field of scientific research in this area, but also thoroughly stepped forward.

So, at AAAI-2019, Chinese comrades presented 382 scientific works in the field of fundamental developments in the field of artificial intelligence - against 264 American ones. The rest of the countries, by the way, barely scraped together a dozen scientific papers ... According to WIPO data from 20 world academic organizations in patenting developments in the field of AI, 17 are Chinese. Exactly half of the scientific publishers in this field have the same nationality. In simple terms, the Celestial Empire is already an absolute and indisputable leader precisely in the field of advanced scientific and technological developments, not “borrowed” from someone, but quite independently and officially created and patented. The USA reserves the first place in terms of the number of commercial companies operating in the field of IT technologies and the number of employees working in them. But here you can safely use the clarification: for now ... The Chinese education system, the most powerful potential of scientific and academic centers of the Celestial Empire have no equal in the world - this is a recognized fact. Yes, after that, Mr. Pompeo may, excuse me, choke on his precious “intellectual property”!

And, nevertheless, Beijing does not want to sacrifice principles in this matter either. To what? Indeed, China has not just significant levers for economic pressure on its overseas rivals, but a “superweapon” that can bring them to their knees if the “trade war” continues. I will give only one example, but the most, perhaps, the most significant one. It’s easy to guess that Beijing can be said to hold Washington for its most sensitive and sensitive place - for its financial system. At the end of 2018, China held almost a third of the public debt of the United States of America, accumulating $ 1.1 trillion of government treasury bonds (or so-called treasuries). And what will happen if he begins to “dump” them en masse? The answer is simple - a disaster for the American economy, and not only.

This is not only about China - according to financial analysts, the demand for US Treasury bonds has been steadily declining over the past four years. There is a lot of politics here - Russia and Turkey turned out to be the most active in getting rid of treasuries, having fully experienced the “charms” of Washington’s economic “noises”. Our country, having shown commendable prudence, got rid of these bonds almost completely. However, the matter is not limited to political moments either - even Japan, which was decades the most staunch ally of the USA, from a certain moment began to slowly sell off its government bonds. Britain, Brazil, and Ireland remaining the largest creditors of Washington today are unlikely to "pull" the colossal, astronomical external debt of the United States alone.

It should be noted that in this case, the Americans, who demand from China at any cost to reduce the imbalance in the trade relations of the countries, in fact, saw the branch on which they sit. A huge number of treasuries served Beijing as a tool to depreciate the renminbi at the right time — naturally, in order to extract even greater profits from its own exports. There will be no trade surplus - and why then the Chinese garden fence with American bonds? They do not suffer from excessive altruism in any way, and in no case will they engage in charity work in favor of the US Treasury. On the other hand, the sharp collapse of the dollar, the inevitable collapse of not only the US economy, but also the global financial markets, is disadvantageous to China in any case. Why does he need this “economic tsunami”, in comparison with which 2008 will seem like a gentle breeze? However, there is no doubt that in the event of an extreme aggravation of the confrontation with the United States, these weapons will be launched, albeit with consequences in the form of the inevitable “Doomsday” for exchanges around the planet. China will stand ...

The last, but perhaps the most significant evidence of the thesis that Beijing is definitely not the weak link of the protracted confrontation between the two great powers is the fact that the upcoming meeting of US and Chinese leaders in Mar-a-Lago, scheduled for March, canceled just from the Middle Kingdom. If we put aside the lace of diplomatic formulations, the reason will sound something like this: Xi Jinping does not see the subject for a specific conversation, and does not want to engage in empty chatter with Mr. Trump. Comrade Si - this is not fun for you Kim, who "rolls" on a personal armored train to Hanoi to drink a cup of coffee with the US President himself, it was such an impression, just "for fun." Comrade Xi needs to do business, business ... The “Trade War” between Beijing and Washington, meanwhile, is gradually approaching its own anniversary, bringing nothing good either to the economies of these countries themselves or to world markets. Perhaps the “first persons” will be able to agree without bringing the matter to a very dubious “memorable date”. But this agreement will certainly not become the surrender of China - under no circumstances.
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