World economies will probably learn more lessons than would necessary thought from the trade war between United States of America and China. Donald Trump has purposely impose higher tarrif on China import into US meant to discourage Americans from trading with the Asian giant. What is China doing in response? they have decided to play it cool. They soon have realized that eager response seems to present them as vulnerable and therefore decided to slow down. They did not only slow down, they also have started to focus on other markets to expand it. They seems to be coping well, but how? The simply “hold their side”
As the Southern China Morning Post put it …… [“Know your enemy and know yourself,” wrote Sun Tzu in The Art of War, “and you won’t lose a single battle out of a hundred.” Over the years, Chinese leaders have heeded this advice, going to great lengths to understand the internal political dynamics of the US. They know that Trump is tapping into deep-seated domestic fears of China, and that this must be met with strategic realignment, rather than mere tactical management.]
The Chinese economic managers seems to understand that the protracted trade war launched by Donald Trump is more than just to get them into signing a trade deal but to undercut the economy of China, they have sprung into activating a number compensational policies such as to activate fiscal and monetary stimulus, encourage more lending and strengthen the financial system. They also understand that they need to renew old and strengthen weak economic ties with other countries.
China have got the impetus to strategize in the wake of the trade onslaught having developed what they know other nations may not easily push aside.
They leveraged their number and developed technology. China became a producing ground for a number of companies being a major source of parts for the manufacture of wide range of products, this is coupled with being a source of cheap labour. Therefore, even with the 23rd of August call by Donald Trump on US companies to relocate from China, a lot of them may not be able to relocate completely. President Trump equally said last week he would raise existing duties on $250 billion in Chinese products from 25% to 30% on Oct. 1. Additionally, tariffs on another $112 billion of Chinese goods, which took effect on Sunday, are now 15% instead of 10%.
Even in this face companies like Boeing – the Seattle-based aircraft maker doesn’t seem perturbed or poised to abandon the Chinese market any time soon after opening a plant for 737 Max jets late last year.
Another example is Apple whose major products are built in China with Flexcom producing the largest share of the company’s iPhones in 29 factories in the central province of Zhengzhou.
China therefore believe that US have got more to lose in the trade war. Posted by Aljazeera, it reads – “Tariffs could not impede China’s development, said the official People’s Daily newspaper of the ruling Communist Party.
“China’s booming economy has made China a fertile ground for investment that foreign companies cannot ignore,” it said, in a commentary under the name “Zhong Sheng”, or “Voice of China”, which is often used to state its view on foreign policy issues.”
Steve Lamar, executive vice president of the American Apparel & Footwear Association, said on Sunday the new tariffs were “just in time for our most important selling season of the year. They claim that they are hurting China but, in reality, they are hurting us. Prices will go up, sales will go down, jobs will be lost.”
He said the US “can make progress with China when we engage with them in calm, productive talks, not when we make it more expensive for Americans to get dressed every day.”
The most intriguing in the China handling of this trade war is the confidence in themselves; what they have and what they do. They are
It is high time that developing nations especially those of African learned fast to look inward first and develop what they have and believe in what they do. In the first place, China part to economic develop largely followed internal consistency in policy adherence before this loud trend among African countries of depending on foreign nations to develop the continent.