Said El Mansour Cherkaoui Ph.D. – Said Cherkaoui Ph.D.
TRI CK USA – Email: saidcherkaoui@triconsultingkyoto.com
8 27 24 – Oakland – Bay Area of San Francisco – California
Trade-wise, The four years witnessed escalating trade tensions culminating in a trade war and sanctions on Chinese technology companies. Since Biden’s election, political and business stakeholders have been paying close attention to the direction of the new White House administration’s policy toward China.
China Puzzled by U.S. Politics System
China Leaders cannot apprehend the Indirect Debate between Democrats and Republicans and how American People are Navigating between the Waves and Stormy Weather that the Media Stimulates According to their Perception of the Polls.
The Democratic Party gathered from August 19th to 22nd to celebrate the nomination of Kamala Harris as its presidential candidate and her selection of Tim Walz as her running-mate.
Chinese officials and analysts are struggling. A woman who has never visited China and who has only briefly met its leader, Xi Jinping, has suddenly emerged as a serious contender in the race for the White House.
For China’s rulers, the ascent of the Harris-Walz ticket creates difficulties in dealing with:
It has triggered a scramble to assess how a Harris administration might approach China relations. So, Chinese officials and analysts are struggling. A woman who has never visited China and who has only briefly met its leader, Xi Jinping, has suddenly emerged as a serious contender in the race for the White House.
Source: Multiple sources used.
In recent years, China has publicly criticized the U.S.-led, dollar-based international economic order, calling it to replace the dollar as the premier currency for settlements, invoices, and foreign exchange reserves. China has even promoted a new “multipolar” world order split between itself and the U.S.
Since 2008, the U.S. has talked about decoupling from China. Arguments cite the U.S.’s trade deficit with China and China’s intellectual property theft, currency manipulation, human rights abuses, maritime law violations in the South China Sea, and more.
Financially, however, neither country has seriously moved to decouple.
In possession of $1.05 trillion of low-return U.S. Treasury securities, China’s central bank has tried to diversify its portfolio but must continue buying these securities to create demand for the dollar, which boosts its value relative to the renminbi, making Chinese exports more competitive and preserving the value of its central bank’s dollar-denominated holdings.
Nor has the U.S. begun to decouple financially from China, whose purchases of Treasury securities paper over the U.S. trade deficit.
But whether the U.S. and China are decoupling in trade is more complicated.
The U.S. and China are economically interdependent. The U.S. is China’s largest export market, and China is the U.S.’s largest import market. China relies on the U.S. for roughly $580 billion of exports per year, total foreign direct investments of $124 billion, joint ventures in high-growth industries, and more. The U.S. relies on China for economic growth in investments, people flow, idea flows, and trade in key industries. Estimates suggest that decoupling would cost the American aviation industry up to $875 billion by 2038; the semiconductor industry up to $159 billion and 100,000 jobs; the medical services industry more than $479 billion over the next decade; and more.
However, China is transitioning to a value-added, high-growth, high-tech economic model to replace its cheap manufactured goods export-led model, which is suffering from increasing labor prices. China wants to establish its companies as leaders in sectors like 5G, artificial intelligence, semiconductors, and more. They desire the rents of technological leaders and control over strategic sectors that shape the on-ramping and growth of technology.
In response, the U.S. is attempting to stymie the development of Chinese technology, in part by levying export controls against U.S. manufacturers of technologies such as semiconductors and import controls against the purchase of Chinese technology like Huawei smartphones.
