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发帖数: 38600 | 1 There are 6 possible things that China can do at this time, in order of
escalating severity:
China could de-escalate tensions by presenting a list of actions it will
follow to reduce its significant trade deficits in services with the US.
This could affect education service institutions, the local tourist industry
, and entertainment. However, as the CFR's Brad Setser writes, it
increasingly looks like the Administration is putting China in a position
where China cannot make concessions without appearing to cave - which most
think China won't do. Setser, not alone, has trouble seeing a de-escalation
option if Trump goes through with the $200b
China will likely launch an economic subsidy for its economy in the form of
further easing in financial conditions to offset any potential trade-drag.
Some, such as Deutsche Bank have proposed that in order to offset the
negative hit to its consumers, China will loosen policy such as tolerating
the property and land market boom in tier 3 cities and cutting the RRR twice
over the rest of this year to partly offset the potential drags. This would
also involve a modest devaluation of the Yuan.
China could unleash differential treatment of local enterprises: as some
have suggested, Beijing could simply opt not apply its "market access
liberalization" policy recently announced. This could greatly disadvantage
US firms greatly. Beijing could also engage in an aggressive crackdown on US
firms operating in China (Apple), hinder border passage of US products (
automotive), or pursue antitrust and monopoly allegations against US tech
names (Micron).
China could also choose a diplomatic retaliation, and order Kim Jong Un to
scuttle the recent agreement North Korea signed with the US, humiliating
Trump by showing that it was Beijing all along who made the US-N. Korea
summit possible and successful.
China could pick an aggressive route, and instead of a mild depreciation, it
could aggressively pursue a weaker Yuan to boost trade competitiveness:
which, ironically, is the catalyst behind much of the Trump administration's
animosity toward China. To achieve this, China would relaxing some of the
capital control measures that have helped strengthen the renminbi in the
past 2 years. That said, such a move would unleash sizable outflow demand,
while boosting precious metals and cryptos. The US would also brand China a
currency manipulator.
China, finally, could pick the nuclear option, and gradually or suddenly
liquidate its Treasury holdings. This is a long-running worry by markets
given China’s $1.2 trillion in Treasury holdings. In January, Bloomberg
reported this was a possibility which was at the time denied by China State
Administration of Foreign Exchange; however the recent liquidation of half
of Russia's Treasurys was seen by some as a rehearsal for what would happen
if Beijing decides to pursue this approach. |
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