China Fighting Back in Trade War! Meets US Tariffs Head On With Devaluation of Yuan!
China is going to fight till final victory in the trade war. That was stated today in Beijing. After that, Beijing depreciated the yuan against the dollar. The cheap national currency will help Chinese campaigns to withstand the competition of increased tariffs. The new exchange of increased tariffs between China and the USA has already collapsed stock markets. Boeing and Apple stocks plummeted exceptionally low, Uber fell 10% in value. Press-Secretary Dmitry Peskov stressed that the Russian economy is stable enough to endure anyone else's war.
See Alexander Balitsky's report from China.
The renminbi, the official name of the Chinese yuan, hasn't fallen so low since the beginning of the year. This is a consequence of the trade war. The People's Bank of China seems to have made a conscious choice. Dealing for a fall doesn't mean devaluation. But it surely plays into the hands of Chinese exporters. The cheaper the yuan and the more expensive the dollar, the greater the profits for the leading global manufacturer. China has already been accused of manipulating the national currency but now this is just another tool to compensate for the loss of $200 billion.
Geng Shuang, China's Foreign Ministry: "We hope the USA won't misvalue the situation and underestimate China’s determination and will to protect its interests".
The trade war, the term they've tried to avoid using, is a tool for raising patriotic spirit on state television today.
"We're open to negotiations but if the USA attack us, we'll fight back to the bitter end".
China has chosen proportionate methods of struggle. But in the list of more than 5,000 American goods, they included mainly those that can be substituted by non-American ones. They also left room for maneuvers — if it turned that out some products don't have substitutions, then the duty can be lifted. In any case, Trump struck his own manufacturers both exporters — farmers are counting lost profits since half of American soybeans were exported to China.
Dan Keenan, farmer: "We knew our soybeans would be targeted and it would be us who suffer the most".
And importers — American clothing brands had their production capacities mostly in China.
Rick Helfenbein, CEO of American Apparel & Footwear Association: "We're sitting around and feeling like we've bought tickets for the second voyage of the Titanic. The difference is that this time we know exactly where the icebergs are".
The head of the White House doesn't want at least to try to evade the icebergs and blames American business for nearsightedness.
"Make your product at home in the USA and there's no tariff. We're a piggy bank that everyone wants to take advantage of. Enough!"
Trump's argument is that China buys too little and sells too much. But China replies that maybe this is what American consumers are interested in.
Jin Kanjon, Deputy Dean of international studies faculty: "The World Bank has calculated that if all Chinese products were banned on the USA's market, then American consumers would have to buy from other suppliers and pay more".
Neither Beijing nor Washington are ready to yield to one other. Trump said that he was very much looking forward to a frank conversation with Xi Jinping in Japan and immediately promised to increase the pressure for another $325 billion. This is the manner China won't consider contributing to negotiations.
Alexander Balitsky, Mikhail Artyukhin, Beijing VESTI Bureau.