Thursday, May 28, 2020

Trump's China Trade War Could Lead to Xi's Destruction

Many observers dismiss the China policies of President Donald Trump as mere protectionism or worse, but in fact the White House has put Chinese dictator Xi Jinping into an increasingly difficult bind.

On Wednesday, Secretary of State Mike Pompeo announced that the Trump Administration no longer considered Hong Kong to have significant autonomy from mainland China, suggesting that it may rescind special trade status with Hong Kong as a result.

The trade war with China is heating up, but a conflict was inevitable and particularly when it comes to technology.

The rising power of state companies in China parallels the accumulation of power in the hands of Xi Jinping, who is increasingly seen as a threat to western-oriented business leaders.

China has dropped from 21 percent of U.S. trade in 2018 to just 18 percent last year.

Many observers accept the official communist party line that the impact of the Covid-19 pandemic made it almost impossible to fix an expansion rate this year, but in fact the lasting effects of the 2008 financial crisis and the aggressive policies of President Trump have rocked China back on its heels.

The arrival of President Trump on the scene further weakened China's already unstable mercantilist economic model, where non-existent internal demand was supposed to make up for falling global trade flows.

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