China: US trade blackmail ‘disappoints’ the world

US President Donald Trump has threatened to slap tariffs on virtually all of China’s exports to the United States. (AFP)
Updated 02 August 2018
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China: US trade blackmail ‘disappoints’ the world

  • Beijing said it would be forced to take countermeasures to defend Chinese interests, free trade and the international order
  • On July 10, Washington unveiled a list of another $200 billion in Chinese goods that would be hit with 10 percent import duties

BEIJING: China warned the US on Thursday that upping the ante in a tit-for-tat trade war will “only serve to disappoint” the world as Washington threatened to raise the tariff rate on the next $200 billion of Chinese imports.
Beijing said it would be forced to take countermeasures to defend Chinese interests, free trade and the international order.
“The US has no regard for the world ... playing both soft and hard ball with China will not have any effect, and only serve to disappoint the countries and territories opposed to a trade war,” China’s Ministry of Commerce said in a statement, adding that it still hopes to turn the situation around.
Foreign ministry spokesman Geng Shuang called Washington’s actions “blackmail” and urged the US “to return to rationality and not act on impulse. It will only hurt themselves.”
President Donald Trump asked the US Trade Representative (USTR) to consider increasing the proposed tariffs to 25 percent from the planned 10 percent, USTR Robert Lighthizer said on Wednesday.
“We have been very clear about the specific changes China should undertake. Regrettably, instead of changing its harmful behavior, China has illegally retaliated against US workers, farmers, ranchers and businesses,” Lighthizer said in a statement.
Officials, however, downplayed suggestions the move was intended to compensate for the recent decline in the value of the Chinese currency, which has threatened to take much of the sting out of Trump’s tariffs by making imports cheaper.
The US dollar has been strengthening since April as the central bank has been raising lending rates, which draws investors looking for higher returns.
“It’s important that countries refrain from devaluing currencies for competitive purposes,” a senior administration official told reporters. “But I wouldn’t draw the conclusion that the announcement we’re making today is directly linked to any one practice.”
Washington and Beijing are locked in battle over American accusations that China’s export economy benefits from unfair policies and subsidies, as well as theft of American technological know-how.
Trump has threatened to slap tariffs on virtually all of China’s exports to the US.
Officials said they remained in regular contact with their Chinese counterparts but could announce no new meeting.
The US already imposed 25 percent tariffs on $34 billion in Chinese goods, with another $16 billion to be targeted in coming weeks.
On July 10, Washington unveiled a list of another $200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10 percent import duties.
Increasing the rates to 25 percent could make them significantly more painful.
The comment period on the proposed penalties, which includes public hearings where business can ask for exemptions, due to take place later this month, would be extended into September, the officials said.
Much of American industry and many members of Trump’s own Republican Party have expressed outrage but have so far been unable to thwart Trump’s trade policies.
The US Senate last week passed legislation which if enacted would lower trade barriers on hundreds of Chinese imports.
Jake Colvin, vice president of the National Foreign Trade Council, said the Trump administration could be boxing itself into a corner.
“It’s hard to see how this action lends itself toward a resolution to what is increasingly a trade crisis,” he said.
Trump and senior administration officials believe the volume of US imports and vigorous health of the American economy give Washington an advantage in the current confrontation.
But Fred Bergsten, founding director of the Peterson Institute for International Economics, told CNBC that China would be able to absorb blows more easily than Washington.
“They can expand their stimulus, fiscal spending, bank lending,” he said.
“They can compensate much better than we can. They come from a much higher base.”
And Bergsten warned that the US economy is likely to slow and a trade war only makes that expected decline worse.


SoftBank to launch Vision Fund 2 mega-venture

Updated 6 min 27 sec ago
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SoftBank to launch Vision Fund 2 mega-venture

  • Vision Fund 2 will aim to pull in existing investors such as the Public Investment Fund in Saudi Arabia and Mubadala in the UAE
  • Vision Fund 2 is expected to at least equal the original fund’s $97 billion fund, and could reach $150 billion

LONDON: The global mega-investor SoftBank Vision Fund is preparing to launch another giant investment venture.
Vision Fund 2 will aim to pull in existing investors such as the Public Investment Fund in Saudi Arabia and Mubadala in the UAE, the biggest investors in the original fund along with SoftBank, the Japanese group run by Masayoshi Son.
Sources told Arab News that Vision Fund 2 is expected to at least equal the original fund’s $97 billion fund, and could reach $150 billion — which would make it the largest private investment fund in history.
A team from SoftBank Investment Advisers led by its chief executive Rajeev Misra and Masayoshi Son have been in preliminary discussions with potential investors for several months.
They have been talking to sovereign wealth funds in the Middle East and elsewhere, as well as big global corporates, some of which were also investors in the first fund.

*** Read our full interview with CEO Rajeev Misra here: SoftBank Vision Fund stands shoulder to shoulder with Saudi Arabia — CEO Rajeev Misra ***
Investment is also expected from global banks, insurance companies and pension funds, and SoftBank is expected to put up about $40 billion.
The first phase of the launch is due to end “in the next few months,” with a final close around 12 months later.
The original fund plans to return profits to existing investors over the next few months, including big partners such as PIF, Mubadala and SoftBank. If they see healthy returns they may be more likely to invest heavily in the new fund.
The interests of Saudi Arabia and the Vision Fund align as the Kingdom diversifies away from reliance on oil, Misra told Arab News. “Our commitment is to support the creation of tens of thousands of jobs in Saudi Arabia, high-tech jobs not blue collar, over the next few years,” he said.