The starting point of peace is the escalation of conflicts. Who can laugh at the end of the Sino-US trade war?

The trade war is going to this stage, and perhaps recognizing reality is the best way out.

In the past 100 years, the United States has fought a lot of trade wars, some have directly collapsed the economy of other countries, and some have taken up their own lives.

However, the true color that the United States likes to pick things has not changed. Instead, it has become more and more fierce. At the beginning of 2018, an epic war broke into the doorstep of the Chinese state.

Fortunately, after more than a month, the situation seems to be slow. The United States sent a huge economic team to China for negotiations. It seems that it is going to make a big deal at the negotiating table.

Anyway, since there is talk, it is of course a good thing, and it proves that it has not yet reached the point of full-scale war. Everyone has room for manoeuvre.

However, when everyone was relieved, the Sino-US negotiations were not smooth, and no substantive results were achieved. Only two days later, the US delegation went home, and it really ended before it started.

At the negotiating table where you can't see the smoke, how do China and the United States confront each other, and how will the follow-up situation develop?

1

Gorgeous negotiating lineup

On April 30th, the White House announced the list of members of the negotiating delegation. The two major information revealed were quite interesting.

First, the luxury of the lineup shows that the United States attaches importance to this negotiation.

There are a total of seven people in this trip, including US Treasury Secretary Mnuchin, US Ambassador to China Branstad, Secretary of Commerce Ross, Trade Representative Wright Heze, Trump Economic Advisor Larry Kudlow, Trade consultant Navarro and international economic affairs adviser Eisenstadt.

It can be said that the economic team of the Trump administration has already been launched.

Second, although the team is gorgeous, it is very strange that there is no consistent goal in the interior, and it can even be said that there is some separation.

These 7 people can be divided into two factions. We can simply use hawks and doves to call them.

For China, US Treasury Secretary Mnuchin is a relatively modest dove. He once worked for the well-known financial institutions Goldman Sachs and Soros Fund. He is more rational in the trade war, and his position is also the highest. , equivalent to the Chinese Deputy Prime Minister.

In other words, he is the most talkative and most likely to make concessions.

In addition, the Ambassador to China, the Trump Economic Advisor, and the Minister of Commerce are also part of the dove camp and the main talker.

The bad news is that there are also extreme hawks headed by Wright Heze, Navarro and others in the delegation. Their attitude towards China is two words, tough.

Among them, Wright Heze has participated in the negotiation of the "Plaza Agreement" of the United States and Japan, and is also responsible for the negotiation of intellectual property rights. The idea of ​​this trade war of 50 billion tariffs was first proposed by him.

Indirectly smashing Japan's "Plaza Agreement" and launching a trade war, this Wright Heze is not simple.

The trade singer with Wright Hitzer is a trade consultant. The author of "Fatal China" Navarro, although it seems that his title is not loud, but in fact he is the core figure of Trump's team philosophy and policy, which is considered to be behind the scenes. Look at his title and know what his attitude towards China is.

An anecdote about foreign media reports is that at a closed-door meeting in China in 2017, "We hate to contact Navarro."

It can be seen that this person is really a very difficult person, and the two hawks are also the main war factions.

So is the US side of this negotiation dominated by hawks or doves? Let's take a look at it and understand the content of the negotiations.

2 What is the negotiation in the end?

Recalling several rounds of trade wars this year, we can find that the first steel and aluminum are temptations. The most important battle is on April 3, the United States announced the investigation of the 301 investigation of China, in this round. Among them, the amount involved is as high as 50 billion US dollars.

Subsequently, on April 5, Trump issued a new statement requesting the Office of the US Trade Representative to study whether to impose additional tariffs on China's 100 billion export commodities.

The "301 Survey" is aimed at the issue of intellectual property rights. What are the intellectual property rights to talk about? In fact, the United States is not a drinker.

I want to talk about the issue of market opening.

Because according to the convention, many industries in which American companies enter the Chinese market must cooperate with Chinese companies, and in some cases, they will be forced to transfer technology.

This makes the United States very uncomfortable, because once technology is transferred, plus other restrictions, there is no core advantage in American competition. Therefore,

On the surface, it is a technical problem. In fact, it is a market opening problem. As long as the Sino-foreign joint venture entry mode is resolved, the United States can firmly hold the patent in its hands and open the market in China.

Of course, market opening is only one aspect. The most important thing is that the rise of China has caused American jealousy. Therefore, the United States wants to completely reshuffle every item such as trade deficit and tariff reduction.

Judging from the situation that has been disclosed so far, there are roughly the following highlights on the negotiating list:

The trade surplus was reduced by $100 billion in the 12 months beginning in June, and another $100 billion in the next 12 months.

Stop all subsidies for advanced manufacturing in the China Manufacturing 2025 program.

Strengthen intellectual property protection.

The current average 10% tariff is reduced to the same level as the US, with an average tariff of 3.5% for all “non-critical sectors”.

At the same time, the United States also stipulates that the two sides should meet quarterly to review progress. Therefore, it can be said that the US inside seems to be split. In fact, the list of ambitious ones reveals that this is probably an alliance under the city.

So will China sign?

3

What will happen?

Although from the perspective of the trade war, China’s surplus will suffer, China will fall in the negotiations.

However, since there is talk, it is proved that China has its own cards in hand, and it is not bad.

Especially in the moment, Trump's life in the United States is not good, facing the mid-term elections, and there are not many people in his party to support him in the trade war.

Therefore, in the short term, even if the United States asks for the price, it will eventually pay back.

From the group photo taken from the Internet, the negotiators sent by the Chinese from the middle of Liu He are: Finance Minister Liu Kun, Commerce Minister Zhong Shan, Central Bank Governor Yi Gang, Deputy Director of the Development and Reform Commission Ning Jizhen, Ministry of Foreign Affairs Vice Minister Zheng Zeguang, Vice Minister of Finance Zhu Guangyao, and Vice Minister of Commerce Wang Shouwen.

In contrast to the United States, our representatives are also not showing weakness. The situation of "talking and talking" is likely to continue for some time.

In other words, the negotiations between the two sides are unlikely to have any substantive results, and in fact the same.

At present, this negotiation is a test of the mutual temptation between China and the United States to see where the other side's bottom line is.

Of course, there may be some transitional options to end the negotiations, such as reducing the trade deficit of the two countries by 100 billion U.S. dollars within a certain period of time, and then the financial market will have more open measures in the next three to five years.

In fact, the trade war is going to this stage. Perhaps it is the best way to recognize reality. The ZTE chip incident that has been raging in the past has told us that some major core technologies must rely on their own to overcome difficulties. Abandon fantasy.

Therefore, it is still the same sentence, high wall, wide accumulation beam, slow to call the king, everyone is ready to deal with the next trade war.

4

postscript

Recently, I have seen some comments on the trade war on the Internet, which makes people feel complicated.

The most difficult thing to understand is this: Chinese people are not afraid to fight trade, the Chinese will not lose, because the Chinese can endure hardships, won in the 1950s, who is afraid of who?

This kind of thing sounds like a lot of blood, but I want to ask those who say these words, what action do you use to support the country to fight this battle, and unemployed back to the 50s to go to the bark?

Take a step back and say, even if you really want to go back to the bark, how do you judge win and lose?

I think that the easiest way to judge whether to win or lose is that the ordinary people 603,883, if the stock is too good, it will win, if it is too bad, it will lose.

The problem is coming. You are all planning to suffer. They are going to go back to the bark in the 1950s. Then, do you say that China won or lost?

Therefore, look at the trade war should not be understood with adrenaline, this is not the Olympic Games, there is no simple win or lose.

It can even be said that the real win is likely to appear to be lost in the trade war.

This is true for China and the same for the United States.

- END -

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This article was first published on the WeChat public account: rookie wealth management. The content of the article belongs to the author's personal opinion and does not represent the position of Hexun.com. Investors should act accordingly, at their own risk.

(Editor: Liu Wei HF113)