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In the Trade War, China Should be Careful about a United West

Well-known Chinese news site Sina recently published an online commentary analyzing the roles played internationally in the upcoming “trade war” that U.S. President Trump started. It seems Mr. Trump’s card of steel and aluminum duty exemptions was designed to force the traditional allies to align with the U.S. position against China. Although the EU governments have not made any announcements, yet some EU media are already setting the stage for a “United West.” For example, Frankfurter Allgemeine Zeitung (FAZ, the German national daily newspaper) came out in favor of standing “shoulder to shoulder with Washington.” At the same time, Finanz und Wirtschaft (the Swiss financial newspaper published in Zurich) also published an article, pointing out that the EU faced the same “admission to market” barriers in China that the United States faced. Handelsblatt (Germany’s largest financial newspaper) published its commentary describing Trump’s trade war as “not intended to fire at Europe,” saying that the EU should find a “common ground” with the U.S. to battle China’s unfair trade tactics. Looks like the EU countries are forming their strategy based on choosing an ally. At this historic moment, shouldn’t China take some action?

Source: Sina, March 26, 2018

China May Start Paying for Oil Imports with Chinese Yuan

Well-known Chinese news site Sohu recently reported that, based on what sources told Reuters, China may have taken the initial steps to use its own currency to pay for imported oil. Some actions may be taken as early as the second half of this year. This is a critical step on the path to RMB internationalization. The Chinese authorities have informally notified multiple financial organizations to get ready for oil transactions to be priced in Chinese yuan. China is now the world’s second largest oil consumer. In 2017, China surpassed the United States to become world’s largest oil importer. China’s demand for oil is now an important factor that determines the global price of oil. Based on the current plan, Russia and Angola could be the first two “trial sources” for China to pay in RMB. The two countries are both key suppliers for China, and both of them want to avoid settling in U.S. dollar as well. If this plan succeeds, the same rules can apply to the transactions for other natural resource imports.

Source: Sohu, March 29, 2018

China’s Largest Battery Manufacturer Took Control of a Canadian Lithium Mine

Well-known Chinese news site Sina recently reported that China’s largest lithium manufacturer, CATL, recently acquired a controlling interest of over 90 percent of Canadian lithium mine owner, North American Lithium. The Quebec government also owns five percent of the shares. CATL is rapidly expanding its capacity to manufacture electric car batteries, aiming to become the largest battery manufacturer in the world. Industrial analysts expressed their belief that CATL’s recent move is to secure the supply of raw resources needed for its products. This deal is still pending approval from the Chinese government and the Quebec government. The Canadian Environmental Assessment Agency is also currently performing its assessment. The mine is capable of producing 23,000 tons of battery-grade lithium carbonate. In terms of global lithium resource control, China is currently ahead of the United States and Europe.

Source: Sina, March 13, 2018


LTN: China’s One Belt One Road Plan Brought Economic Trouble to Eight Countries

Major Taiwanese news network Liberty Times Network (LTN) recently reported on China’s grand One Belt One Road plan, which involves a potential investment total of US$8 trillion and involves 68 countries in Asia, Africa, and Europe. The report showed however, that it actually has brought an economic crisis to eight countries: Djibouti, Kyrgyzstan, Laos, Maldives, Mongolia, Montenegro, Pakistan and Tajikistan. Not long ago, the Center for Global Development (CGD) published its analysis on the impact of One Belt One Road. The analysis indicated that many countries developed significant dependency on China and their debt level increased significantly. For example, the African country Djibouti’s Chinese debts are now as large as 91 percent of its GDP. Another example is Pakistan’s development plan of its Port of Gwadar. Now China has pocketed around 91 percent of the Port’s income with only 9 percent left for Pakistan. The income was obtained significantly based on the deep tax cut that Pakistan offered. Sri Lanka had to rent its port city Hambantota to China for nearly one century due to the fact that the government could not pay back its debt (US$1 billion) to China.

Source: Liberty Times Network, March 6, 2018

China’s Domestically Manufactured Mainline Aircraft C919 Acquired More Orders

China’s financial news network, A Finance, recently reported that China’s state-owned Commercial Aircraft Corporation of China, Ltd. (COMAC) just landed a new contract to sell 30 C919 aircraft. This new deal enabled COMAC’s C919 sales record to reach 815. COMAC is the company formed to realize China’s strategic goal of domestically designing and manufacturing mainline large-capacity commercial passenger aircraft. C919 directly competes with the Boeing 737 and the Airbus A320. COMAC currently has contracts from 28 buyers globally, most of whom are Chinese organizations. The C919 project was part of a national effort to develop domestic high-end manufacturing equipment and products to compete eventually in the global high-end industrial market.

Source: A Finance, February 26, 2018

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