Welcome to the 172nd edition of Trade War.
On a four-day visit to China, U.S. Treasury Secretary Janet Yellen calls decoupling “disastrous” but criticizes Beijing for its treatment of American companies. China imposes an export ban on key inputs used in chip manufacturing, causing global consternation. And just what are gallium and geranium, the two metals now facing restrictions?
A precipitous drop in property sales in June suggests the troubled real estate market is far from stabilizing. And China is entering a “balance sheet recession” warns the economist who coined the term to describe Japan’s malaise in the 1990s.
While overall the country may seem to be turning inward, in one big way it is globalizing: Chinese are leaving and emigrating to countries around the world at record rates. And even as Beijing exhorts its people to have more children, young Chinese are opting out of marriage and not starting families, exacerbating the country’s aging crisis.
Ant Group, the financial-technology company affiliated with Jack Ma, has been hit with a nearly $1 billion fine. And the Chinese Communist Party continues to push private and foreign companies to open party branches.
Plus more including:
“No matter how yellow you dye your hair . . . you’ll never turn into a Westerner,” says top foreign affairs official Wang Yi
China moves to crackdown on “bad faith” IPR practices
And my thoughts on the new PBOC governor
In Beijing, Yellen says decoupling ‘disastrous’
Finishing a four-day visit to Beijing, Treasury Secretary Janet Yellen said bilateral meetings had put the relationship on a “surer footing” and called the possibility of decoupling “disastrous.”
“I believe that my bilateral meetings—which totaled about 10 hours over two days—served as a step forward in our effort to put the U.S.-China relationship on a surer footing,” she said at a press conference at the U.S. embassy in Beijing.
“There is an important distinction between decoupling on one hand and on the other hand diversifying crucial supply chains. We are taking targeted national security actions,” Yellen said.
If China and the U.S. were to decouple, it would be “disastrous for both countries and destabilizing for the world” and also “virtually impossible to undertake.”
“We believe the world is big enough for both of our countries to thrive,” she said. “No one visit can solve our challenges overnight. But I hope the trip will help build a resilient and productive channel of communications.”
But criticizes China’s treatment of US firms…
Earlier in her visit Yellen, however, took China to task for its poor treatment of foreign companies, including American firms.
“During meetings with my counterparts, I am communicating the concerns that I’ve heard from the U.S. business community— including China’s use of non-market tools like expanded subsidies for its state-owned enterprises and domestic firms, as well as barriers to market access for foreign firms,” Yellen said to an event held for members of the American Chamber of Commerce in China which included executives from Bank of America, Boeing, and agricultural trading firm Cargill.
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