Many of the proposals or suggestions on how China might respond to U.S. tariffs have the air of “Surrender or I will shoot myself in the foot.” They may not only hurt China, but damage the country’s campaign to establish itself as a financial power and hinder the use of the yuan as a reserve currency.
It’s possible China will use talk of such steps to make the Trump administration more flexible, but very unlikely Beijing can follow through.
The proposals that have been put forward include:
- Depreciate the yuan.
- Sell U.S. Treasuries.
- Sell U.S. equities.
- Place tariffs on U.S. oil exports along with soybeans.
- Hinder exports of U.S. services.
- Offset U.S. tariffs with subsidies to Chinese exporters.
- Emerging Market Monitor: Hit by the Trump Trade (Pictet Asset Management)
- Investors Could Short Hong Kong to Hedge Long Shanghai Positions (BOCOM International)
- The Future of Yuan (Express Tribune)
- Is Your Emerging Market Strategy Overexposed to These 3 Factors? (KraneShares)
- Why ‘Made in China 2025’ Triggered the Wrath of President Trump (SCMP)
- GF Securities (HKG: 1776 / SHE: 000776 / FRA: 9GF): A Value Stock After Recent Scandals & Crackdowns?
- Alibaba Squeezed by Crackdown as JD.com and Pinduoduo Pounce (Nikkei Asia)
- China Cuts Taxes, Simplifies Code to Kick Start a Stalling Economy, Stem Capital Flight to America (SCMP)
- China Scrambles to Stem Manufacturing Exodus as 50 Companies Leave (Nikkei Asian Review)
- The Spoils of Trade War: Asia’s Winners and Losers in US-China Clash (SCMP)
- China Loses #2 Creditor Rank to Germany (Bloomberg)
- Billion-dollar Tech Startups Hold Promise for China’s Economy (Nikkei Asian Review)
- Lazard Emerging Markets Fund Manager: Full-blown Financial Crisis in China is Unlikely (FE Trustnet)
- Why Alibaba’s Jack Ma Can’t Seem to Win Over the U.S. (WSJ)
- Some of China’s Richest and Most Powerful Men Have Mysteriously Vanished (LA Times)