SMM News: China has been restrained in its fight against Trump, but it must not be mistaken for weakness. Beijing has so far shown surprising restraint in its dispute with Washington. Even if Trump raises tariffs further, China will still send a high-level delegation to Washington to negotiate as planned. Now the United States has blacklisted Huawei.
But Beijing's current restraint should not be interpreted as a sign of weakness or weakness. Every provocation in Washington makes the voices of China's hardliners louder. Some Chinese scholars have expressed the hope that the Sino-US trade talks will break down, the United States will be "finished" by then, and China will be able to drive out all US enterprises.
The hardliners' comments imply many of China's trump cards. With its huge market, China has a significant influence on American companies that are so dependent on China. Although the era of double-digit growth is over, China remains an indispensable engine of the global economy.
Many companies also rely on Chinese raw materials. Rare earths are needed for electric cars, televisions, smartphones, laptops and tablets. In this area, China is also in a strong negotiating position. The United States can mine rare earths on its own, but it will take at least five years to meet the demand for chips. China also has ammunition in terms of fiscal policy. During the financial crisis, Beijing stepped in to buy Treasuries and made a significant contribution to stopping the global economic downturn. If US Treasuries are sold off by China, it will have fatal consequences.
Boycotts of American goods are becoming louder and louder on Chinese social networks, and even state media have become more assertive. In China, it is believed that this is a dispute that goes beyond the trade deficit and punitive tariffs. The two most powerful countries in the world are fighting over the dominance of science and technology. China is likely to raise the stakes again.