Below are the papers published on the 7th page of yesterday's Sankei Newspaper by Hideo Tamura, one of the few economic critics who did not write echo Ministry of Finance's words.
I am emphasizing the sentence except for the headline.
Whereabouts of the US-China trade war
Trump bullet shoots 'Dinosaur' China
It is solved as the first film of the American movie ‘Jurassic Park’ over the ‘US-China trade war.’
The USA with colossal wealth and technology has been regenerated the dinosaur 'Chinese Empire' disappeared long ago, but it starts acting violently if making propagate, it is the hardening measure of Trump regime turning into China containment.
Now, the latest work of the series under screening seems to be a story trying to save dinosaurs from the extinction crisis again, but what will happen to the drama of the United States and China below?
Xi Jinping, who became China's highest authorities in autumn 2012, had raised the ‘revival of the great Chinese nation.’
In 2025, he presented full domestic production of hi-tech, and in 2035 he is setting the goal to be the best in the world by overtaking the United States by gross domestic product (GDP).
Occupying reefs in the South China Sea also in military terms and reclaim, it is building an army base.
Contemporary Silk Road economic zone concept 'One Belt, One Road Initiative' encompassing the Eurasian Continent and its surroundings he makes a bold statement,
It is an imperialistic route that provides high-interest loans, constructs infrastructure such as harbors throughout Asia, 'requisition' when other countries cannot pay.
It is the United States that has supported China's expansion.
The Clinton administration in the 1990s made it a member of the World Trade Organization (WTO) to incorporate China into the global economy and allowed expanding exports.
Since then, the successive administration followed this line, and after the Lehman shock occurred in September 2008, it has allowed the acceleration of China's trade surplus expansion.
As a result, let's see the graph.
The People's Bank of China, the Chinese issue bank, buys dollars by the standard exchange rate decided by itself, issues RMB funds, and pours into state-owned commercial banks, state-owned enterprises, and local governments.
Domestic investment such as production facilities and real estate development is actively carried out, realizing high economic growth.
The most significant dollar source is the US trade deficit with China.
It is evident in the graph that the cumulative amount will push up the People's Bank assets and link with the expansion of GDP.
This currency / financial system is different from the Western capitalist country.
In the case of the BOJ, etc., funds are supplied from financial markets according to the purchase of securities such as government bonds.
There are a few foreign currency assets.
Traditionally Chinese people who do not trust out of paper currency prefer gold or dollars.
It is because credit is lost if foreign currency assets occupy 2/3 of the total assets of the People's Bank if you do not show off that the yuan has a backing of the dollar.
Trump bullets on sanctions against China are bombarded there. The first volume on the 6th of this month is 34 billion dollars, but not only will it add $ 16 billion soon.
President Trump said that he is not only preparing 200 billion-dollar bullets but also adds another 300 billion dollars.
The sanctioned imports to China amount to 550 billion dollars, which exceeds the actual import value of over $ 520 billion.
Mr. Trump intends to place high tariffs on all imports to China.
When becoming, the impact on the monetary economy in China is immeasurable.
China's international balance of payments (current account surplus) will remain at $ 120 billion.
If the surplus to the United States drastically decreases, China's external balance will not only fall to the deficit.
It hinders the quantitative expansion of finance, it has no choice but to tighten up, making it impossible to achieve high growth like the conventional one.
The real estate market collapses and financial institutions have substantial bad loans.
To maintain domestic finance, you must rely on borrowing from overseas, not just to promote 'One Belt, One Road Initiative.' Acquisition of overseas high-tech enterprises and the budget for military expansion also take cold water.
The Chinese economy is already slowing.
Restorative measures are propping up export by the devaluation of the renminbi and monetary easing by increasing funds not backed by the dollar, either damage the domestic credit of the renminbi.
When the authorities devalued the renminbi in the summer of 2015, the capital flight of 1 trillion dollars occurred on an annual basis at one time, and foreign exchange reserves fell sharply.
Ever since the Xi Jinping regime has strengthened capital regulation, it is foreigners such as the Japanese are forbidden to bring foreign currency from China, nevertheless, the capital flight continues on the scale of 200 to 300 billion dollars annually.
Trump's bullet is misfortunes never come singly.
Recently, information showing rising criticism within the party against Mr. Xi Jinping, who came under the dictatorship authority from Beijing flies.
It is an excellent possibility from the viewpoint of the financial, economic system, which is shaken by the ‘US-China trade war.’
Return to the beginning story.
Would Mr. Trump relax sanction for the rescue of dinosaur China like the latest work of ‘Jurassic Park’ series?
Or will Xi Jinping raise the white flag?
In my opinion, I assume that neither line is impossible.
Mr. Trump does not give up until it stops the expansion of China, while Mr. Xi Jinping is bullish and inconsistent, the position of domestic politics becomes dangerous.
