the Future of the trade deal China—the United States was called into question.
Chinese state-owned company had suspended purchases of American food in response to Washington’s decision to deny Hong Kong’s privileged status in bilateral trade. Further development of this conflict may lead to rupture of the first part of the trade deal between the US and China, concluded in January of this year after lengthy and complicated negotiations. A new aggravation of bilateral relations China—USA is on the background of deepening recession in world trade.
Chinese state-owned company received from the PRC authorities instructed to stop purchasing pork and soybeans from the United States under the first phase of the commercial transactions of the two countries, reported yesterday by Reuters and Bloomberg, citing its sources. The reason for this step was the state of Washington, taken in connection with the approval of the Chinese national people’s Congress (the highest legislative body of the PRC) resolution on development of national security law in Hong Kong.
29 may, Donald trump announced that the United States will deprive Hong Kong’s privileged status and economic benefits — as due Beijing actions now it is no longer a separate part of China. “We will begin to consider the refusal of a number of privileges”, — said the American President. We are talking about export control, the use of dual-use technologies, as well as on customs clearance of goods (now Hong Kong is considered by US as separate from mainland China’s customs territory). Donald trump also announced the introduction of sanctions against officials of China and Hong Kong, which, according to Washington, “directly or indirectly involved” to the infringement of the autonomy of the Special administrative region of the PRC.
According to its rules, China must increase the volume of purchases in exchange for Washington’s refusal last round of fee increases and reduce by half (to 7.5%) rate of China’s exports of $112 billion in China in January promised much — no less than $200 billion — to increase imports from the United States in the next two years compared to the level in 2017 (when delivery of goods was $130 billion, services $56 billion).
primarily, this involves the growth of energy imports worth approximately $50 billion over two years, of engineering products — by $80 billion, services of $35 billion of agricultural products by $32 billion, According the USDA, in the first quarter of 2020, China bought US soybeans by $1 billion, pork by $691 million
Note, the immediate effect of the change of status of Hong Kong trade with the USA will not so great and in 2019 the Hong Kong export (in fact re — export from China) in the US has declined by 15% (up to $39 billion), and imports by 8% (��about $27.3 billion). As pointed out in ING Bank, the more sensitive it will limit the transfer of American technology, spreading to Hong Kong “export control” — especially in terms of dual-use technologies.
New contradictions in the bilateral relations of China—the United States emerged amid the deepening recession in world trade.
the correlation between trade volumes and the presence in one country or another, quarantine measures were weak, indicating the globalization of the downturn. In particular, although China’s April exports have already recovered (the growth amounted to 3.5% year-on-year), while imports remained below last year’s figures — minus 14.7%.
Tatiana Edovina
