An interesting article in the South China Morning Post outlines how Chinese companies producing everything from canned mandarin oranges, to mid and high-tier furniture, cannot sustain a business model without access to the U.S. market.
Their problem?…
In essence, when they established their decades-old business model the overwhelming majority of their manufacturing was/is contingent on U.S. buyers.
Right now those Chinese companies are praying the CCP central government keeps devaluing their currency, because U.S. purchasers, including wholesalers and intermediaries, have told those manufacturers they will not pay the import duties.
Apparently, U.S. corporate buyers are leveraging the pressure applied by President Trump – a remarkable dynamic.

Perhaps President Trump has to play the public pretend game to China’s panda mask presentations, but we do not.

The corporate U.S. media are pushing a hard narrative today surrounding claims by Chinese Vice-Premier Liu He and wanting to create “calm” to work in earnest toward a U.S-China trade deal.  However, those who follow the dynamic closely will remember Liu He’s role was changed back in July.  Today’s Panda announcement is pure cunning.
Everything China is doing is intended to make it harder for President Trump to be aggressive in the confrontation:

BEIJING (Reuters) – Chinese Vice Premier Liu He said on Monday that China is willing to resolve its trade dispute with the United States through calm negotiations and resolutely opposes the escalation of the conflict, a state-backed newspaper reported.
Liu, China’s top trade negotiator, was speaking at a tech conference in Chongqing in southwest China, the Chongqing Morning Post reported.

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An announcement from China on Saturday, pledging a full economic war against the United States, will likely not come as a surprise for most CTH readers.  However, it does serve as emphasis for our 2017 statement: “prepare your affairs accordingly“…

When we followed up a few months later with the warning:

“There is no upper limit to the level of economic pain Team U.S.A. (America First) is willing to inflict upon China. There is no ending perimeter of action too far for President Trump to travel. Trump will battle his adversary far beyond traditional horizons and will follow them in retreat if that’s what it takes to ensure the safety of the our economic nation.”

Those words were not written lightly.  We accept Trump’s history; we accept three decades of his expressed intent on these issues; and we also accept the historic and cultural position of China which takes us into this conflict.   From Beijing today:

China on Saturday said it would continue fighting the trade war with the US “until the end” after the two sides slapped further tariffs on each other’s goods.

The commerce ministry issued a statement calling on Washington not to “misjudge the situation and underestimate the determination of Chinese people” after US President Donald Trump announced new tariffs on Chinese imports. “The US should immediately stop its wrong action, or it will have to bear all consequences,” the statement said.

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As President Trump departs the White House en route to the G7 meeting in France, White House Manufacturing and Trade Policy Advisor Peter Navarro appears on Fox Business for an interview to discuss the latest round of enhanced tariffs on China.

(White House) For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight.

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Within the dynamic of the U.S -vs- China trade confrontation, CTH has long noted the Wall Street (globalist) multinationals would always go bananas.  There are trillions at stake and President Trump is confronting three decades of financial influence from Wall Street’s multinational corporate lobbyists.
To the angst of Wall Street, POTUS Trump tweets the dynamic.
President Trump will not back down from his position; the U.S. holds all of the leverage and the issue must be addressed.  President Trump has waited three decades for this moment.  Main Street U.S.A has waited for this moment.  This President and his team are entirely prepared for this battle…. Now we fight!

We are finally confronting the geopolitical Red Dragon, China!
President Trump has been brutally consistent for more than three decades on his intent and purpose with the Chinese.  President Trump is the first U.S. President to understand how the red dragon hides nefarious motives behind the panda mask.
Additionally, while carrying out the objectives of the confrontation, Secretary Mnuchin, Secretary Ross, Ambassador Lighthizer and adviser Peter Navarro are well aware of Beijing’s duplicitous panda mask; POTUS Trump will never let them forget about it.
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National Economic Council Chairman Larry Kudlow appeared on Fox Business today to discuss the current state of the economy.  Mr. Kudlow was questioned about several media reports surrounding discussions of new tax cuts, tax rate modifications and tax policy.
Additionally, Kudkow updates the latest position on the U.S-China trade discussion.

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During an oval office press conference today, President Trump took several questions about China and the U.S. trade confrontation.  After receiving the third question, on the same subject, President Trump paused and then went deep into the heart of the issue.
The question was: ” Mr. President, you keep insisting that your trade war with China — the trade war with China is not affecting the U.S. economy. But a lot of economists disagree with that. And they worry that if China goes into a recession, they’ll pull us down with it.”
Here is President Trump’s response:

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[Transcript] … PRESIDENT TRUMP: Well — well, okay. Let me — let me tell you something. Number one, we’re doing very well as an economy. But somebody had to take China on. You know, I read and I see so much and I read so much, and I’ll see these economists saying, “Oh, give up. Give up on China. Give up.”
China has been ripping this country off for 25 years — for longer than that. And it’s about time, whether it’s good for our country or bad for our country short term. Long term, it’s imperative that somebody does this because our country cannot continue to pay China $500 billion a year because stupid people are running it.
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Secretary of State Mike Pompeo sits down for a wide-ranging interview with Martha MacCallum to discuss ongoing multi-layered issues between the U.S. and China.

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Hong Kong movement spokesperson Sunny Cheung explains what the protests are about, and what the movement hopes to achieve.   Mr. Cheung explains the protesters do not believe in the communist idea, and/or the larger communist ideology; hence their efforts to reach out to the U.S. for support.
More protests and rallies are scheduled for this weekend.

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An interesting article in the South China Morning Post (SCMP) highlights how China is shifting their procurement priority from minerals used in manufacturing (cobalt, copper) to the acquisition of food and agriculture products.
The impact is being felt throughout Africa, where mining companies are shutting down operations because Chinese demand no longer exists.
Articles like this highlight the ancillary impacts of a weakened Chinese economy.
Despite the proclamations by Beijing about their ability to withstand the withdrawal of the U.S. as a primary customer for manufactured goods, reality shows they cannot.
There is a confluence of events all leading to radical changes just below the surface.  China has been burning cash to subsidize industries impacted by U.S. tariffs.  Simultaneously Beijing has lowered the value of their currency in an effort to eliminate the tariff impact in the cost of their finished goods. However, as the ideological economic conflict between the U.S. and China continues, Beijing cannot hold their position indefinitely.
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