Trade War with China

The United States has imposed sanctions on China’s defence procurement agency, the Equipment Development Department (EDD), following its acquisition of military equipment from Russia.

The US State Department said on 20 September that the EDD’s recent acquisition of Russian materiel breaches Section 231 of the Countering America’s Adversaries Through Sanctions Act, which was signed into law on 2 August 2017.

The State Department said the sanctions applied to the EDD – an agency under the State Council’s Central Military Commission (CMC) – and its director, Li Shangfu, “for engaging in significant [military] transactions” with Russia. The procurements referred to by the State Department comprise China’s acquisition of 10 Sukhoi Su-35 fighter aircraft and an initial batch of S-400 surface-to-air missiles.

“Both transactions resulted from pre-August 2, 2017, deals negotiated between EDD and Rosoboronexport, Russia’s main arms export entity,” it added.

In response to the decision, a spokesperson for the Chinese Ministry of Foreign Affairs said at a press conference on 21 September that the Chinese government “strongly urged” the US to withdraw the sanctions.

According to the State Department, the sanctions imposed on the EDD included: a denial of export licences; a prohibition on foreign exchange transactions under US jurisdiction; a prohibition on transactions with the US financial system; and a blocking of all property and interests in property within US jurisdiction.

The department also blacklisted 33 people and entities associated with Russian defence and intelligence sectors, adding them to a ‘List of Specified Persons’ (LSP) under Section 231 of CAATSA. The department added that the number of persons now identified on the LSP totalled 72.

The department said that Section 231 of CAATSA and the newly announced sanctions were “not intended to undermine the military capabilities or combat readiness of any country but rather to impose costs on Russia”.

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Jura said:

now I read in Facebook (it's

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"China's Foreign Ministry on Friday demanded the United States to immediately correct its wrongdoing and withdraw "sanctions" on the Chinese military.

The U.S. State Department announced Thursday that it would impose sanctions on the Equipment Development Department of the Central Military Commission of China and the department's director, alleging that China had violated the "Countering America's Adversaries Through Sanctions Act."

"China is strongly indignant at the unreasonable move on the part of the United States and has lodged stern representations to the U.S. side," Foreign Ministry spokesperson Geng Shuang told a routine press briefing.

"The U.S. move seriously breached the basic rules of international relations and severely harmed relations between the two countries as well as the two militaries," Geng said."

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US President Donald Trump has accused China of stealing manufacturing jobs from the United States. But he might be surprised to see what's happening at a manufacturing plant in California.

At the International Vitamin Corporation (IVC) manufacturing plant, the founder will tell you how China saved American manufacturing jobs.

Steven Dai is the CEO and founder of the plant. He laughs and smiles as he talks about it.

"We are very proud of ourselves. We had an employee base of 200 employees when we took over this company. So in eight years we have grown that to 1,100. So we've expanded our base and grown probably about six times!"

Steven grew up in Henan Province and moved to the US to attend Rutgers University. He graduated with a master's degree in 2000. Ten years later with foreign direct investment, most of which from China, he was able to buy the IVC.

He used the money to upgrade the facilities and expand the company.

In the process he has added all important manufacturing jobs in the US. He says the investment is being used to build something that will last a long term and they are not expecting to generate quick or easy cash. His company produces vitamins and nutritional materials that are sold at all the major retailers in the United States.

The IVC has facilities in New Jersey, Pennsylvania, and South Carolina with plans to add more plants in other states.

The success of the IVC is an illustration of the power of foreign direct investment from China.

A recent Pew Research study showed that China was outpacing other countries in creating jobs in the US through FDI.

The China General Chamber of Commerce tracks the numbers. Since 2005, Chinese member companies have poured in tens of billions of dollars into the US economy and provided jobs for hundreds of thousands of workers directly and indirectly. And while foreign direct investment is down dramatically in 2018, IVC executives feel it has become a story lost in the trade war narrative.

"I think we see a huge symbiotic relationship in our business certainly with China and the US. I think the story is not getting out there because it's very easy and convenient to vilify one side or the other. In the end, you are trying to create jobs, you are trying to enhance people's living, trying to build better lives for people and we can do that in partnership with foreign entities," said Eric Bauer, chief financial officer at the IVC.

The IVC will continue to churn out items to help with consumers' nutrition and wellness, but the company knows it will never be able to manufacture a remedy to improve the health of the US-China trade relationship.

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tidalwave said:

Xi needs to come out and tell Trump to F off.

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Totoro said:

There's 512 million people living in EU. And further 325 million people living in USA. And those people, on average, have much more money to spend than entire South America (420 million people) or Africa (1225 million people), for example. Entire Africa has nominal GDP of $2.19 trillion. Entire S. America has GDP of $3.94 trillion. EU is little over $17 trillion. US is little over $19 trillion. So average american can spend a lot more than an average African. Which is why US and EU markets are of utmost importance for ANY country in the world. Be it China, US or EU. Perhaps one miiiight do okay without severe presence decline in one of them. But not both.

The average money left to spend is even worse for poor countries than if one just took the GDP figure and divided it with GDP. Once the minimum money needed for basic sustenance is taken, what's left is even less for Africans than it is for US or EU. So in matters of external market to be tapped, US and EU don't just represent 45% of the world's market (as GDP ratio would suggest) but more, probably in the 50-60% range.

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