China will give token deals in order not to cut off ties completely. That is not China capitulating as some people seem to think. China will still buy USA agricultural products to keep USA farmers dependency on China intact. China is throwing straws at drowning entities to keep them alive, not to allow them to disappear completely and lose the leverage totally.
Boeing knows the Chinese market for planes is huge and cannot be dispensed with. The Chinese domestic aviation sector can survive on COMAC planes coming on-line fast. Boeing wants a piece of the action. Nividia needs the China market for its chips, but whether China falls for the same ploy to buy more Nvidia chips is the question. China had already put top priority on Chinese semiconductor firms to entice them to power their foray into chips. Letting Chinese tech to go back to buying Nvidia chips is betraying its own semiconductor players. China is intent on cutting its dependence on foreign chip makers knowing that it is a National Security risk if conflicts arise. The current chip war already revealed the consequences of putting China's National Security under undue pressure.
On the other hand, USA can cut off deals with China firms, but they already have alternative markets to enter into. China has all the cards to play around with, both its huge consumer market and the equally huge market it can get into in the Global South and had already positioned itself for any decoupling.
The USA tried playing the decoupling card and found itself shooting its own foot. Years of sanctioning Chinese firms did not collapse those Chinese firms like Huawei, but is instead making them more resilient, while USA firms being targeted are finding the going unsustainable. Companies like Boeing, Nvidia and a host of USA technology firms still wants to go into China to make money. The visit of Trump to China clearly shows that the new mantra is co-operation and allowing both sides to grow instead of throwing brickbats and bombs at each other.
But the last word is still for China to beware of USA treachery. The USA can never ever be trusted to honor its obligations. That is clearly shown over the last couple of decades.
Anonymous
Xi was just being diplomatic, but realistically I believe he does not probably want to even host Trump's visit. But knowing that the man is dying to do so for years and making a fool of himself through constant self-invitation to make Xi unable to decline.
ReplyDeleteThe visit was nothing more than a face-saving gesture accorded to Trump, nothing more. Nothing of significance had been achieved and analysts have said that the visit puts Xi in an even more prominent position of who is dictating the rules.
Trump has invited Xi to visit Washington in September. But there were no comments from the Chinese side. So, let us see.
Meanwhile Putin is visiting Xi these few days, probably sounding out Putin about what had been going on with the USA talks. On the card is putting certainty into a gas pipeline project for Russian gas into China. This is a sign of greater co-operation between Russia and China, giving Russia an even greater economic foundation in the years to come. What this means is that China will have alternatives to play with and be seeking less dependent on Qatar, Australia, USA among others for LNG that may be geopolitically inconvenient in times of conflict. China plans decades ahead, not building toilets when the urge to pee or poo is imminent.
China is in no hurry to end the Iran War. China has all the time in the world waiting for the USA to continue to exhaust its weapons and ammunition fighting Iran, that is already putting pressure on the military industrial complex to replenish the exhausted stockpile that had been built up over many years. The USA is being pushed into a corner, trying to force even non-military manufacturing logistics into weapons production. That shows the desperation.
ReplyDeleteWithout the ready availability of raw materials, making weapons is a problem for the USA, not to say trying to make more than it usually does. The existing capacity is also not enough and expanding it takes time. The raw materials like rare earth, tungsten, titanium, aluminum and steel are not readily available and most under sanctions, even against Canada, its former close ally.
China might be affected by Middle East oil and gas, but Russia has promised to supply more, while Iran is still moving oil by rail to China. Not as much as by sea, but every little bit counts. If the Russian LNG pipeline project gets to move with Putin now in China, that will also help China to mitigate its position going forward.
The fact of the matter is that China is never going to buy USA technology again. Not when it can be used against China as leverage. Those days are over.
ReplyDelete