Tue | Jul 16, 2019

Why tariff war threatens Beijing’s global economic ambitions

Published:Monday | May 13, 2019 | 12:14 AM
A customer looks at her iPhone in a store of US tech company Apple in Beijing on Friday, May 10. US President Donald Trump’s latest tariff hike on Chinese goods took effect Friday and Beijing said it would retaliate, escalating a battle over China’s technology ambitions and other trade tensions.

BEIJING (AP):

China’s intensified tariff war with the Trump administration is threatening Beijing’s ambition to transform itself into the dominant player in global technology.

The United States is a vital customer and source of technology for Chinese makers of electronics, medical equipment and other high-tech exports — industries that the ruling Communist Party sees as the heart of its economic future.

Yet, to the Trump administration, they’re a threat to America’s industrial leadership.

Beijing managed to keep Chinese economic growth steady in the most recent quarter despite a drop in exports to the United States. It did so by boosting government spending and bank lending. But China’s technology exporters suffered huge sales drops of up to 40 per cent, which ate into profits that pay for technology research.