Will there be a Trade War between the United State

  PILECAP 15:55 16 Sep 2010

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Some members of China’s Politburo think the United States is in decline. China has warned the United States, it would come off worst in a Trade War. The United States for its part, has accused China of being a "currency manipulator", which could result in the possibility of triggering sanctions under US law.

The mood is hardening on both sides of the Pacific. The dispute risks escalating if China's trade surplus with the US climbs further and more US jobs are lost.

  PILECAP 15:58 16 Sep 2010

Will there be a Trade War between the United States and China?

  lotvic 17:16 16 Sep 2010

We live in turbulent times, anything could happen.

  Forum Editor 18:13 16 Sep 2010

I've been banging away about how China will one day outstrip all other nations in terms of its trading capacity. The Chinese government has consistently intervened to keep the value of its currency low against the dollar.

It should come as no surprise - China has to find foreign markets for its industrial output if it is to continue to grow its economy, and one way to help is by ensuring that Chinese goods are attractively cheap to American buyers.

The Chinese government would do well to remember that it fought for 15 years to get China into the World Trade Organisation, and when that finally happened (in 2001) there was much jubilation in Beijing. Member states are bound by a comprehensive set of rules, and manipulating a currency to create an unfair trading climate is definitely not on.

We'll hear more of this over the coming months.

  Pineman100 19:14 16 Sep 2010

I don't disagree with anything FE has said, although it's worth noting that China discontinued the pegging of the yuan to the dollar in June this year. This allowed the yuan to revalue slightly against the dollar.

  961 19:24 16 Sep 2010

Too late for all that

British manufacturing decamped to China 10 years ago

What's left is now muchly owned by India

You go to Argos or Currys and much of the stuff with British brand names on the front says "Made in China" on the back or underneath

China has made a tiny move towards revaluing the currency against the dollar and will no doubt make more (tiny) moves to keep it's nose clean

In the meanwhile be aware it's started buying gold instead of investing in dollars

The time to have got hold of it all was when it started selling Windows for peanuts. Too late now

And what about the world wide web and Google in China?

What was the phrase? The sleeping tiger/dragon?

  PILECAP 22:04 16 Sep 2010

Although China pledged in June 2010 to allow a more flexible exchange rate against the U.S. dollar, the Yuan has only risen about 1% since then. China spends an estimated $1 billion a day to keep its renminbi more or less pegged to the dollar.

  Dragon_Heart 22:35 16 Sep 2010

... food aid shipments to the Chinese ?

Have you noticed that despite lower manufacturing costs these goods are still no cheaper to the British public.

'currency manipulator' ? What was the phrase ? Something about a pot & kettle ( bet they are now made in China ).

  Forum Editor 22:44 16 Sep 2010

Too late for all what?

China is Europe's biggest source of manufactured goods, around €250 billion a year, and the Chinese will do everything they can to hang onto/increase that volume, including a little currency manipulation.

The Chinese import volume has decreased over the past 18 months, due to economic circumstances, and that will be worrying a Chinese government desperate for foreign market share. Holding the currency low is a big temptation, and the WTO will be watching carefully.

  robgf 00:49 17 Sep 2010

They really should make history compulsory at school.
China is just the latest "workshop of the world", all you need is a very cheap labour force and good transport links.
The UK started the trend with the industrial revolution, until too many workers wanted to own what they produced and production costs rose.
Nowadays the cycle happens quicker than ever, no doubt due to better communications. Making it hard to maintain the necessary compliant work force. I predict that China will lose its "workshop of the world" title within a decade, losing it to a cheaper work force.

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