Trump said he doesn't see a recession after the bond market spooked investors and the Dow suffered its worst day of the year last week.Marketsread more
Ahead of the deadline, U.S. President Donald Trump told reporters that Huawei was a national security threat.Technologyread more
Baidu is gearing up to release its second-quarter earnings on Monday with the market expecting a sharp decline in profit.Technologyread more
Americans now say they approve of free trade by 64%-27%, a margin of better than two to one. That's up from 57%-37% early in Trump's presidency, and 51%-41% near the end of...Politicsread more
Stocks in Asia edged up Monday afternoon as U.S. Treasury yields bounced higher after plunging last week.Asia Marketsread more
The problem with tanking equities lies elsewhere, writes Michael Ivanovitch, because traders see no end to America's unfolding trade disputes with Europe and China.World Economyread more
Beijing wants to use reforms to support a slowing economy.China Marketsread more
Trump said Cook made a "good case" that it would be difficult for Apple to pay tariffs, when Samsung does not face the same hurdle because much of its manufacturing is in...Technologyread more
The yield on the benchmark 10-year Treasury note briefly fell below the 2-year rate on Wednesday, a phenomenon in the bond market known as yield curve inversion, which is...Marketsread more
Despite aggressive strides, Waymo needs one thing before their self-driving cars become a seriously useful transportation system: people. We talked to the ones closest to it.Technologyread more
The hearing will now begin next Monday to allow time for the completion of a previous trial that revolves around former 1MDB unit SRC International, a Kuala Lumpur High Court...Asia Newsread more
Beijing's incantations about "win-win cooperation" and its alleged search of a harmonious "great power relationship" ring hollow when confronted with an unwisely excessive and systematic trade surplus China maintains with the United States.
All that talk is blatantly at odds with China's $794.4 billion trade surplus on its U.S. goods trade since the current administration took the helm in Washington in January 2017.
One can also be forgiven for taking that as a brazen provocation of an American government pledging to stop the accelerating growth of its foreign debt, and to protect the little employment that remains in America's devastated import-competing manufacturing industries.
Like all excesses, this one too can badly backfire on China. And it's not clear what China's economic and political interests are served as Beijing keeps deliberately pushing the U.S.-China trade relationship into a growing and unsustainable imbalance.
No, China should know that, at some point, the abused party wants out — sometimes violently.
An act of enlightened statesmanship, therefore, would want to avoid such a conflict, especially if its guiding principles in international relations are a "win-win cooperation" and great power ties compatible with "a community of shared future for mankind."
None of that can be seen in China's relations with the present U.S. administration. In the course of 2017, China's trade surplus on American trades increased 8.1 percent. Last year, the growth of China's trade surplus accelerated to 12 percent, with its exports to the U.S. surging 17.4 percent, to a whopping $594 billion, while China's purchases from the U.S. fell 7.4 percent to the pitiful $120.3 billion.
That's not a mere provocation; that's a triumphant defiance.
That sounds like an extravagant — perhaps even foolhardy — generosity of a man whose presidency is on the line as a result of losing an unassailable trade case against China. The legions of Trump's discontents, and those whose livelihoods have been destroyed by trade with China, are certain to remind him — at the ballot box — that allowing Beijing to get away with record-breaking amounts of net income on its American trades is an unforgivable piece of economic mismanagement.
If that is not part of China's hidden agenda, here are some ideas of what Beijing could do to avoid a major bilateral crisis that could seriously damage an already dangerously tense U.S.-China relationship.
WATCH: Trade deal or no deal, the U.S. and China are still fighting for global power
First, approach the issue with a sense of urgency it deserves. Promptly begin to diversify Chinese exports away from U.S. markets, and strongly step up purchases of American goods and services to quickly stop and markedly reverse the trend of China's growing bilateral trade surpluses.
Second, with such a sincere show of good faith, Beijing should adopt regulatory changes offering internationally comparable guarantees for the protection of intellectual property and prohibition of forced technology transfers to Chinese joint-venture partners. China's apparently large panoply of non-tariff barriers to trade should also be dismantled.
The vigilant members of the China-based American and international chambers of commerce, and the World Trade Organization, will serve as keen observers that China is properly implementing and enforcing its trade regulations.
Third, China can benefit from an enhanced International Monetary Fund surveillance, technically called Article IV consultations. That would make sure that China's monetary, fiscal and structural economic policies — which include both domestic and foreign trade — are fully in compliance with international rules and best practice policies.
In addition to that, China may also wish to engage in extensive biannual economic examinations with the Organization of Economic Cooperation and Development to get an independent expert assessment of the entire spectrum of its economic policies. That's what the OECD does well, and that could be a very useful source of unbiased advice. Such examinations would also shield China from widely publicized amateurish attacks on its economic management.
Fourth, the IMF consultations and the OECD's biannual examinations would provide unimpeachable expert opinions on China's monetary policies and its managed floating exchange rate. That would preserve China's monetary sovereignty and offer much-needed advice about the country's highly sensitive capital account transactions.
How China frames those steps within the ongoing trade negotiations with the United States is a matter of its own judgment.
But one thing should be clear: Dragging on the negotiating process while continuing to accumulate China's huge surpluses on American trades is over. Washington has finally come to the point where it can no longer tolerate inconclusive talk fests while China laughs all the way to the bank.
To be sure, though, getting the trade surplus issue out of the way will not radically improve the U.S.-China relations. That's impossible as long as America's security experts consider China a "strategic competitor" and "a revisionist power" determined to challenge America's world order.
One could expect, however, that a meaningful progress on bilateral trade problems could open more space to address acute security issues in a constructive manner, although, again, there is no guarantee for such an outcome. China's contested maritime borders, Korean problems and Beijing's Belt and Road transactions will remain America's war and peace issues for the foreseeable future.
The financial community should stop fretting about the U.S.-China tug of war on trade issues. That is a peripheral and purely trading event.
The policy of the U.S. Federal Reserve is the only thing that can crash Wall Street, and the rest of world bourses, relegating them to a protracted bear market.
At the moment, with a relatively well-behaved U.S. inflation, the Fed has no reason to provoke a sustained decline of American and world asset prices.
China would do well for itself to get its unsustainable trade imbalance with the U.S. out of the way — quickly and resolutely.
Commentary by Michael Ivanovitch, an independent analyst focusing on world economy, geopolitics and investment strategy. He served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York, and taught economics at Columbia Business School.