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Media Report
January 22 , 2017
  • Reuters reports that Chinese state media on Saturday said that it hoped the new U.S. administration of President Donald Trump understood the importance of relations with China, but that Beijing should also prepare for the worst. On the campaign trail, Trump railed against China, accusing it of stealing American jobs, and also angered Beijing by taking a call from the president of self-ruled Taiwan, which China views as a wayward province with no right to formal foreign ties.While Trump made no direct mention of China in his inaugural address, he struck a defiant tone, saying American workers have been devastated by the outsourcing of jobs abroad. In a front page commentary, the overseas edition of the ruling Communist Party's official People's Daily said the two countries should not try to force each other into submission, but look for win-win cooperation and manage their disputes. Sister paper the Global Times, an influential publication which often strikes a stridently nationalistic tone, noted that while Trump has said a lot about China, his actual policy has yet to take shape.
  • Newsweek reports that if the U.S. suddenly stopped trading with China, the consequences would be devastating for both countries. The U.S. and China are so substantially intertwined that they are in some sense part of a single economic system. An abrupt end to that relationship would result in a major recession in both countries. The U.S. economy would eventually recover, but China would likely enter a depression that could result in its economic and political collapse. The consequences would extend far beyond the U.S.-China import/export relationship. The biggest potential impact would be a macroeconomic meltdown. The loss of trade with the U.S. would send the value of China's currency into freefall. This would force a fire sale of China's massive dollar-denominated foreign exchange reserves, principally held in U.S. Treasury securities. Yields on U.S. government debt would likely spike.

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