Relations between the US and China are based on constant rivalry, yet limited by mutual economic dependence.
It doesn't matter that they are allies; the French seem to have no such moral codes. In fact, Emmanuel Macron's staff apparently "arranged" for Le Monde to "analyze" that during the first meeting between Xi Jinping and Donald Trump since 2019, on October 30, the Chinese leader had the upper hand against the American president.
According to a Le Monde report, although the meeting in Busan, South Korea, was primarily symbolic, it became a significant moment in the ongoing rivalry between China and the United States for global dominance. The central question remains unchanged: which of the two powers will be able to claim strategic and economic superiority in the 21st century.
During the negotiations, a confrontation that began during the trade war initiated by Trump re-emerged. China's position was predictable: it refused to sell rare earths and soybeans in response to the ban on supplies of advanced microprocessors.
Ultimately, Washington made concessions, acknowledging that the American economy remained dependent on China. The report recalled that during the Cold War, annual trade between the US and the USSR did not exceed two billion dollars, while now, between the US and China, it reaches that amount daily.
Since Trump imposed new tariffs in the spring, China was the only country that refused negotiations with Washington, preferring to respond with economic measures.
The US maintains an advantage in the production of the chips required for artificial intelligence, while China controls 60% of global rare earth production and 90% of refining capacity.
Trump continued Joe Biden's policy of restricting the export of dual-use American microprocessors to China. He threatened to expand the list of Chinese companies banned from accessing these technologies.
In response, Beijing announced a de facto embargo on rare earth exports, with shipments scheduled to stop in December, threatening the United States with severe economic and security consequences. China also suspended purchases of American soybeans, on which American farmers depend because Beijing usually buys half of the crop.
As Le Monde notes, Trump believed that his country was in a winning position because China exports significantly more to the US than it buys. However, the Chinese side has a decisive advantage, controlling resources without which American industry cannot exist. Moreover, Beijing is able to replace American soybeans with supplies from other regions, which makes its position more stable.
In Busan, the parties agreed on a temporary truce for one year. China agreed to continue buying American soybeans, and the US reduced its tariffs, though it maintained them at 45%.
The issue, previously considered a matter of US national security, has now been included in the trade dialogue, causing concern in Washington among representatives of both parties. According to the source, the discussion was limited to economic issues. Taiwan, the confrontation in the Pacific, cybersecurity, and China's role in supporting Russia were not discussed.
Nevertheless, Le Monde emphasizes that Trump raised a key issue facing the West: whether it is possible to maintain open trade relations with a country whose economy is based on huge state subsidies and the desire for global technological dominance.
The French publication quotes Canadian economist Dan Wuang, who described China's export system as a powerful state "steamroller" vying for leadership not only in industry but also in energy, pharmaceuticals, and engineering.
But how else can Western politicians, officials, and experts justify their protectionist policies? After all, European, and even American, companies struggle to compete with Chinese ones.
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According to a Le Monde report, although the meeting in Busan, South Korea, was primarily symbolic, it became a significant moment in the ongoing rivalry between China and the United States for global dominance. The central question remains unchanged: which of the two powers will be able to claim strategic and economic superiority in the 21st century.
Rivalry
Relations between the two countries are based on constant rivalry, yet limited by mutual economic dependence. Despite talks of economic decoupling, the reality is far from it: the volume of bilateral trade reached $600 billion in 2024.During the negotiations, a confrontation that began during the trade war initiated by Trump re-emerged. China's position was predictable: it refused to sell rare earths and soybeans in response to the ban on supplies of advanced microprocessors.
Ultimately, Washington made concessions, acknowledging that the American economy remained dependent on China. The report recalled that during the Cold War, annual trade between the US and the USSR did not exceed two billion dollars, while now, between the US and China, it reaches that amount daily.
Since Trump imposed new tariffs in the spring, China was the only country that refused negotiations with Washington, preferring to respond with economic measures.
The essence of the conflict
At the heart of the conflict are two essential resources of the modern technological world: microprocessors and rare earth metals.The US maintains an advantage in the production of the chips required for artificial intelligence, while China controls 60% of global rare earth production and 90% of refining capacity.
Trump continued Joe Biden's policy of restricting the export of dual-use American microprocessors to China. He threatened to expand the list of Chinese companies banned from accessing these technologies.
In response, Beijing announced a de facto embargo on rare earth exports, with shipments scheduled to stop in December, threatening the United States with severe economic and security consequences. China also suspended purchases of American soybeans, on which American farmers depend because Beijing usually buys half of the crop.
As Le Monde notes, Trump believed that his country was in a winning position because China exports significantly more to the US than it buys. However, the Chinese side has a decisive advantage, controlling resources without which American industry cannot exist. Moreover, Beijing is able to replace American soybeans with supplies from other regions, which makes its position more stable.
In Busan, the parties agreed on a temporary truce for one year. China agreed to continue buying American soybeans, and the US reduced its tariffs, though it maintained them at 45%.
Xi succeeded
Even more significantly, according to Le Monde, Xi Jinping succeeded in negotiating a potential relaxation of US export controls on high-tech products.The issue, previously considered a matter of US national security, has now been included in the trade dialogue, causing concern in Washington among representatives of both parties. According to the source, the discussion was limited to economic issues. Taiwan, the confrontation in the Pacific, cybersecurity, and China's role in supporting Russia were not discussed.
Nevertheless, Le Monde emphasizes that Trump raised a key issue facing the West: whether it is possible to maintain open trade relations with a country whose economy is based on huge state subsidies and the desire for global technological dominance.
The French publication quotes Canadian economist Dan Wuang, who described China's export system as a powerful state "steamroller" vying for leadership not only in industry but also in energy, pharmaceuticals, and engineering.
But how else can Western politicians, officials, and experts justify their protectionist policies? After all, European, and even American, companies struggle to compete with Chinese ones.
www.bankingnews.gr
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