China Rethinks Economic Ties with US

China is exploring more drastic action as a result of its trade fight with the U.S., according to the South China Morning Post.

While China is open to resuming trade talks, “government advisers are now highlighting the risk of sourcing critical supplies from an increasingly hostile US…and are exploring ways for the country to cut its exposure to the US,” the paper said, citing Chinese researchers. The article was titled, “Donald Trump’s trade war and Huawei ban push China to rethink economic ties with US.”

And China is considering cutting natural gas purchases from the U.S. as part of this movement, the paper said.

“The idea that China should buy large amounts of natural gas from the U.S. must be revisited,” Wang Yongzhong, a senior fellow with the Chinese Academy of Social Sciences, a governmental think tank, told the Hong Kong-based newspaper on Monday.

The move came after President Donald Trump’s latest action to choke Huawei, effectively halting its ability to buy American-made parts and components. China is now threatening to stop funding an industry that the two countries have done sizable deals in. In 2017, China agreed to fund a natural gas project in Alaska worth US$43 billion, the South China Morning Post said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza