China Accuses US Of Fabricating Trade Data, Warns "Trade War Would Be A Disaster"

While Canada and Mexico and soon other US "allies" have so far been spared the brunt of the Trump import tariffs on aluminum and steel imports as a result of "indefinite" exemptions for the duration of Nafta negotiations, China - the country that is the target of Peter Navarro's trade scorn - has not been so lucky, and the result has been an outpouring of increasingly hostile jawboning by Beijing, which while taking the Trump gambit in stride so far, is clearly concerned how far Trump could ratchet up protectionist measures.

As a result, on Sunday China said that it will not initiate a trade war with the United States, but vowed to defend its national interests in the face of growing American protectionism.

"There are no winners in a trade war, and it would bring disaster to our two countries as well as the rest of the world," China's Minister of Commerce Zhong Shan said at a briefing on the sidelines of the country's annual parliamentary session according to AP.

"China does not wish to fight a trade war, nor will China initiate a trade war, but we can handle any challenge and will resolutely defend the interests of our country and our people," he said.

Shan's statement was Beijing's latest official remark on "problems in Sino-U.S. economic trade and cooperation," alluding to Trump's plan to impose tariffs on imported steel and aluminum.

To be sure, Chinese leaders have threatened in the past to retaliate against raised trade barriers, but have yet to take direct action following Trump's announcement. Earlier in the week, China’s Foreign Minister, Wang Yi, vowed a "justified and necessary response" to Washington’s initiative, but that too has yet to take any concrete shape.

Prior to signing the order, Trump urged Beijing to come up with a concrete proposal to reduce their trade deficit with the United States, although according to experts Trump tweeted a wrong number and meant for a $100 billion reduction in the US-Chinese trade deficit, rather than the $1 billion number he tweeted.

“China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States,” Trump tweeted. “Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!”

Meanwhile, in the latest unexpected twist, Shan said that according to Chinese researchers, the U.S. has been overstating its trade deficit with China by about 20 percent every year. This is surprising as traditionally it has been China that has been accused of fabricating its trade data to make its economy appear strong that it actually is; Beijing turning the tables on Washington is therefore a first, and threatens to bring far greater scrutiny to China's trade numbers which on numerous occasions have been revealed to be completely made up.

Shan gave no details on how this figure was reached, but the U.S. and Chinese governments generally report widely differing trade figures because Beijing counts only the first port to which goods go instead of their final destination.

The U.S. reported a $375 billion deficit with China last year, so a 20% reduction would still be among the largest trade gaps that the U.S. has with any country, and would almost fill Trump's desired $100 billion reduction.

Zhong blamed the trade imbalance in part on controls over U.S. high-tech exports to China, repeating a Chinese claim that Washington could narrow its trade deficit if it allowed China to buy more "dual use" technology such as supercomputers and advanced materials with military applications.

Translation: if only the US would allow China to reverse-engineer its latest technological achievements, Beijing would be far more eager to grant Trump's his wish, although in light of the recent fallout from the Broadcom-Qualcomm merger attempt, which now has the CFIUS is involved, that is hardly in the cards. It also explains the official US response, that such sales make up only a few percent of the deficit while possibly threatening American national security.

To be sure, the Trump tariffs are only the latest shot across the bow in trade wars that originally started under the Obama administration, as shown in the table below:

Furthermore, several weeks prior, the Trump administration approved higher tariffs on Chinese-made washing machines, solar modules and some other goods, prompting Beijing to accuse Washington of disrupting global trade regulation by taking action under U.S. law instead of through the World Trade Organization.

* * *

In an attempt to ease trade tensions, Liu He - the top economic advisor to President Xi Jinping - visited Washington earlier this month in an attempt to smooth strained ties. Zhong said China would continue to "relax market access" to China and said China would also attach greater importance to intellectual property right, another point of tension with the U.S.

China absorbed $136.3 billion in foreign investment last year. The country has long been among the top global destinations for investment, but foreign enthusiasm is cooling. Surveys by business groups show companies are shifting emphasis to other Asian economies seen as more profitable or less restrictive.

"We have noticed that some foreign-funded businesses have complained about China's investment environment," Zhong said. "The fact that they have complaints indicates that they are still paying attention to China's development and have confidence in China's market."

That... or they are merely complaining because, well, it's kinda impossible to invest in a centrally-planned economy in which the massive state support for local enterprises has led to an tide of undead, zombie companies which recently prompted the IMF highlight "The Walking Debt: Resolving China’s Zombies."

Meanwhile, for all the posturing and rhetoric, Trump actually appears to be right in his demands for "fair" trade treatment by Beijing, which has a documented history of lying about what it will do as opposed to what it actually does: as a confirmation, watch how CNBC's Eunice Yoon was "Harassed" By Police After Exposing China's "Dirty" Steel Secret.

CNBC reporter escorted out of 'steel-free' town in China from CNBC.

For now, however, it appears that China's response has been that if the US will mitigate its trade terms with Beijing, it will allow US investors to invest in its various ponzi schemes. We doubt that the Trump administration will find that particular offer even remotely appealing.


TeethVillage88s Four Star Sun, 03/11/2018 - 15:54 Permalink

My God What have Bill & Hillary Done with the Help of Richard Nixon, Connolly, Volker, Larry Summers, Robert Rubin, Bernanke, Greenspan, Geithner, Yellen. ($3.6 Foreign Investment USA) ($2.86 Private Domestic Investment) ($32 Trillion in Foreign Ownership in Property in the US compared to $26 Trillion of US Ownership in foreign countries) (Gini Ratio/Coefficient, what? discontinued?)

Constant Dollars, Weekly Earning same in 1979 as 2016.

Labor Force Statistics from the Current Population Survey (Historical Data, Table 2, constant dollars, all workers)

Negative - 780 Billion Trade Balance (Tab to Data)

Trade balance ths, $bn % of GDP, 2016* Feb 16th, per $ year ago, per $ % of GDP 2016* 3-month latest 10-year government bonds, latest  United States -790 Dec2017

Total Current Account Balance for the United States (BPBLTT01USA637S) 2006 = - $800 Billion?

In reply to by Four Star

GUS100CORRINA Four Star Sun, 03/11/2018 - 15:54 Permalink

China Accuses US Of Fabricating Trade Data, Warns "Trade War Would Be A Disaster"

My response: ROFL!!! The EMPEROR (CHINA) has no clothes. They have been caught in lie after lie. Their economic data is a FABRICATION based on lies and deception. If CHINA would come clean, it would be refreshing.

The POTUS has called their BLUFF and they don't like it.

In reply to by Four Star

steve2241 Four Star Sun, 03/11/2018 - 18:14 Permalink

Don't get sucked into this us against them rallying cry.  Nor am I pro-China.  But read the following piece from Zerohedge yesterday that refers to "mobile capitalism".  How many hundreds of billions of dollars of trade (and profits) emanating from China is financed and pocketed by American, European and non-Chinese Asian companies?  I believe it's the vast majority, and due to antiquated trade accounting practices, the donkey has been pinned on the back of China.

Sure, the lives of many Americans have been destroyed over the past few decades due to offshoring and free trade.  And high tariffs against China may be due, but the majority of the benefits of this long-running scam may very well have flowed into the coffers of our very own multi-nationals!  The Chinese nation, itself, has been a mere bit player in it all, a pawn and convenient scapegoat.…


In reply to by Four Star

Kayman Four Star Sun, 03/11/2018 - 18:29 Permalink

So..... China is saying all those containers rolling along our tracks and at our ports, are actually empty containers from China and fully-loaded with American-made products when reloaded onto their ships.  Jeez. You would think the Chinese were Democrats, the way they tell you they're not pissing on your leg.

In reply to by Four Star

Escrava Isaura Oldguy05 Sun, 03/11/2018 - 16:05 Permalink


Will the conservatives ever learn? Unlikely.

Second, MAGA is a total joke. How will make some steel manufacturer selling their goods to the American consumer at a higher price help US business?

All the while:

Not funding healthcare help employment?

Taking the waiters tips will help wage growth?

Cutting teachers’ salaries will help the middleclass?

Giving a tax-cut to the middleclass that expire while the rich get to keep theirs.


As the say goes: “If you can't dazzle them with brilliance, baffle them with bullshit.”  W.C. Fields


And there's no one better than Trump in the art of bullshitting. No one.

In reply to by Oldguy05

Xena fobe Consuelo Sun, 03/11/2018 - 17:23 Permalink

But it was all planned in advance by financial interests.  They had to gobble up competition and raid those who they could not buy.  With only a hand full of players, those who remained had to outsource to compete. 

The regulations should not be that onerous now that the regulators have been captured.  

In reply to by Consuelo

Kayman Consuelo Sun, 03/11/2018 - 18:36 Permalink

A huge portion of Chinese steel mills are more antiquated then steel mills shut down and scrapped in the U.S.  Only slave labor wages and ZERO pollution control laws make China competitive (and a little help from the Chicom Party and Bank of China.

First, then came and destroyed our industry. And I said nothing....

In reply to by Consuelo

zzz111 NickyGall Sun, 03/11/2018 - 16:43 Permalink

Trade deficit with China has gone up from 300 billion in 2011 to 380 billion now.  It is true that trade war with China would be a disaster for China.  China does not want don't want fair trade.  Right now the US is going into debt paying for government jobs and persons to attend college.  The biggest employers by states are either Wall-Mart or Universities except for Washington that is listed as Boeing.  At least we have one state that makes something exportable.  Imagine factories coming back and persons getting high paying business jobs instead of working at Wall-Mart.

In reply to by NickyGall

JoseyWalesTheOutlaw Sun, 03/11/2018 - 15:06 Permalink

The Don and his Team are over the Target since they're receiving heavy flak.


Expect to pay more for your plastic flowers and stick furniture. The Don is bringing all the globalist onto the stage.......

truthalwayswinsout Sun, 03/11/2018 - 15:12 Permalink

The people who got rich off of screwing the US factory worker are sitting and laughing their asses off.

The biggest culprits are Apple, Amazon, and Walmart.

Stop their trade with China and 70% plus of the trade deficit disappears overnight.

It is an easy thing to do. China is not a free trading economy. They lie, cheat and steal and all you have to do is put a 100% tariff on all Chinese goods. The Chinese Communist Party would disappear almost overnight if a trade war broke out with the US. 

Of course, Amazon, Apple and Walmart would suffer but who really cares?

Consuelo Theta_Burn Sun, 03/11/2018 - 16:09 Permalink

'For now' - indeed...

The Chinese have not been buying up natural resource property, making agreements, buying gold, etc., all over the world for the past decade as trinkets, nor are their plans & actions towards the One Belt initiative for the purposes of geopolitical bluster.   

The worlds largest land mass and 2/3 of the global population demand it, and they are going to bring it.    Playing 'nice' and being accommodating to the U.S. (consumer), days are numbered anyway, and the Chinese know this.   Unfortunate that our political class (aside from President Trump), don't...

In reply to by Theta_Burn

TeethVillage88s Sun, 03/11/2018 - 15:19 Permalink

The 5 Top January-December 2017 U.S. Partners : Total Merchandise Trade, 2011-2016 ($BILLION)

.WORLD, EXPORTS, $1,451.01, $1,546.730, 100.00
Canada, EXPORTS, $266.80, $282.47, 18.26%
Mexico, EXPORTS, $229.70, $242.99, 15.71%
China, EXPORTS, $115.60, $130.37, 8.43%
Japan, EXPORTS, $63.24, $67.70, 4.38%
UK, EXPORTS, $55.29, $56.33, 3.64%

.WORLD, IMPORTS, $2,187.80, $2,342.91, 100%
China, IMPORTS, $462.62, $505.60, 21.58%

CoinBug21 Sun, 03/11/2018 - 15:26 Permalink

I heard that Bitcoin Cash is the real Bitcoin.  They “forked” it so that they could keep their equity via BCH and then monetize the big runnup via selling BTC to the suckers.   BTC is worthless.  BCH is the future of the universe.

CoinBug21 Sun, 03/11/2018 - 15:26 Permalink

I heard that Bitcoin Cash is the real Bitcoin.  They “forked” it so that they could keep their equity via BCH and then monetize the big runnup via selling BTC to the suckers.   BTC is worthless.  BCH is the future of the universe.

ItsDanger Sun, 03/11/2018 - 15:31 Permalink

Only a total moron would not believe there is a massive trade deficit with China.  The evidence is overwhelming.  Even if his 20% was accurate, the trendline makes it irrelevant.  Not a great first response.

steve2241 ItsDanger Sun, 03/11/2018 - 18:27 Permalink

If you are an American billionaire that set up a manufacturing plant in China that exports ten billion dollars of merchandise to the U.S. of A. every year, that would create a $10 billion trade deficit with China.  But is that the fault of China, the American entrepreneur or the American government that lets the merchandise be imported tariff-free?

In reply to by ItsDanger

Kayman steve2241 Sun, 03/11/2018 - 18:47 Permalink

Fault?  Fake Americans (our ignorant .01%)  selling snake oil "Free Trade" while building up the enemy-China.

For fucks sake, biggest number on Walmart's balance sheet is 90 day plus payables- squeezing the life out of their small suppliers.

And Amazon?  256 times share price/ earnings ratio, based on an internet Sears Catalog?  Only free money has kept these fucks afloat.

In reply to by steve2241

Oldguy05 Sun, 03/11/2018 - 15:33 Permalink

This trade deficit overstatement could very well be true. As we all know, many of the numbers published by .gov are frequently over/understated as need be to suit the narrative.

edit: Example - Unemployment numbers not counting those in the target age group no longer looking for work.