Will the Trade War turn “kinetic”? Personally I doubt it: China knows the US is “master” of military warfare and they will do everything to avoid that scenario. China’s speciality is economic warfare. I suspect by the tone of the Huawei communications, the US may have beaten them at their own game. Trump proves yet again that love him or hate him, he is a smart player and always ahead of his opponents! MH
China Slams “Barbaric” US Behavior Toward Huawei as a “Declaration of War”
May 18, 2019 From Zerohedge via Activistpost
By Tyler Durden
(ZH) — A letter written by He Tingbo, president of HiSilicon, a semiconductor company owned by Huawei, was published on Friday in China. In the letter, which the Global Times described as “touching and which has won public support,” he said that employees of the company embarked on the “most stirring journey in technology history in recent years” to make backup products for Huawei and now these products will finally be put to use.
Or maybe not if Trump gets his way and Huawei is barred from operating in the US, something which the bond market is increasingly concerned about, sending the price on Huawei’s dollar bond plunging the most in history overnight.
The plunge came even though in his letter to employees, He Tingbo also claimed that Huawei will be able to continue its service to clients in such scenario, and will push for innovation and achieve technological independence.
In other words, China is increasingly forced to resort to hollow, jingoist propaganda to rally the people around the flag, such as this one from the Global Times Editor In Chief, Hu Xijin, who earlier on Friday tweeted that “Shanghai stock exchange index dropped 2.48% Friday due to worry of an overall escalation of trade war, but Huawei related stocks soared. This is vote of confidence of the market on Huawei’s long prepared back-up plan. Huawei’s US supplies will become real victims.”
Shanghai stock exchange index dropped 2.48% Friday due to worry of an overall escalation of trade war, but Huawei related stocks soared. This is vote of confidence of the market on Huawei’s long prepared back-up plan. Huawei’s US supplies will become real victims.
— Hu Xijin 胡锡进 (@HuXijin_GT) May 17, 2019
Going back to the Global Times, this is how the nationalist Chinese tabloid discloses that the propaganda war will be fought: with factless statement, and with sweeping emotional appeals such as this one:
Huawei is not only strong but wise, sober-minded and tenacious. Cutting off supplies from the US will not defeat Huawei, which has long been preparing for the dark moment. On the contrary, Huawei will start getting even stronger.
Well… not if you look at its publicly traded bonds. That said, the rest of the bellicose screed is rather entertaining, not to mention informative, so here it is in its entirety:
Huawei is the symbol of China’s ability to do independent research. As a private company, it is the forerunner of China’s reform and opening-up. It has been deeply engaged in the development of global communications and become the leader of 5G technology. That Huawei will not lose to the US is significant for China’s response to the US’ strategic suppression.The US has completely abandoned commercial principles and disregarded law. Its barbaric behavior against Huawei by resorting to administrative power can be viewed as a declaration of war on China in the economic and technological fields. It is time that the Chinese people throw away their illusions. Compromise will not lead to US goodwill.We must dare to compete with evil characteristics embedded in the US. While sticking to opening-up, China should become good at countering the US.In this fight against the US, we should abide by international rules and take into consideration the general trend of China’s reform and opening-up on the one hand. On the other hand, we should not be too gentle or worry about Western opinion. Any measure that can bite into the US and do no harm to China can be adopted.Obviously, the US has strengthened multifaceted aggression beside its economic warfare. China’s countermeasures in other fields should not be too soft either. We should abandon such thinking as not taking the lead to create trouble in China-US relations.The trade war launched by the US is becoming more and more like real war. At its core is the US resorts to unscrupulous means to suppress China while China is committed to crushing US arrogance. The US has been telling its people that China would soon make compromises, and we must break such lies by making clear China will not sign any unequal deal.The China-US trade war is reshaping this bilateral relationship. Chinese society must acknowledge that a fiercer strategic rivalry is unavoidable. Huawei cannot lose, nor can China. This is a real concern of our generation and the responsibility we should bear for China’s future.
While it remains to be seen if the trade war between the US and China will escalate into a “kinetic” one, it increasingly appears that this transition will be decided between Trump’s tweets and China’s populist appeals, which sooner or later will result in a complete boycott of US goods and services, forcing the US to escalate even more.