The ongoing sharp deterioration in U.S.-China ties poses risks to both countries and the rest of the world, in a July 26, 2020 story. (Photo by THE ASSOCIATED PRESS)

The ongoing sharp deterioration in U.S.-China ties poses risks to both countries and the rest of the world, in a July 26, 2020 story. (Photo by THE ASSOCIATED PRESS)

Trade, technology and security at risk in US-China feud

Military tensions largely focused on South China Sea

BEIJING — They have the largest economies in the world. They spend more than anyone else on their militaries. From high-tech chips to control of the high seas, their interests are closely intertwined.

The ongoing sharp deterioration in U.S.-China ties poses risks to both countries and the rest of the world. In the latest escalation, a U.S. consulate in Chengdu in southwestern China shuttered Monday, ordered by China to close in retaliation for the U.S. shutting down its consulate in Houston last week.

With the U.S. presidential campaign heating up, all bets are that relations with China will only get worse. A look at what’s at stake:

TRADE

Both countries already have suffered heavy losses in a tariff war that erupted in 2018 over Beijing’s technology ambitions and trade surplus. If talks on ending the dispute fail, the world could face downward pressure on trade at a time when the global economy is already reeling from the coronavirus pandemic.

The United States is China’s biggest single-country export market, even after President Donald Trump imposed punitive tariffs on Chinese goods. And China is the No. 3 market for American exporters, as well as a huge market for goods and services produced in China by U.S. companies ranging from General Motors Co. to Burger King.

Chinese purchases of American farm goods, semiconductors and other goods declined 11.4% last year but still exceeded $100 billion. Exports to China support just under 1 million American jobs, according to the U.S.-China Business Council, though that was down 10% from 2017’s peak.

China is the biggest export market for Iowa and other American farm states, which were slammed when Beijing suspended imports of soybeans and raised tariffs on pork and other goods.

That briefly boosted sales for soybean exporters in Brazil and Argentina, though China resumed buying lower-priced American beans under the “Phase 1” trade truce signed in January.

But if the two can’t resolve broader differences on trade, it will be a blow not only to their exporters but also to other Asian economies that supply China’s factories with raw materials and components.

___

TECHNOLOGY

U.S. and Chinese producers of telecom, computer, medical and other technology and their markets are tightly interwoven. Apple, Dell, Hewlett-Packard and others rely on Chinese factories to assemble most of their smartphones, computers and other consumer electronics. Those factories need processor chips and other components from the United States, Japan, Taiwan and Europe.

The disruption caused by moves including the Trump administration’s curbs on Chinese tech giant Huawei’s access to U.S. components and technology threatens to disrupt those flows and cost suppliers, including Silicon Valley companies, billions of dollars in lost revenue.

China is also a top market for Apple and other U.S. tech brands, and is increasingly becoming a technology competitor with its own brands in smartphones, medical equipment and other fields.

The United States often is the top market for China’s highest-value-added goods. Beijing has been urging exporters to find other markets, but many say Asian and even European markets won’t buy such high-value goods.

___

SECURITY

While the U.S. has long been the predominant military power in the Pacific, China now has two operational aircraft carriers and an arsenal of missiles seen as a threat to U.S. vessels and bases in the region.

Military tensions have largely focused on the South China Sea, a crucial waterway that is the subject of overlapping territorial claims by China and several smaller Asian nations.

In 2018, a Chinese destroyer came perilously close to colliding with a U.S. destroyer, the USS Decatur, while executing what the Navy called an “unsafe and unprofessional manoeuvr” in the South China Sea.

A Chinese fighter jet collided with a U.S. Navy surveillance plane in international airspace over the South China Sea in 2001, leading to major diplomatic incident after the U.S. plane made an emergency landing on a Chinese island.

Taiwan is another potential flashpoint. China claims the self-governing island as its territory, to be taken by force if necessary. The U.S. is bound by its own law to ensure the island has a credible defence and has approved military sales to Taiwan under Trump.

Taiwan’s foreign minister said last week that Chinese military flights near the island have been taking place on a near-daily basis, more frequently than previously reported.

Washington upped the ante earlier this month by declaring that it did not recognize most of China’s maritime claims in the South China Sea, a break with its previous policy of not taking a stance on the sovereignty disputes.

By The Associated Press

ChinaeconomyUnited States

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta’s chief medical officer of health Dr. Deena Hinshaw announced 16 additional deaths Thursday. (Photo by Chris Schwarz/Government of Alberta)
No easing of Alberta’s COVID-19 measures Thursday, 678 new COVID-19 cases

The province also hit 1,500 COVID-19 deaths since the beginning of the pandemic

Bashaw Farm & Building Supplies Ltd. won the social media challenge run in the spring of 2020. (Photo submitted)
Community Futures brings back Social Media Challenge for 2021

This time the challenge is for non-profits and community groups

Alberta Premier Jason Kenney said the Canadian government should consider sanctions on the U.S. if they refuse to reconsider the decision to cancel the Keystone XL Pipeline. (THE CANADIAN PRESS/Sean Kilpatrick
Keystone XL officially cancelled, Kenney vows to fight on

U.S. President Joe Biden cancelled the presidential permit for the pipeline on first day of office

Alberta’s chief medical officer of health Dr. Deena Hinshaw said province’s test positivity rate for COVID-19 is steadily declining. (Photo by Chris Schwarz/Government of Alberta)
669 new COVID-19 cases in Alberta, 21 additional deaths

COVID-19 test positivity rate down to 4.5 per cent

Alberta Chief Medical Officer of Health Dr. Deena Hinshaw reported an additional 456 COVID-19 cases over the past 24 hours. (photography by Chris Schwarz/Government of Alberta)
Five new COVID-19 deaths in Central zone, two in Red Deer

Province reports 456 new cases of COVID-19

A scene from “Canada and the Gulf War: In their own words,” a video by The Memory Project, a program of Historica Canada, is shown in this undated illustration. THE CANADIAN PRESS/HO - Historica Canada
New video marks Canada’s contributions to first Gulf War on 30th anniversary

Veterans Affairs Canada says around 4,500 Canadian military personnel served during the war

Gov. Gen. Julie Payette takes the royal salute from the Guard of Honour as she makes her way deliver the the throne speech, Wednesday, September 23, 2020 in Ottawa. THE CANADIAN PRESS/Fred Chartrand
Gov. Gen. Julie Payette resigns, apologizes for ‘tensions’ at Rideau Hall

Payette, who is the Queen’s representative in Canada, has been the governor general since 2017

Grounded WestJet Boeing 737 Max aircraft are shown at the airline’s facilities in Calgary, Alta., Tuesday, May 7, 2019. WestJet will operate the first commercial Boeing 737 Max flight in Canada today since the aircraft was grounded in 2019 following two deadly crashes. THE CANADIAN PRESS/Jeff McIntosh
Passengers unfazed as WestJet returns Boeing 737 Max to service on Calgary flight

After a lengthy review process, Transport Canada cleared the plane to return to Canadian airspace

Lucas Berg, left, with the backpacks filled with essential items he donated to the Red Deer Mustard Seed Jan. 19, 2021. (Photo submitted)
Central Alberta teenager donates filled 20 backpacks to Red Deer Mustard Seed

Lucas Berg, 14, of Ponoka County says he ‘just wants to help people’

A conveyor belt transports coal at the Westmoreland Coal Co.’s Sheerness mine near Hanna, Alta., on Tuesday, Dec. 13, 2016. Coal mining impacts are already occurring in Alberta’s Rocky Mountains even as debate intensifies over the industry’s presence in one of the province’s most beloved landscapes. THE CANADIAN PRESS/Jeff McIntosh
As Alberta debates coal mining, industry already affecting once-protected Rockies

UCP revoked a policy that had protected eastern slopes of the Rockies from open-pit coal mining since 1976

In this Dec. 18, 2020 photo, pipes to be used for the Keystone XL pipeline are stored in a field near Dorchester, Neb. TC Energy Corp. is planning to eliminate more than 1,000 construction jobs related to its decision to halt work on its Keystone XL pipeline expansion project. THE CANADIAN PRESS/Chris Machian /Omaha World-Herald via AP
TC Energy cutting more than 1,000 Keystone XL construction jobs as Biden pulls permit

Some 200 kilometres of pipe have already been installed for the expansion

Kyla Gibson with her boyfriend Gavin Hardy. (Photo used with permission)
Sylvan Lake couple lose ‘fur babies’ to house fire

‘They were our world and nothing will ever replace them,’ Kyla Gibson said of her three pets

(Thesendboys/Instagram)
Video of man doing backflip off Vancouver bridge draws police condemnation

Group says in Instagram story that they ‘don’t do it for the clout’

Most Read