China responds to Trump tariffs with proposed list of 128 US products to target

[Kaimin]

Chances are China will back down to allow their economic to mature and grow for few more decades.
Basically I feel PRC got a lot more to lose and their development derailed if they are to do otherwise.

China's economy is actually a house of cards at the moment. Their banks, zombie state companies and mega size property developers all depend on the constant creation of new credit to keep stable. Any distruption of their economy will mean disruption to this credit creation and result in higher funding costs and could potentially cause a big uncontrollable deleveraging in their markets. 

Also China is only ~8% of US exports which is not that significant overall. 

https://wits.worldbank.org/CountrySnapsh...A/textview
The top five countries to which United States exported 2016 along with the partner share in percentage are:

1. United States exports to Canada worth US$ 266,765 million, with a partner share of 18.39 percent.
   
   
2. United States exports to Mexico worth US$ 229,702 million, with a partner share of 15.84 percent.
   
   
3. United States exports to China worth US$ 115,602 million, with a partner share of 7.97 percent.
   
   
4. United States exports to Japan worth US$ 63,234 million, with a partner share of 4.36 percent.
   
   
5. United States exports to United Kingdom worth US$ 55,280 million, with a partner share of 3.81 percent.
   

However USA is China's top export market.
https://www.statista.com/statistics/2563...ort-value/

It is quite obvious who will benefit more from a trade war, or in this case who will suffer more, and who has more bargaining power.

Another thing trump has got right is the intellectual property protection. Even for simple things like movies, piracy in china causes a lot of loss in revenue. 

And of course if Ebay/Amazon/Google/facebook were to be allowed to operate freely in China without restriction, as in a free trade situation, the billions made by tencent/alibaba/etc... would all have gone to the american companies and american economy. IMHO this tech barrier is a big unfair trade situation which China has been happily exploiting for years.

This opinion on China's credit market is pretty common, but not accurate because Chinese credit markets aren't like ours. Most of the loans are issued by state owned banks, which combined with the ability of the government to create currency, gives them a lot more flexibility in monetary policy. Soros IIRC predicted in 2012 that the Chinese economy would collapse any second now because of debt, but it has failed to happen.

[edragon]

Chances are China will back down to allow their economic to mature and grow for few more decades.
Basically I feel PRC got a lot more to lose and their development derailed if they are to do otherwise.

China will negotiate in a position of strength ("Look, we will hit you where it hurts the most"); U.S. with weakness ( We already suffered enough "Enough is enough").

Trump: 'We are not in a trade war with China, that war was lost many years ago' LINK

Chinese sayings; "The Poor can never fight with the Rich".  And, hope to win.

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