TRUMP'S TRADE WAR : China's Xi Jinping has a few "trump cards" up his sleeve

COURTESY : NIKKEI ASIA REVIEW (LINK TO ORIGINAL ARTICLE)

"Trade wars are good, and easy to win." So claims Donald Trump. Interesting, then, to look at how China's Xi Jinping is proving the U.S. president wrong on both accounts. Folowing is a list of things that China could do and/or already doing to make the US suffer

Devalue Yuan : Make its exports cheap

There are many ways for China to hit back. Xi Jinping could devalue the yuan to boost China Inc.'s export potential. By devaluing yuan, China can make its exports cheaper for the whole world. Further, Beijing could offer preferential market access to Asia and Europe and the gain of Asian and European competitors could be the loss for American companies. 

Increase Regulation of US producers in China 

China could add new layers of bureaucratic controls for companies producing in China, including Apple. These new rules and regulations could increase costs for American companies like Apple and make their prices high or profits lower. For an example licenses new factories could be harder to come by and factory inspections more frequent. 

Delay approvals for cross-border deals American companies need for their M & A strategies

Another way China could punish US companies is by delaying approvals for critical mergers and acquisitions. For an example  US technology giant Qualcomm's multiyear effort to buy Dutch chipmaker NXP Semiconductors for $44 billion has now become collateral damage in the Trump vs. China trade war. China is one of several jurisdictions that needs to approve the complex Qualcomm bid to buy NXP. Analysts claim that Beijing's repeated refusal to grant the needed approvals is a subtle way of showing US companies what China can do.

Stop Chinese hot start-ups from listing in US based exchanges

Beijing could stop the flow of hot  startups listing on U.S. exchanges. Since March, when Trump ratcheted up the tariff talk, the pipeline of big Chinese initial public offerings on which Americans love to gorge has been drying up. Wall Street's loss could be Hong Kong's gain as  these Chinese start-up will start IPOing elsewhere.

Stop buying American debt

Earlier this year, Beijing began hinting at slowing down, or stopping altogether, U.S. debt purchases. China is the biggest holder of Treasury notes and bonds, with just under $1.2 trillion. To finance the biggest tax stimulus in decades, Washington is relying on its Asian bankers. If China boycotted the next few Treasury debt auctions, or dumped large blocks of holdings, markets would panic. Other top financiers such as Japan, Taiwan, India and Singapore might run for the exits, too.