Increased tension between US and China, know what will be the effect on the world economy

Beijing: America and China are the countries with the largest economy in the world. Both spend more on their army than any other country. There is fierce competition between the two in the race to build high-tech chips and control the oceans. The current situation between America and China can now affect the whole world. The US Embassy in Chengdu, southwestern China, was closed on Monday amid recent diplomatic clashes, while the US last week ordered the closure of its Houston-based Chinese Counsel.

As the stirring of the presidential election campaign is increasing in America, there is a discussion of the worsening situation only about China. The most talked about is the situation on the economic front.

Where will stress affect?
Both countries have lost their lot due to tariff war. The tariff war began in 2018 during Beijing’s technical ambitions and trade surplus. Since then, no permanent solution has been found so far. At the same time, the corona epidemic has also put tremendous pressure on the sluggish global economy before the fears of tariff war.

America is the largest export market in China. This situation did not change even after the increase in tariffs on President Trump’s Chinese product. At the same time, China is the number three market exporter for America. That is, America and China are the biggest markets for each other, with the interests of investors of both countries connected. From the American company General Motors to Burger King, there is an economic connection with China, while the products of agriculture, and other producing companies in America are in great demand in China. But the business of these companies declined by 11.4 percent last year due to tariff war. According to the US-China Business Council, the ongoing tensions between the two countries have also affected the employment sector. According to experts, worse conditions are being created since 2017.

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China is a major export market for Iowa and other US agricultural products, and this was impacted when Beijing stopped importing soybeans and increased tariffs on other US products, including pork.

Soybeans were exported to Brazil and Argentina in the first phase of the tariff war, although China started buying cheap beans from the US, which led to a ceasefire on the economic front in January.

But if both of them do not settle their business differences, then not only their exporters but also the economy of other Asian countries will be affected. Because in most countries of Asia, the raw material for trade comes from China. The interests of telecom, computer, medical and other technology companies in the US and China and their market interests are interlinked. Apple, Dell, Hewlett-Packard and other companies rely on activities in Chinese factories. Smartphones, computers and other electronic products are almost entirely dependent on China. The factories supply chip and other equipment to the US, Japan, Taiwan and Europe.

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The biggest impact, at least on the electronic market, came when the Trump administration introduced sanctions questioning the business model of tech giant Huawei, and in the aftermath of the situation, other industrial houses, including Silicon Valley companies, received billions of dollars. Had to bear the loss of

At the same time, China is an important market for Apple and other American tech brands, which has given a tough competition to American tech companies in recent years. Especially in making smartphones, medical devices and other products, he went ahead of America.

America is the most suitable market for the world’s most expensive products made in China, but now Beijing is now asking its investors to look at other markets where they can sell their goods without loss. But many people believe that Asian countries and European markets also cannot become an alternative to America for selling expensive products.

Ever since the US has stepped up its military intervention in the Pacific, China has accumulated aircraft carriers and missiles in the name of protecting its interests here so that it can somehow maintain its reign in the region. At the same time, tensions are increasing in the South China Sea, this is the sea route on which it is not ready to accept the decision of even an international court to assert its property with a large trade center. He wants to take away the rights of many small countries from this region.

In 2018, a Chinese Destroyer came very close to the US warship (USS Decatur). At that time, the Navy of both countries called it an unsafe and irresponsible action in the South-China Sea region. Similarly, in 2001, a Chinese fighter plane collided with a US surveillance aircraft over the South-China Sea, while at the same time an American aircraft had to make an emergency landing on Chinese Iceland.

Taiwan is also a major cause of tension between the two countries, China considers it its territory and talks about taking control of it by using force when needed. But the US stands as the slope of Taiwan and has been providing all kinds of military support to it. The US has become more active in Taiwan during the Trump administration. Taiwan’s foreign minister said last week that Chinese aircraft are constantly violating his collusion. At the same time, Washington has been rejecting China’s claim from the South China Sea for a long time.


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