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On November 30, people who are concerned about the Sino-US trade war will surely notice such a photo-a small episode of the G20 Argentina summit: Trump in the second row smiled and held Xi Da's shoulders in the first row with both hands, with an intimate posture, Xi Da's mouth rising sharply and smiling, his expression relaxed, and the overall atmosphere of the photo was relaxed and harmonious.


The editor believes that at least from the mood reflected in the picture, China and the United States are participating in the G20 summit with a positive attitude to solve the problem, and there is a high probability that some form of agreement will be reached. Although a comprehensive handshake of the trade war is unlikely, it is more in the best interests of the two countries to stop temporarily.


The G20 meeting provided a time node for the easing of the Sino-US trade dispute. The leaders of the two countries met and consulted to provide an opportunity for the future easing of the Sino-US trade dispute. Note that we are talking about the easing of the Sino-US trade dispute, not the cessation of the Sino-US trade dispute. The market is relieved that the Sino-US trade dispute can be eased. On November 2, Beijing time, the information and atmosphere of the dinner talks between the leaders of the two countries revealed from State Councilor and Foreign Minister Wang Yi gave the market hope of easing the Sino-US trade dispute.


Trade War between the Two States: A Game of Killing One Thousand Enemies and Losses Eight Hundred


Under the thinking of "America First", Trump has created an increasingly tight world. However, the trade war is not unilateral, but a game process of killing one thousand enemies and damaging one hundred.


As a result of economic globalization, the trade war is not only China, once the original international economic and financial order is disrupted, all countries will be negatively affected, as the initiator of the United States will be more hurt, Trump or will taste what is called "lifting a stone and hitting his own feet 」.


According to foreign media reports, U.S. farmers have suffered heavy losses, underestimated the ability of large customers, and U.S. soybeans may be permanently injured.
When it comes to American farmers, this was a profession that the world envied incomparably. They have large estates and highly modern agricultural machinery, and agriculture is one of the most advantageous industries in the American economy. With a population of just over 0.3 billion in the wider land, American farmers used to trade large amounts of "surplus" agricultural products for large amounts of dollars in the global market, relying on the advantage of the spread between large amounts of agricultural products and the dollar.


Today, however, the good days of easy dollar swaps for American farmers may be ending. A popular American nursery rhyme, Old MacDonald Bankrupt, sings: Old MacDonald had a farm ...... However, things have changed recently, and Old MacDonald is bankrupt.


S. soybeans, for example, is expected to more than double to about 0.955 billion bushels by the end of the year, according to the U.S. Department of Agriculture. There are also some signs that more and more American farmers are having to find "habitat" for soybeans that have nowhere to put them, which seems to be a big problem for the U.S. agricultural economy at the moment.


Reuters reported on November 20 that the price of US soybeans will continue to fall. Although US soybean futures rose slightly on Tuesday, the increase in US soybeans is still limited. In the previous trading day, US soybean futures closed down 2.1 per cent, hitting their lowest point since November 8. A bushel of U.S. soybeans is only $8.71, which is about $2 lower than eight months ago.


Paul Dice, a Mississippi farmer, once said, "You may think it's just a $1-2 drop, but it's a matter of life and death. At the current price, you are losing money and cannot feed your family 」. Fred Yoder, an Ohio soybean and corn farmer, said recently that farmers across the Midwest are facing a "tough time" when "we are uncertain about the future? 」


These signs mean that while US soybean stocks are surging, more and more US farmers may suffer heavy losses, US soybeans may be permanently traumatized, and US farmers may be becoming the biggest losers in the global economic and trade game. The fundamental reason is that American farmers underestimate the ability of Chinese households, the world's largest soybean import market and the largest customer to develop new suppliers.


According to foreign media, in order to prevent the impact of tariffs in January 2019, considering the travel time of shipping, US importers require Chinese exporters to ship in advance. U.S. importers are speeding up the increase in inventory, or maintain full ship status during the year, resulting in a large influx of goods into U.S. ports. In previous years, China was affected by the National Day holiday in October, and the flow of goods slowed down, but this year it increased by 10.2.


Foreign media reports also said that ports in Southern California, Georgia and Virginia reported double-digit percentage growth in imports from September to October, setting a monthly record. Spot (just-in-time contract) freight rates from China to the West Coast of the United States are near a six-year high due to increased demand for transportation.


However, the game of this trade war will inevitably affect China.


The high tariffs imposed by the United States will affect the prices of Chinese products in the United States and reduce the profit margins of Chinese exporters. In order to maintain a competitive price advantage, Chinese exporters will significantly reduce the costs of production, logistics and sales.


S. government study author Benedikt Zoller-Rydzek and Gabriel Felbermayr said a strategic import tax on goods with high import elasticity would shift a large part of the tariff burden on Chinese exporters. "Chinese companies pay about 75% of the tariff burden, and about 37% of Chinese exports to the United States are affected by tariffs. 」


Textile and clothing, furniture, toys, metal products, etc. are China's advantageous export industries to the United States. Take my country's textile and clothing industry as an example.


China is the world's largest exporter of textiles and clothing, at the same time, textile and clothing exports are also an important component of China's trade exports. Textile and clothing exports in China's total foreign trade accounted for about 13% of the level.


China's top five export markets for textiles and clothing are: 17% in the United States, 8% in Japan, 6% in Hong Kong, 5% in Vietnam and 4% in the United Kingdom. Among the top five markets, the United States ranks first.

China's textile and garment exports to the United States occupy the first


In 2017, China's exports to the United States accounted for 15.5 percent of total textile and apparel exports. From the perspective of export structure, clothing exports are the main ones, accounting for 73% in 2017, and textile exports are supplemented by 27%. Considering the relatively diversified textile and apparel trading partners in the United States, and the mature development of the textile and apparel industry, low barriers to entry, Sino-US trade friction will form a significant negative for China's textile and apparel exports.

China and the United States have a huge trade surplus in textile and clothing trade. In 2017, the cumulative trade volume of China's textiles and clothing was 293.15 billion US dollars, of which exports were 268.6 billion US dollars, imports were 24.55 billion US dollars, and the cumulative trade surplus was 244.05 billion US dollars. However, this year, the United States from China's imports of textiles and clothing decreased significantly.


And "the off-season is not light, the peak season is not prosperous" is a very popular word in the textile circle this year. The reporter learned through interviews that the main reason for this phenomenon is that the off-season overdrafts the orders in the peak season in advance. As a result, the off-season production is booming, and the peak season becomes deserted. The fundamental reason is the impact of the Sino-US trade war. Since March, a series of cracks have appeared in Sino US trade, and the degree of tariff increase between the two sides has been escalating.


In order to complete orders before the outbreak of the trade war, a large number of enterprises rush to produce in advance. A large textile company in Shangqiu said: "Due to concerns about the Sino-US trade war and tax increases, companies are desperately rushing to produce orders. The off-season from May to August is not weak, cotton yarn orders are very good, and cloth factories are also rushing to order in advance. As a result, the inventory of the industrial chain has increased and late orders have been overdrawn in advance 」. Due to the slow sales of cotton cloth and the increase in inventory, some machinery and equipment in the weaving workshop of an enterprise in Henan have been discontinued.


Among the companies contacted by the reporter, without exception, they all mentioned that the poor sales in the second half of the year had a lot to do with the Sino-US trade war. It can even be said that the Sino-US trade issue may be the last straw to crush textile companies in the future. All the enterprises interviewed said that if Sino US trade continues to deteriorate, the future of textile enterprises will only be more difficult. If the facts are indeed as textile enterprises said, it will be more difficult for textile and garment trade enterprises to export directly.


The most important thing is that the negative impact of Sino-US trade will also directly affect the capital flow of enterprises. As a heavy capital industry, textile enterprises have always been troubled by the shortage of funds, especially when the industry is depressed, banks strictly control the loans of small and medium-sized textile enterprises. At present, in some areas of Henan, there has been a situation of bank lending, loan restrictions, for which the relevant functional departments of the Henan government issued a special document prohibiting bank lending. Some enterprises in Nanyang told reporters that in 2016, there were 128 textile mills in Xinye County, and currently only more than 20 are in normal production. Except for 3 large enterprises, the other scales are thousands of spindles and 10,000 spindles. Some have closed down and some have relocated. It is quite difficult for enterprises to survive. Banks either raise lending conditions in disguise, improve the creditworthiness of enterprises, or restrict corporate lending through interest rates.


Short-term bulk raw material prices may rebound, but there is still uncertainty about the easing of the Sino-US trade dispute.


The so-called detente in the current Sino-US trade dispute is that the leaders of the two countries only express their intention to detente, and there is no clear agreement document yet. For a businessman president like Trump, such a detente is still relatively fragile. In the absence of definite information to ease the trade dispute, enterprises dare not rashly accept cross-year orders, thus affecting the demand for replenishment, and the price of raw materials is also difficult to improve in the future. Therefore, the meeting between the leaders of the G20 and the G20 may lead to a rebound in domestic commodity prices, but part of the reason is the release of long-suppressed emotions, which will be affected by the substantive negotiation process.