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China releases white paper on US trade relations

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The State Council Information Office of China yesterday released a comprehensive white paper titled “China’s Position on Certain Issues in China-US Economic and Trade Relations,” outlining its official position on ongoing trade disputes with Washington.

The white paper addresses the nature of economic relations between the two countries, the implementation of the Phase One Trade Agreement, compliance with World Trade Organization (WTO) rules, and unilateral policies of the US.

In the introduction, Beijing stated that China and the US are the world’s largest developing and developed countries, respectively, emphasizing that economic and trade relations between the two are of great importance for both bilateral and global stability and development.

It noted that since the establishment of diplomatic relations in 1979, bilateral trade volume has increased from $2.5 billion to approximately $688.3 billion in 2024.

The white paper stated that the foundation of China-US economic and trade relations lies in the understanding of “mutual benefit and win-win.”

It was noted that the two countries are important trading partners for each other, with rapidly increasing trade in goods and services.

China is the US’s largest goods export market and second-largest source of imports; the US is China’s third-largest export market and second-largest source of imports.

Beijing argued that it does not pursue a trade surplus, and that the trade balance is a result of structural problems in the US economy, the comparative advantages of the two countries, and the international division of labor.

It was reported that when local sales through trade in goods, trade in services, and investments are considered together, the economic benefits obtained by the two countries are roughly balanced.

Additionally, it was stated that China is taking active steps to increase imports through platforms such as the China International Import Expo (CIIE).

The white paper gave extensive coverage to the Phase One Trade Agreement signed on January 15, 2020.

It was argued that the Chinese side has meticulously fulfilled its obligations under the agreement, despite challenges such as the COVID-19 pandemic, supply chain disruptions, and global economic recession.

In this context, it was stated that intellectual property protection has been strengthened, market access has been increased in the agricultural and food products and financial services sectors, and forced technology transfer has been prohibited.

In contrast, it was pointed out that the US side has not fulfilled its obligations under the agreement.

According to the white paper, Washington, contrary to the spirit of the agreement, tightened export controls, increased sanctions against Chinese companies, and imposed investment restrictions.

In particular, regarding technology transfer, it was argued that the US, as in the case of TikTok, is forcing companies to sell and preventing investment cooperation under the pretext of “national security.”

In the field of agriculture, it was stated that the US has not recognized China’s avian influenza-free zone status and has not responded to requests for cooperation on pesticides.

It was also claimed that the US has engaged in restrictive and discriminatory practices in financial services and exchange rate issues.

In addition, Beijing emphasized that since joining the WTO in 2001, it has adhered to the principle of free trade and has strictly complied with WTO rules.

It was stated that in this process, more than 2,300 central laws, regulations, and rules, and more than 190,000 local regulations have been reviewed and revised.

It was stated that customs duty rates have been reduced in line with WTO commitments and have even been further reduced unilaterally in recent years.

It was argued that subsidies are provided within the framework of WTO rules and within reasonable limits, and that relevant notifications are made in a timely manner.

The white paper stated that accusations that China creates “overcapacity” and disrupts international markets with “non-market economic behaviors” such as subsidies are “irrational and untrue.”

It was emphasized that such claims are trade protectionism and will harm global supply chains.

On the other hand, it was noted that China is constantly improving its business environment, expanding market access for foreign investments, and treating all domestic and foreign businesses equally.

A significant part of the white paper was devoted to criticizing the US’s unilateral and protectionist policies. It was stated that Washington arbitrarily expanded the concept of “national security,” used export controls as a political weapon (especially in the fields of semiconductors and artificial intelligence), and applied Section 301 and Section 232 customs duties that clearly violate WTO rules.

It was pointed out that the WTO panel found Section 301 tariffs to be against the rules. It was noted that these tariffs did not solve the US trade deficit, but rather increased costs for US importers and consumers.

Similarly, it was stated that Section 232 tariffs applied to steel and aluminum products were used not for “national security” reasons, but to put pressure on other countries in negotiations.

It was warned that US attempts to remove China’s Permanent Normal Trade Relations (PNTR) status violate WTO rules and would seriously damage bilateral relations.

It was stated that using the fentanyl issue as an excuse to increase customs duties is baseless and will not solve the problem.

Finally, it was pointed out that the “reciprocal customs duties” implemented by the US will harm both the US economy and global trade.

In the conclusion of the white paper, it was reiterated that China and the US are the world’s two largest economies and that cooperation between them is critical for global peace and development.

It was emphasized that it is natural for the two countries to have differences, but these should be resolved through equal dialogue and mutually beneficial cooperation rather than conflict.

Beijing, using the expressions “There are no winners in trade wars, and protectionism is a dead end,” called on the US side to move in the same direction as China, and to act in accordance with the principles of mutual respect, peaceful coexistence, and win-win cooperation.

It was stated that the two countries can address their concerns through dialogue and jointly promote the healthy, stable, and sustainable development of bilateral economic and trade relations.

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Pentagon plans covert spy ring for economic war on China, report says

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The US Department of War (Pentagon) is reportedly planning to establish an extensive network of deep-cover agents to wage economic warfare against China and other adversaries of the US.

According to a report by The Washington Post citing six sources familiar with the initiative, the plan has not yet been put into effect. The newspaper reported that the initiative remains at the planning stage. The Pentagon, however, denies that any such initiative exists.

The report said the operatives would pose as entrepreneurs or private sector employees while concealing their ties to the US government. The network’s mission would be to gather economic intelligence and counter China.

The programme is led by Tom Rakusa, who spent 39 years at the CIA. Rakusa serves as a senior adviser to Deputy Secretary of Defence Steve Feinberg.

The proposed spy network is seen as part of a broader policy by the Donald Trump administration to sharpen economic competition with other countries.

The US is already resorting to tariffs, export controls, and investment in strategic sectors, alongside expanding its economic intelligence gathering.

According to The Washington Post, the new initiative demonstrates the Pentagon’s growing influence under the Trump administration. The department is currently seeking a record budget of $1.5 trillion.

Trade war flares up again with Trump’s return to the White House

The trade friction between the US and China flared up again following Donald Trump’s return to the White House. In April 2025, Washington raised tariffs on Chinese goods to as much as 145%, and Beijing retaliated with tariffs of up to 125%.

In May, US Secretary of State Marco Rubio described China as the primary geopolitical challenge facing Washington. Rubio said that to avoid war, the two sides needed to manage their conflict of interests.

In July, Chinese expert Zheng Yongnian did not simply warn that underestimating the US could prove to be a “fatal mistake”; he stated it explicitly.

According to Zheng’s assessment, the US maintains its primacy through the role of the dollar, its military superiority, and its technological advantages.

Even so, the two sides agreed in June to declare a truce and lower tariffs. In autumn 2026, the US and China extended their trade truce until 10 January 2027.

US Treasury Secretary Scott Bessent said the extension would give the parties more time to discuss economic issues.

Trade deals do not eliminate the strategic contradictions between the two countries. Financial Times columnist Rana Foroohar likened the race between the two nations for commercial, technological, and geopolitical influence to the 19th-century “Great Game” between the Russian and British empires.

Foroohar cited China’s standing in shipbuilding and commercial maritime transport, as well as its expanding footprint in overseas ports, among its key advantages.

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Japan plans curbs on short-term home sales to cool urban prices

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Japan’s ruling Liberal Democratic Party (LDP) plans to restrict short-term property trading to rein in surging home prices in major urban centres, particularly Tokyo.

Led by Prime Minister Sanae Takaichi, the party aims to make support for working households a core priority ahead of local elections scheduled for April next year.

The LDP’s research commission on housing and land policy met on Wednesday to discuss the issue.

According to a report by the Nikkei Asia newspaper, Commission Chair and LDP lawmaker Midori Matsushima said at the opening of the meeting: “Prices of newly built condominiums across Tokyo’s 23 wards have doubled over the past decade. We must work on measures ensuring that people who wish to live in these homes can actually afford to buy them.”

Homeownership in the capital has become virtually unattainable for broad segments of the population. According to data from the Real Estate Economic Institute, the average sale price of a newly built condominium in Tokyo’s 23 wards rose %18.5 in fiscal 2025 compared with the previous year, reaching 137.84 million yen (around $872,000).

Meanwhile, statistics from the Ministry of Labour show that the average annual income of a full-time worker in the capital remained at 6.78 million yen in fiscal 2025. This widening gap between incomes and residential property prices is directly shaping political priorities.

During its campaign for the House of Representatives election in February, the LDP pledged to curb speculative transactions across metropolitan Tokyo and other regions. Earlier this month, a party project team focused on policies concerning foreign nationals also submitted a recommendation urging the government to introduce immediate tax measures against rising home prices.

Under current legislation, profits realized from properties sold within five years of acquisition are classified as “short-term capital gains”. These returns face a tax rate approaching %40, including income tax and local inhabitant tax.

Although this rate is twice the approximately %20 levied as “long-term capital gains” tax on properties held for more than five years, several party members argue it remains insufficient to deter speculation. Calls to tighten the framework may be considered as part of the annual tax reform package to be drafted in December alongside the LDP’s coalition partner, the Japan Innovation Party.

The ruling bloc wants to present concrete housing pledges to voters heading to the polls in April across numerous urban centres, including 22 of Tokyo’s wards where local assembly terms expire.

“We need to support families with children, who are typically at the stage of purchasing a home,” a senior LDP official said.

Opposition parties are also preparing alternative proposals that target not only prospective homebuyers, but also residents forced into the rental market by high property prices and now affected by escalating rents.

Tax steps take precedence over limits on foreign buyers

Several countries seeking answers to housing affordability pressures have imposed direct restrictions on foreign purchasers. In South Korea, real estate policies played a major part in the declining public approval ratings of President Lee Jae Myung.

In August 2025, authorities in Seoul introduced an approval requirement for foreign nationals buying homes in the capital and adjacent areas, while also mandating that buyers reside in the properties for at least two years.

Canada and Australia have enacted temporary bans on foreign residential purchases, while Singapore levies a %60 additional stamp duty on foreign buyers.

The role of overseas investors in Japan’s property market also drew debate during the February election. However, restrictions aimed directly at foreign nationals are viewed as potentially conflicting with international trade and services agreements.

Consequently, rather than imposing restrictions based on the nationality of buyers, the government is discussing tax measures aimed at speculative real estate deals, such as rapid resales.

Fears that sharp market measures could shake regional banks

Concerns have also surfaced that aggressive steps to force down prices could harm the wider national economy.

A senior LDP tax official cautioned that a steep drop in land prices could weaken local financial institutions, warning: “We must consider the impact on regional banks.”

The real estate sector accounts for roughly %18 of total lending by Japanese banks. This proportion sits well above the %10 level recorded during Japan’s bubble economy of the mid-to-late 1980s.

At certain regional banks, property lending accounts for nearly half of total loan portfolios.

According to March 2025 data from the Financial Services Agency, approximately one-quarter of all loans extended by regional banks to the real estate sector are concentrated directly in Tokyo’s five central wards.

Buoyant asset valuations, supported in part by rising stock indices, have underpinned strong public approval for the Takaichi administration. Observers note that property interventions designed to cool the market could drag down equity prices and weaken the government’s standing.

A senior official on the LDP research commission stressed that decision-makers must act with caution regarding the scope and timing of any measures intended to bring price increases under control.

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South Korea plans $120B spend on eight US nuclear power plants

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South Korea will spend $120 billion to construct eight nuclear power plants in the US under an agreement that provides for $350 billion in investments in exchange for lower tariffs.

The South Korean government also announced that Seoul and Washington will begin examining a liquefied natural gas (LNG) project in Alaska comprising a large-scale pipeline to transport natural gas from the north of the state to the south, alongside the construction of an LNG terminal for exports overseas.

Seoul stated that a decision regarding the LNG project will be made following a commercial feasibility study. However, US President Donald Trump said that South Korea would invest $54 billion in the project, pointing to an apparent lack of full coordination between the two sides on the matter.

Trade and Industry Minister Kim Jung-kwan said in a statement: “This announcement opens a new horizon of cooperation where the two countries join forces to develop joint commercial ventures in strategic areas directly linked to economic security and future sectors such as artificial intelligence, nuclear energy, and LNG.”

“We will adhere to the principle of prioritising national interests and investing solely in commercially viable projects,” Kim said.

Speaking at the White House, Trump characterised South Korea’s plans as “one of the largest energy infrastructure investments in American history”.

The announcement followed a meeting between Trump and South Korean President Lee Jae Myung roughly one year ago at the APEC Economic Leaders’ Meeting held in South Korea, where they agreed on the creation of a $350 billion investment fund.

Under that agreement, $150 billion was allocated to the shipbuilding sector and $200 billion to other sectors. In return, the US announced it would reduce tariffs imposed on goods imported from South Korea from 25% to 15%.

Under the nuclear power project, South Korea’s state-controlled utility will build two plants in the US, while Pennsylvania-based Westinghouse Electric will construct six plants.

According to the South Korean government, this will mark the first instance in which a foreign country builds its own nuclear power plants in the US.

South Korean firms are also evaluating the possibility of acquiring a stake in Westinghouse as part of negotiations over sharing profits generated by the project.

South Korea additionally announced that it will build a $22.3 billion natural gas-fired power plant in Texas with a capacity of 6,472 megawatts.

The facility will be designed to supply electricity directly to nearby data centres. The project’s first phase is targeted to begin commercial operations in 2029, with full-capacity operations slated for 2032.

Seoul also disclosed that it had agreed to allow the US to receive 50% of the profits generated by the projects until South Korea recoups all of its investments.

After South Korea fully recovers its total investment amount, 90% of the profits will go to the US.

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