Is the US economy in isolation?

US economy

At the same time as China and the United States have increased trade disputes, a series of financial and economic agreements between the two countries have been signed during the Japanese Prime Minister’s visit to China.

At the end of the talks between Shinzo Abe and Li Keqiang, Prime Ministers of Japan and China, the two sides signed a series of deal and trade agreements, including a mechanism for the direct exchange of foreign currency between the two countries. According to the agreement, China and Japan can make up to $ 30 billion in exchange for the national currency of Japan (Yen) and the national currency of China (Yuan).

Abe, after meeting with the Chinese prime minister, said: today, China-Japan relations have shifted from competing to co-existence, and our bilateral relationship has entered a new phase. The Chinese prime minister and I are in the process of moving forward with our new relationship. Major Japanese companies expect to more effectively enter China’s markets and compete with Western companies by improving China’s attitude toward the country. Other agreements between the two countries include expanding cooperation on customs facilities and trading in each other’s equity markets.

During the Abe visit to Beijing, political issues in the region, including the denuclearizing of the Korean peninsula, were also examined. While China is the closest North Korean ally, over the past decades, the North Korean government saw Japan as the main United States ally in the region and one of its main enemies. Despite the process of improving relations between North Korea and the United States, the North Korean official media are still criticizing the actions and statements of the Japanese authorities.

The Prime Minister of Japan, at a joint press conference with his Chinese counterpart, said: “Our two great countries have major responsibility for achieving peace and stability in the region.” He said the Chinese side is keen on cooperating with Japan to return the relationship to the normal course and develop stable and positive relations.

The two countries’ television and news networks have stated that the warming of relations between the two countries is precisely what they are doing against the United States, which has put a lot of pressure on both sides, especially in China. They know that the US government wants to create disagreement between countries, but Abe’s visit to China can change these conditions.

Chinese TV also shows that the flags of the two countries are flooded in Tiananmen Square, in central Beijing, and have armed forces secure the area, where Xi Jin Ping and Shinzo Abe met.

Since 1972, the two sides have had a formal relationship, they have had a relationship full of ups and downs, and especially since 2012, with rising disputes over the East Sea divisions and ownership of the islands of the region, the relations have been very fragile, and this trip can be a fundamental change in Relationships.

For many years, the Chinese government has tried to establish close business ties with the United States, and Japan, on the other hand, relying on Washington to curtail China’s economic, political and military power, but now both countries are in a state of conflict with the United States, and this situation make them closer to each other.

The signing of trade agreements between the two countries is reported while the Donald Trump government’s policy, has sought to curtail imports from the country and accuse China of unfair practices against imports from the United States to worry about a trade conflict between the two countries.

The prime ministries of China and Japan described the agreement as a landmark in the relationship between the two major Asian economies. Abe’s three-day trip to Beijing has been the first contact in the highest-ranked government offices in the past seven years. During this time, the differences between the two countries on the island ownership of the South China Sea caused cold relations.

With the implementation of the contract, Shinzo Abe and Shi Jingping seem to be taking a long step towards abandoning the dollar on foreign exchange transactions and trading their national currency, a step that both countries have called it a “historic milestone.”

Now, it seems, in fact, this is just one step in the direction that large economies in Asia and Europe take to establish independence from the dollar-based global system. A bigger step is taking place around an international effort to circumvent US sanctions against Iran, the sanctions that US President Donald Trump once again reaffirmed on Thursday November 4, and emphasized: “sanctions on Iran will be operational on November 5. Any sanctions we had initially imposed and would have been canceled due to a nuclear deal will return. The sanctions will be accompanied by new sanctions to address a wider range of Iranian behaviors. ”

The European Union, which has long been involved in an unwanted US-led trade conflict, is preparing itself to create a special payment channel for Iran. The channel, which was High Representative of the European Union for Foreign Affairs and Security Policy, Federica Mogherini, on the second day of October after meeting with representatives of the United Kingdom, France, China, Russia, Germany and Iran on the sidelines of the United Nations General Assembly in New York, announced the decision to design it, and some days later said that this special system, called SPV “Special Purpose Vehicle” and “before the month of November “, that is, the date of the US sanctions will be operational.

On the other hand, Russia’s ambassador to the European Union headquarters in Brussels, Vladimir  Chizhov, said in a speech to Russia’s television network on Thursday that Europeans from has also invited Russia and China to join special banking system to circumvent US sanctions against Iran.

“The European Union intends to invite Russia and China to join in the future mechanism to replace Iran’s Swift World Payments system to circumvent US sanctions,” said Chizhov. Although this special system is about sanctions against Iran, But as the Russian ambassador said in Brussels, after the system was initially launched, it will open in the near future for a wider range of parties.

According to the Russian ambassador, keeping the trade relationship with Iran is a priority of EU programs, and the creation of a special mechanism for conducting transactions to circumvent sanctions is at the highest level. The response of Russia and China to the request of Europe is still unknown, but the likelihood that they will welcome the idea of joining such a mechanism is very high.


Please enter your comment!
Please enter your name here