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02.08.201801:41 Forex Analysis & Reviews: The United States is preparing an announcement to China of the Cold War

Long-term review

The United States is preparing an announcement to China regarding the Cold War.

The US Congress is preparing to adopt a new law on defense (National Defense Authorization Act) for $ 716 billion a year.

According to congressmen, this time the law on defense will be clearly directed against China. Congressmen point to such threats from China: aggressive actions in the South China Sea, theft of advanced technologies in the US, and propaganda of "communist ideas" in the United States. As a threat along with China, congressmen mentioned Russia.

After the actions of the Trump Administration against China in trade, support for anti-Chinese actions in both major US parties is growing.

The US National Defense Strategy for 2018 (unclassified part) points to the main threat to the United States - the resumption of global rivalry for world leadership (as it was before the collapse of the USSR in 1991 - Makarov's comment). The document says that China is carrying out an intensified military modernization and an aggressive economic policy while striving to expand the sphere of influence to subordinate the regions of the Indian and Pacific Ocean economically. Previously, the United States said that they would not allow one country to dominate the region - an explicit statement against China.

The new law on defense requires a sharp toughening of China's access to advanced US technologies. This can affect a large number of US companies manufacturing their devices in China.

The bill requires limiting the influence of Chinese propaganda on the American media, cultural institutions, academic institutions, and business.

All this together is very similar to the attitude of the US to the USSR in the midst of the Cold War.

Conclusion: The US this law is ready to officially start a cold war with China.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Jozef Kovach,
Analytical expert of InstaForex
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