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Biden says US not seeking conflict with China, despite balloon flap and trade deficit
Biden says US not seeking conflict with China, despite balloon flap and trade deficit
By Shaun TANDON
Washington (AFP) Feb 9, 2023

President Joe Biden said Wednesday the United States is not looking for conflict with China despite heightened tensions over last week's downing of a Chinese balloon that US officials say was part of a spy fleet spanning five continents.

"We're going to compete fully with China, but... we're not looking for conflict -- and that's been the case so far," he said in a televised interview with PBS.

Pointing to global ramifications of the balloon incident that has animated the United States, Secretary of State Antony Blinken said earlier that the United States was giving data to allies as it assesses recovered debris.

"We already shared information with dozens of countries around the world, both from Washington and through our embassies," Blinken said.

"We're doing so because the United States was not the only target of this broader program, which has violated the sovereignty of countries across five continents," he told a joint news conference with NATO chief Jens Stoltenberg.

White House Press Secretary Karine Jean-Pierre, speaking separately to reporters on Air Force One, described the balloons as part of a fleet and said they had been spotted around the world for several years.

A huge white balloon carrying sophisticated equipment traversed the continental United States last week before Biden ordered the military to shoot it down just off the east coast in the Atlantic.

China insists that the balloon was merely conducting weather research, but the Pentagon described it as a high-tech spying operation. The balloon floated at an altitude far higher than most airplanes and crossed directly over at least one sensitive US military site.

- 'Pattern' by China -

The NATO secretary-general, whose visit to Washington followed a trip to Japan and South Korea, said the balloon showed the need for countries across the alliance to protect themselves.

"The Chinese balloon over the United States confirms a pattern of Chinese behavior where we see that China over the last years has invested heavily in new military capabilities," Stoltenberg said.

"We've also seen increased Chinese intelligence activities in Europe. They use satellites, they use cyber and, as we've seen over the United States, also balloons. So we just have to be vigilant," he said.

Stoltenberg also issued a new warning that China was drawing lessons from the war in Ukraine, which NATO countries have been supporting as it fights back Russian invaders.

"What happens in Europe today could happen in Asia tomorrow," Stoltenberg said, pointing to China's pressure on Taiwan, the self-governing democracy claimed by Beijing.

The Washington Post, quoting US officials, reported that the Chinese surveillance program has been run partly out of the southern island of Hainan.

Updating old technology, the balloons have been used to monitor the military assets of nearby rivals such as Japan, India and Taiwan, the newspaper said.

Biden, in his State of the Union address on Tuesday, said that his orders to shoot down the balloon showed that the United States would not hesitate to act when needed.

But he also stressed that the United States did not want conflict with China. The balloon episode led Blinken to postpone a trip to China in which he had hoped to work at easing tensions.

China, which voiced regret about the air intrusion but later denounced the US decision to down it, responded to Biden that it would also "firmly defend" its interests.

US officials said they took measures to prevent the balloon's instruments from collecting confidential information during its flight.

They say that the decision to wait until the balloon reached water was the only way to ensure the safety of people on the ground.

Biden's Republican rivals say he should have ordered the balloon to be destroyed as soon as it was identified.

US trade deficit widens in 2022 to record on strong imports
Washington (AFP) Feb 7, 2023 - The US trade gap widened to a record in 2022, though expanding less than expected in December, government data said Tuesday, capping off the year on robust imports and strong spending.

The overall trade gap grew $103.0 billion from 2021 to $948.1 billion last year, Commerce Department data showed, on a surge in goods imports ranging from crude oil to consumer items including pharmaceuticals and household products.

This marks the biggest deficit dating back to 1960, according to government data.

Analysts note that trade has been a swing factor in GDP growth over the last year, bogging it down in the early months of 2022 but providing a boost later on.

In December, the trade deficit expanded $6.4 billion to $67.4 billion, said the Commerce Department.

US imports rose $4.2 billion from November to December, hitting $317.6 billion on greater spending on consumer goods such as cell phones and other household goods as well as automotive vehicles.

Exports slipped $2.2 billion to $250.2 billion in December, dragged by a fall in exports of goods such as industrial supplies and materials.

The latest figures come as households shift more spending to services instead of goods, with consumers grappling with persistently high inflation.

The goods trade deficit with China widened by $29.4 billion to $382.9 billion in 2022, also a record.

And the past year marked the first time since 2019 that the United States imported more goods from the European Union than China.

But analysts have noted that the numbers are affected by Beijing's strict virus controls and coronavirus outbreaks, which hit its economy last year, and an uptick in commercial activity elsewhere as countries bounced back from the pandemic.

- Reduced demand -

"Net trade has been a significant swing factor in headline GDP growth over the past year," said Ian Shepherdson, chief economist of Pantheon Macroeconomics in a recent note.

"It depressed growth in the first quarter of 2022 as an inventory-rebuilding frenzy by wholesalers and retailers led to a surge in imports," he said.

Trade provided a boost in the subsequent quarters as the surge unwound, but he added that similarly large swings in 2023 "are unlikely."

Matthew Martin of Oxford Economics added that the economy displayed solid growth in the fourth quarter.

But "underlying data points to softening activity, particularly for the world's major trade routes which have seen reduced demand from retailers and consumers," he warned.

He added that imports and exports of industrial supplies and materials slipped in December, confirming the manufacturing sector weakened towards year-end.

Rubeela Farooqi, chief US economist of High Frequency Economics, said that trade flows have "slowed recently on a shift in demand for services from goods and weaker global growth."

"But better growth prospects in the US and abroad could provide support over coming months," she said.

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