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Showing posts with label Trade. Show all posts
Showing posts with label Trade. Show all posts

Monday 17 August 2020

Global connection, disconnection, reconnection

In four separate speeches, Secretary of State Pompeo (pic), Attorney General Barr, National Security Adviser O’Brien and FBI Director Wray laid out their case for containing China. But do the US Gang of Four’s analyses of containment of China make global sense?
https://youtu.be/DPt-zXn05ac

This is the age of disconnection. What Covid-19 has done is to show up all the flaws of global connectivity.

The virus travels with human beings and forces us to have periodic lockdowns that disconnects the transmission, buying time to bring it under control. Commenting on the pandemic, US Foreign Affairs magazine laments not only the US failure to prepare, but also the failure to contain: “what is killing us is not connection, it is connection without cooperation.” Touché!

Globalisation was the great connector, created by the unipolar order which saw free trade as beneficial not just to the world, but mostly to itself. But the shift to a multi-polar order made America insecure and everyone else unsure.

A wounded Alpha is always dangerous, emotionally hurt and lashing out on perceived rivals. China as number two falls into that category.

In four separate speeches, Secretary of State Pompeo, Attorney General Barr, National Security Adviser O’Brien and FBI Director Wray laid out their case for containing China. But do the US Gang of Four’s analyses of containment of China make global sense?

Beating the drums of war, decoupling trade and splintering the Internet into a “Clean Net” may sound great for domestic politics, but no one in their right mind can support a nuclear arms race in the midst of a growing global pandemic and possibly the worst economic depression since the 1930s.

The global free trade bargain is very simple - free trade is win-win for all trading partners, but each country must deal with the unequal distribution of trade benefits within its own borders - all about domestic politics.

Disconnecting global trade and free flow of information only increases costs for all, reducing the resources to deal with domestic inequalities.Worse, any arms race is lose-lose for all, diverting scarce resources from fighting pandemics, climate warming and domestic injustices.

History is the best guide to understanding how we got into the mess today.

The story on US politics and economics is well told, but the China story is often undertold. Because of China’s rapid growth from poverty to world number two in 40 years, most historians are still at a loss to explain what this implies for the world as a whole. NUS East Asia Institute Professor Wang Gungwu in his marvelous new book: “China Reconnects (2019)” has given us a clear and easily readable sweep of China’s history and her search to reconnect with the outside world.

Professor Wang has condensed global history into three key centres of power: Mediterranean, India and China.

In 1500, China and India accounted for 48.6% of world population and 49.2% of world GDP (OECD). The Mediterranean powers (broadly including all Western Europe and West Asia) amounted to 17.1% and 22% of population and GDP respectively.

But it was naval power, science and technology that enabled the Western swerve to global dominance, so by 1950, China and India together accounted for 16.3% of world GDP, but 35.9% of the population. Western Europe and USA plus Western offshoots accounted for 19.1% of global population, but 56.8% of world GDP.

This neglect of maritime power caused India to be colonized by the 18th century, and China nearly gobbled up by the 19th century.

China’s engagement with the world was mostly through the Silk Road, with Indian Buddhism being the major foreign cultural influence on China. The Silk Road flourished during the Tang Dynasty (618-907 AD), but the Mongol empire in the 13th-14th century connected China not only to Europe, but also to Mughal India.

However, the arrival of Western traders through South-East Asia after 1500 accelerated China’s trade with the West (including cross-Pacific trade with Latin America through Manila). Only in the 20th century did China begin to appreciate that the key instruments of Western power came from maritime power and ability to enforce international law.

In Chapter 2 of “Behind the Dream, ” Professor Wang skillfully weaves the story of post-dynastic China, when Chinese intellectuals struggled to understand modernity. It was the Japanese invasion that sparked Chinese nationalism, culminating in the civil war that enabled the Communists to unite the country with the founding of the People’s Republic in 1949.

The story of Chairman Mao, Deng Xiaoping and the policy choices of President Xi Jinping is told with verve and deep insight, without the usual Western baggage of seeing personalities in black and white.

China’s admiration for the West is defined in Chinese names for the leading powers – heroic England, beautiful America, legal France and virtuous Germany. Hence, the reforms in the last 40 years were all about reconnecting to the West through trade, investment, technology and people. But as China became deeply entangled in globalisation as the world’s largest manufacturer and trading partner, there grew an internal awareness that continued development would have to rely on internal stability and order, as well as external security. Stability was premised on a strong Party, and as Professor Wang put it, “the country’s integrity rests on the capacity to defend its borders even from the world’s sole superpower.”

Professor Wang goes deep into Chinese philosophy and political history to find China’s roots into the new world order.

The book’s real contribution is in explaining China’s shift from the Old World to the New Global. Here, China’s interaction with the South, especially with the Association of Southeast Asian (Asean) countries, will play crucially in the next phase of development of the New Global.

Asean comprises 600 million people and over US$2.5 trillion in GDP, with great cultural diversity, natural resources and a strategic zone that holds the key to global trade between the West, South Asia, China and Northeast Asia. The South China Sea cannot afford to be balkanized because it was Great Power struggles that made the Balkans an unstable region for Europe and the Near East for over a century.

As the US tries to disconnect, China Reconnects is a tour-de-force for us to understand current developments from the lens of philosophy and history. Professor Wang writes with eye-popping clarity, dosed with empathy, to guide us through the fog of uncertainty. Unfortunately, reconnection takes two to play. Whether the next US President will attempt to connect or disconnect will be the question of the century.

Andrew Sheng is a Distinguished Fellow of Fung Global Institute, a global think tank based in Hong Kong.The views expressed here are the writer’s own.

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Tuesday 20 November 2018

‘America First’ undermines multilateralism, Pence's APEC speech offers nothing new

Illustration: Liu Rui/GT

‘America First’ undermines multilateralism


According to media reports, the Asia-Pacific Economic Cooperation (APEC) forum held in Papua New Guinea (PNG) was concluded on Sunday without leaders issuing the traditional communiqué, and PNG will instead issue a formal "chairman's statement," for the first time ever. PNG Prime Minister Peter O'Neill said talks broke down over language about the World Trade Organization (WTO).

The US is a strong advocate for WTO reform. While China has no objection for the necessity of reform, the two powers are widely divided over "what" to reform. The US thinks the WTO doesn't fit the current world economy and needs massive reform, but China hopes reform will focus on dispute settlement mechanisms.

China's view is echoed by most WTO members. But some developed countries have vacillated because they worry that the US, if objected, would exit the WTO and build another platform that it thinks enables fair competition. They also hope to benefit from US moves pressuring developing countries. As a major WTO founder, the US intends to overturn the system and start over again. This invites concerns that Washington would choose to support or abandon any international rule based on whether it serves US interest, bringing a fundamental tumult to international trade system.

"America First" has been deeply embedded in US foreign policy. Washington used to pursue its interest by building a US-led multilateral system, but now it just asks for benefits. Multilateral mechanisms are seeing their authority eroded. This will last for some time until Washington feels what repercussions of the collapse of the international system can bring to it.

Such impact will come sooner or later. Current international system carries Western values, endows a US leadership, supports the dollar as a major international currency and helps the US enhance its grip on international relations so that it can secure its interest easily. Destroying such a system will bring itself huge losses in the long run.

It's delusional of some US elites to think that China is the largest beneficiary of the international system since they mistakenly blame China for the US' own problems. China has realized its development through hard work, not by taking advantage of the international system. Though China's economy has rapidly expanded, it is due to China taking up a lot of work that US society doesn't want to do. A large share of China's foreign exchange that the country earned through toils has been borrowed by the US.

"American First" cannot become "America takes all." The US should give other economies room for further development and take care of its relationship with developing countries. All Western countries need to rethink the meaning of fairness. They can't take their vested interests for granted while hoping the developing countries stay at disadvantaged position forever.

Modifying WTO rules must aim at win-for-all, instead of interest redistribution for a few specific countries. It's impossible for the US to be the only winner. If it blocks the development path of other countries, the US itself will go nowhere either.

The APEC summit this year concluded without issuing a communiqué, but it is not a big deal. The summit between Chinese President Xi Jinping and his US counterpart Donald Trump during the G20 meeting later this month will carry much more weight. It is hoped Washington makes serious preparations for the summit and not pin its hopes on exerting pressure.- Global Times.

Pence's APEC speech offers nothing new

Illustration: Liu Rui/GT

US Vice President Mike Pence aimed bluntly-worded criticism toward China while delivering a speech at the Asia Pacific Economic Cooperation meeting in Papua New Guinea on Saturday. He repeated the US' hardline approach in its trade conflicts with China, reiterated the US' determination of freedom of navigation and criticized China's foreign aid and cooperation with other countries.

Pence is considered the spokesperson for the US' tough position on China. Apparently, he shoulders the responsibility of piling pressure on China before the summit between Chinese President Xi Jinping and US President Donald Trump during the G20 meeting later this month.

But a few hours before Pence said that the US will not back down from its trade disputes with China unless Beijing bows to US demands, Trump told a number of journalists in the White House that he may not impose more tariffs.

Washington has made quite a lot of noise recently, and Pence's speech at APEC barely offers anything new. Pence said that China's assistance drowns recipient countries in a sea of debt and makes them compromise sovereignty, and that the US offers a "better option."

"We don't coerce, corrupt, or compromise your independence. The United States deals openly and fairly," Pence said. In reality, however, the country that does as Pence described is China and the one that jeopardizes the sovereignty of recipient countries is in truth the US.

The most prominent feature of China's international assistance and cooperation is that it comes with no political strings attached. Is there a better way than this to show respect for others' sovereignty? A big problem in the US' relations with developing countries is that Washington often interferes in their internal affairs. In fact, many Western countries have preconditions, mostly political, attached to their assistance, which touches upon the social governance system of developing countries and hence puts them in difficult positions.

Just look at how many times the US has found political fault with China when it comes to economic cooperation, with human rights issues often brought up during trade negotiations with China. The US also wants to intervene in the business of China's State-owned enterprises. With the US treating the strongest country among its cooperative partners this way, it's easy to imagine what a difficult time it gives to less powerful and underdeveloped countries in trade relations.

If the US can truly behave as Pence claims and make economic cooperation separate from others' sovereignty and based on an equal footing, there would be no major divergence in principles between China and the US. It's a blessing for the world in the 21st century that China emphasizes both sovereignty and equality when it comes to international economic cooperation.

We especially welcome the US to adopt this attitude toward China-US relations and make comprehensive China-US cooperation a role model for the world.

The core consideration of US diplomacy is geopolitics rather than global development. Washington cares about the neighboring regions of major powers and offers its assistance to these regions so as to weaken the influence of regional major powers. Meanwhile, distant countries are forgotten by the US and other Western countries. The South Pacific is one such region. It is China's mutually beneficial cooperation in the region that has drawn the attention of the US and other Western countries back there. The same goes for Africa. A number of African countries used to be ignored by the West in its geopolitical map. However, China's cooperation with Africa has reshaped the attitude of Washington and other Western countries toward Africa.

The China-proposed Belt and Road initiative has been warmly received by a large number of countries because it's not a geopolitical strategy, but a development plan guided by the principles of extensive consultation, joint contribution and shared benefits. It meets the pressing needs of developing countries and hence has ignited their passion for the initiative. When meeting with Xi on Friday, leaders and government representatives of eight South Pacific countries expressed their gratitude for China's longtime assistance and loans that have had no political requirements attached. This is the epitome of how welcome the Belt and Road initiative is.

It is hoped that Pence's words concerning sovereignty, respect and equality can become real action taken as part of US foreign policy. As long as the US has goodwill and real action, it will no longer need to criticize China and other countries will sense this and support it. Belittling a third party is not a noble act on the international stage.- Global Times

Related:

China meets an unequal detractor in US

The Chinese public has the enthusiasm and creativity in executing public diplomacy. They can, and will, find their own way of fighting against foreign provocation. Chinese government shouldn't always be the target and Western countries should also be confronted with China's strong non-governmental voices.

High-tech export controls will bring the US no good

Beijing needs to remain calm while Washington is impulsive. It has become a trend in the US to expand technological export restrictions against China, but it's uncertain to what extent Washington will enforce the restrictions. China shouldn't be swayed from the course of opening-up because of Washington's restrictions.


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Saturday 29 September 2018

After laughs at Trump, globalism or patriotism?

https://youtu.be/rewri7OdEZA https://youtu.be/QqZv3SLx1oI

US-ROK trade: 'horrible' to 'wins'?

US President Donald Trump delivered his speech loud and clear at the UN General Assembly on Tuesday covering a spectrum of issues, ranging from global security, trade, and above all - his idea of "sovereignty." His bragging also attracted some chuckles among the world leaders. What key messages did Trump fixate on? And how is the international community reacting to Trump's speech and his "America First" policies?

The US has revamped a trade deal with the Republic of Korea (ROK). The new version of the United States-Korea Free Trade Agreement specifically aims to boost US auto sale, but its effectiveness remains in doubt. Will this deal set a new precedent for more so-called "US wins" in its multi-front trade war?


NZ Prime Minister Jacinda Ardern Explains Why The UN Laughed At Trump

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China vs USA: Trade war


https://youtu.be/aHSSDQYaIjQ

Trump’s tariff policy has failed: analysts


After China slammed US President Donald Trump's accusation that China is meddling in the US midterm elections, analysts noted that Trump's behavior shows he has been shamed as his policy toward China didn't bring what he wants but has hurt his supporters.

If Trump discovers he is losing support due to China's trade retaliation, which has hurt the interests of his supporters, then he should blame himself and people who convinced him to impose additional tariffs against China, because it was his administration that started the frictions and led to China's retaliation, Chinese experts said on Thursday.

"We do not and will not interfere in any country's domestic affairs. We refuse to accept any unwarranted accusations against China," Chinese State Councilor and Foreign Minister Wang Yi said at the UN Security Council at once after Trump made his accusation.

Trump accused China during his remarks at the UN Security Council on Wednesday, saying, "Regrettably, we found that China has been attempting to interfere in our upcoming 2018 elections in November against my administration," CNN reported.

Trump offered scant details or evidence, which came during a session meant to focus on nonproliferation issues. He suggested the meddling attempts came as retribution for the budding trade war he has waged with Beijing, CNN's report said.

China's Ministry of Foreign Affairs also responded to Trump's remarks on Thursday. "China has always stood by the principle of non-interference in other countries' internal affairs, and this is a Chinese diplomatic tradition, and the international community knows this," Chinese Foreign Ministry spokesperson Geng Shuang said at a routine press conference.

"The international community is also clear on which country is most interested in interfering with others' internal affairs," Geng noted. He urged the US to stop making groundless accusations and slandering China, and refrain from making wrong statements and actions that damage bilateral ties and the fundamental interests of the two peoples.

'Not what he wants'

"They do not want me or us to win because I am the first president ever to challenge China on trade," Trump said at the UN Security Council. "We are winning on trade. We are winning at every level. We don't want them to meddle or interfere in our upcoming elections."

However, Chinese analysts disagree with Trump's rhetoric.

"This shows that Trump has been ashamed into anger due to his unsuccessful policy on China," said Ni Feng, deputy director of the Chinese Academy of Social Sciences' Institute of American Studies.

"After a series of tariffs and provocations on the Taiwan question, and sanctions on the Chinese military department and personnel, China has continued to retaliate without any compromise and even refuses to negotiate with the US under the current circumstances. So this situation is not what he wants, which is why he is so angry and tries to make new accusations," Ni noted.

The US midterm elections are approaching, and the Republicans are facing a serious challenge and might lose the House after the elections. So Trump is trying to "pass the buck," said Diao Daming, an American studies expert and associate professor at Renmin University of China.

"Blaming China is a good option for him, and some radical Trump supporters will believe him regardless of the truth," Diao noted.

Due to the interdependency between China and the US, China's retaliation will definitely hurt US people's interests, including those of Trump supporters. But don't forget it was Trump who irrationally began the trade frictions with China, and China is forced to retaliate, Diao said.

"If the US people want to blame someone, they should blame their president. If Trump wants to blame someone for losing support or even the elections, he should blame himself and his advisers who urged him to start the trade row, rather than pass the buck to China," he noted.

A Chinese State-run English language newspaper inserted a four-page supplement in the Sunday edition of the Des Moines Register, an Iowa-based newspaper, to highlight the negative effects of the trade frictions Trump launched.

"China is actually placing propaganda ads in the Des Moines Register and other papers, and making them appear like news," Trump tweeted on Thursday.

"According to US laws, foreign media can cooperate with US media," and many other foreign media companies do the same thing. So, accusing this normal act as evidence of meddling in the elections is far-fetched and groundless, Geng said.

However, the US government, the Congress and the media have done a lot to interfere in China's internal affairs on Taiwan, Xinjiang and Tibet, Diao noted. "This is real interference in others' internal affairs." - Global Times By Yang Sheng


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As long as China keeps upholding its opening-up, foreign enterprises, including many US ones, will continue participating in the development of the China market. China should continue cooperating with the Western world and the US on climate change, anti-terrorism, nuclear nonproliferation, global poverty and stabilizing the financial situation. As long as China keeps its development momentum, the US is doomed to lose the trade war.


Sovereignty, equality should go hand in hand, if Trump really means it

There are positive aspects as Trump emphasized the idea of national sovereignty in his UN speech. Meanwhile, it is common sense that sovereignty will only play a positive role if it is pre-conditioned on equality, the basic principle everyone abides by.



China won't yield to US trade stick

We also hope that the Chinese public gets to know the causes and effects of the event and the steadiness of the Chinese government's policies. No matter how long China-US trade conflicts last, China is doing what it should. China is honest and principled and a major trade power with intensive strengths. No one can take us down.


US hysterical in blocking sci-tech exchanges

The US is anxious about its temporary gains and losses. One minute it wants Sino-US exchanges, but the next it worries China is taking advantage. Its relevant policies are bound to change all the time. Its latest decision is like the trade war. Washington's purpose is to drag Beijing down, but it will mostly hurt itself.


China must open up despite external risks

The road to solidarity will reflect the times and China still needs to accumulate experiences. But as long as all of China's policies aim at serving the people, the country's solidarity won't go wrong.
Source: Global Times | 2018/9/19 23:33:40

Friday 21 September 2018

America First? China Is Dominating Global Technology

https://youtu.be/uEvu0HQQKKs https://youtu.be/aOYfUlOXMyU https://youtu.be/cHGkdPPlnR8 https://youtu.be/VoJmbjrvXHg https://youtu.be/-xHshQnuHZo https://youtu.be/MJLpGiHhr8E https://youtu.be/bihdCkIfA2Q https://youtu.be/xKfdhpt5b5s https://youtu.be/aG-8Fmk58-M https://youtu.be/jw3SoqZ3rFg https://youtu.be/wcumDVrus5Q https://youtu.be/uLqJQPr9TD4 https://youtu.be/g58MI9p-rUg

Tuesday 11 September 2018

Tariffs won’t make US firms produce in US

https://youtu.be/gEmu3Dz--bM

"It would not be profitable to build the Focus Active in the U.S. given an expected annual sales volume of fewer than 50,000 units," automaker Ford Motor Company said in a statement on Sunday.

US President Donald Trump tweeted earlier on Sunday that "'Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the US because of the prospect of higher US Tariffs.' CNBC. This is just the beginning. This car can now be built in the USA and Ford will pay no tariffs!" Ford quickly clarified the facts, evidently rebuffing Trump's tweet.

Likewise, tech giant Apple Inc. wrote a letter to US Trade Representative Robert Lighthizer, saying that a proposed 25 percent tariff on $200 billion of Chinese imports would cover a "wide range of Apple products."

In another tweet, Trump told Apple to make their products in the US instead of China. Apple hasn't responded.

According to the US media, the price of iPhone may increase to $2,000 if the company does as told.

The multinational companies that produce automobile and mobile phones have different manufacturing and sales layouts. Car manufacturers tend to produce their products where they are sold, while mobile phone manufacturers optimize their production chain costs worldwide. That's the natural law of economic globalization which can't be easily changed by a country's government.

The White House lacks understanding of the global production and value chains. "Make your products in the United States instead of China" seems naive. Instead of coercing companies to follow demands, imposing tariffs will only scare them off.

Simply making US companies produce in the US can't deal with the complicated global industry today. We have also learnt from history that neither side will gain in a trade war.

China is the world's largest automobile and mobile phone market. Setting tariff barriers between Beijing and Washington won't make US companies give up on China for the sake of their own country. As long as China doesn't make things hard for US companies, it's unavoidable that they will place production operations in China. The Chinese market can help them make money, but the White House can't.

Most American high-tech companies will face difficulties if they leave China. The larger the market is, the higher return the companies will get from their research and development. High-tech companies, if they can't grow to be giant, don't usually survive for long, and it would be fatal for many of them to lose the Chinese market.

There hasn't been a previous US government that dares to instruct multinational companies in production layouts, and the current administration has overestimated its executive power. The global industrial chain today is formed by market rules established over decades and can't be easily changed by one government.

It would be the White House's dream to expect that the US is not only the world's technology and financial center, but also the world's factory that sells its products globally. If the US doesn't want to wake up from this dream, then the outside world has to step in and rouse Washington.

Source:Global Times

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China-Africa cooperation charts a new path of mutual benefits

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Xi's China-Africa guidelines are the keys to the new global paradigm

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Tuesday 21 August 2018

PM: Understand Malaysia’s fiscal woes

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Wow! China's most impressive Guard of Honour for Tun Mahathier
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TUN Dr Mahathir Mohamad has appealed to China for its understanding on Malaysia’s fiscal woes, as uncertainty hovers over the China-backed infrastructure projects back home.

The Prime Minister, who is on a five-day visit to China, also hoped Beijing could lend a helping hand to solve the problems plaguing Putrajaya.

“We hope to get China to understand the problem faced by Malaysia today and believe it would look sympathetically towards the problem we need to resolve.

“And perhaps help us resolve some of our internal fiscal problems,” he said.

Dr Mahathir was speaking at a joint press conference with his Chinese counterpart Li Keqiang at the Great Hall of the People here yesterday, following the official welcoming ceremony and a closed-door meeting.

While Dr Mahathir had stopped short of specifying the problem, the Pakatan Harapan government had said that the country’s debt is now above RM1 trillion.

The new administration was also critical of the “lopsided” deals with China and moved to suspend projects with Chinese investment, such as the East Coast Rail Link, the Multi-Product Pipeline and the Trans-Sabah Gas Pipeline.

During this visit, Dr Mahathir had stressed that Malaysia was not against any Chinese firms and that he welcomed Chinese businessmen to invest in Malaysia.

At the press conference, Dr Mahathir said Malaysia had much to gain from China and believes that Chinese investment could bring down the unemployment rate in the country.

“Malaysia has a policy of being friendly to every country in the world irrespective of its ideology. This is because we need to have a market for our produce,” he said while expressing hope that Malaysia would become a South-East Asian hub for new technology being developed in China.

“China has great entrepreneurs with innovative ideas in doing business that Malaysians can learn from.

“China has got a lot that will be beneficial to us. It is a big and rich market created by very dynamic people,” he said.

Asked about his views on the trade war between China and the United States, Dr Mahathir said Malaysia would support free and fair trade.

He said he did not want to see this trade war becoming a new form of colonialism.

Dr Mahathir’s trip, which ends today, is his first official visit to China since his return to helm the country.

Ministers joining him on the trip are Foreign Affairs Minister Datuk Saifuddin Abdullah, Primary Industries Minister Teresa Kok, International Trade and Industry Minister Ignatius Darell Leiking, Agriculture and Agro-based Industry Minister Datuk Salahuddin Ayub, Minister in the Prime Minister’s Department Datuk Liew Vui Keong and Entrepreneurial Development Minister Mohd Redzuan Md Yusof.

Meanwhile, Dr Mahathir also had a closed-door meeting with Chinese President Xi Jinping yesterday evening at the Diaoyutai State Guest House.

Accompanied by his wife Tun Dr Siti Hasmah Mohd Ali, he later attended a dinner hosted by Xi and his wife Peng Liyuan.

Bernama reported that Dr Mahathir gave the assurance to Xi that there would be no changes in policy towards under the new Malaysian government.

He told Xi that he was impressed with the level of development achieved by China.

“We see China as a model for development,” he said.

Credit: Beh Yuen Hui The Star

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Friday 17 August 2018

Governance woes behind US trade war

Illustration: Peter C. Espina/GT

For now, there is still no end in sight to the brewing trade war between the world's two economic heavy hitters. Ignoring voices of objection at home, the Donald Trump administration announced that the second tranche of tariffs on $16 billion in Chinese goods will take effect later this month. Though Trump has yet to fulfill his campaign promise to levy a 45-percent tax on Chinese goods, his logic on trade policy refuses to change.

The reason why the US has provoked and intensified the trade war lies in the incapacity of the global system. Specifically, division of labor in the globalized era has led to the exodus of the US manufacturing industry out of the country. Meanwhile, the US claims that China's "predatory" economy has developed itself into the biggest beneficiary in the system.

That's why the Trump administration insists on attacking China's "stealing" practice in the name of "safeguarding US national interests," regardless of the cost of torpedoing the existing international order.

The robust stock market and economic growth of the US as well as the decline in unemployment have further boosted Trump's confidence in escalating the trade war. His trade policy has gained more acceptance among Americans. However, the logic behind his trade war can hardly hold water.

The era of globalization has been an inevitable development of human society. As people in the global village are more interconnected, trans-regional flow of finance, technology, information, service and talent has re-optimized global production resources, inspiring the development of countries and regions.

The unprecedented development of productivity and international division of labor has prompted developed countries which boast capital and technology advantages to transfer their low-end industries to other countries where labor and land costs are relatively low. Then a great many multinationals have mushroomed, which has objectively precipitated the growth of developing countries.

Economic liberalism has become a paragon of democracy with which developed nations dwell upon with relish. It's also an important pillar for the postwar international order. When developed countries sat on the top of the industrial chain to reap benefits, they never complained about the unfairness of the system but instead became its most powerful defender.

Ironically, the US - the founder of the global system - has now become its most proactive opponent. The Trump administration attacks the "unfair" global system and views China as being complicit in bringing about the fall of the US manufacturing industry and loss of jobs. Such rhetoric has led people to believe that the stature of the US has fallen to a third world country's.

Globalization is not without problem. Apple is a paradigm of a globalized industrial chain, but it's not a nice story. Developing countries at the low end of the industrial chain can only get disproportionally meager profits while lucrative gains flow to developed nations. In this way, the US deficit is far less than the book figures.

More severely, low-end manufacturing has worsened the environment, putting the health of the public in jeopardy. But the US-led developed world just passed the buck.

Emerging economies like China are resigned to be just a factory of developed countries, so they work hard to develop hi-tech and produce high-value-added products to create a level-playing field with developed countries. This is the law of market economy, which, however, has become a threat to its national security and an enemy of its economy in the view of the US.

The strange logic can hardly justify itself.

Denying others a share of the spoils is not the essence of the era of globalization. If developed countries think there's something wrong with the global system, they can appeal to international organizations to carry out reform, instead of resorting to short-sighted practices like threatening with tariffs.

Trump's trade war actually stems from domestic conundrums notably industrial hollowing-out and loss of everyday jobs. The problems are not a result of globalization but of domestic mismanagement. It seems that forcing jobs back home will create jobs, but it can't last long because it will fail to stimulate the fundamental driving force of industrial development. If Trump can make more efforts at boosting the real economy instead of waging a trade war, he may get closer to "Make America Great Again."

Credit: By Zhang Tengjun Source:Global Times Published: 2018/8/15 The author is an assistant research fellow at the China Institute of International Studies. opinion@globaltimes.com.cn

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Monday 30 July 2018

Trade war's twrist: US and EU gang up deal against developing countrries?


IN the past few days, there has been a new twist to the global trade war. The United States, which had threatened to impose a 25% additional tariff on European cars, made a deal with the European Union.

US President Donald Trump suspended the automobile tariff plan and may exempt the EU from the earlier US tariffs on aluminium and steel.

In exchange, the EU countries will buy more soybean and energy products from the US, and the two giants will work to eliminate tariffs and subsidies in all industrial pro­ducts traded between them.

Trump and European Commis­sion president Jean-Claude Juncker also agreed to work to reform the World Trade Organisation (WTO), and to tackle China’s market abuse, according to a Reuters report.


“If it holds, the US-EU pact could allow both to focus on China, whose economic rise threatens both,” added the report.

Trump’s economic advisor Larry Kudlow said that, “US and EU will be allied in the fight against China, which has broken the world trading system, in effect”.

Thus, the US-EU deal appears to be both good and bad news. Good because there is a cooling off on one front of the global trade war. Bad because the traditional Western allies may gang up to attack not only China but also the rest of the developing countries.

The US and EU may now jointly pressurise China on various issues. A bigger aim is to hinder China from its Made in China 2025 plan to upgrade its domestic industry in 10 high-tech areas including robotics, autonomous and electric cars, artificial intelligence, biotech and aviation. They do not want Chinese firms to emerge as world-class cham­pions that rival American and European companies.

The US, EU and Japan last December signed an understanding to jointly act against China on trade issues, including steel overcapacity, technology transfer, and the role of subsidies, state financing and state-owned enterprises.

Over the years, the EU has turned to some developing countries as potential allies when it has a conflict with the US but eventually it strikes a deal with the US and then the two Western powers unite and take aim at the developing countries.

This famously happened in the early 2001-2003, when the EU fought the US in the WTO over agriculture subsidies. Then they reached an understanding to protect their own subsidies while pressurising developing countries to open up their agricultural markets.

Today, developed countries continue to spend many hundreds of billions of dollars in subsidies, as well as maintain high tariffs, to keep their farms in business.

The US and EU also flood the world market with their artificially cheapened farm goods, while insisting that developing and poor countries open their markets through lower tariffs for both agricultural and industrial products. This hypocritical practice is at the heart of the imbalances and inequities of the world trading system.

Now, as part of their deal, the US and EU seem to want to continue maintaining double standards. They agreed to cut indus­trial tariffs and subsidies to zero, but to leave alone their agriculture tariffs and subsidies.

Moreover, they agreed to work on reforming the WTO, without spelling out what this means. At the WTO, the US and EU have recently moved to change the way the system has differentiated between developed and developing countries.

Recognising the weaknesses of developing countries, the WTO long ago adopted the principle of special and differential treatment (SDT) for developing countries.

Under this principle, in talks to cut tariffs, developed countries have to cut by a higher percentage than developing countries, and the least developed countries (LDCs) need not reduce tariffs at all. In various rules, developing countries and especially LDCs are mandated to take on less obligations.

However, the developed countries are now challenging the SDT principle.

“Developing and least-developed countries are facing the worst crisis yet at the WTO due to the sustained assault by the US along with the EU and Japan,” according Ravi Kanth in the Geneva-based South-North Development Monitor (SUNS) on July 4.

“Using Trump’s aggressive trade demands as a pretext, some major developed countries such as the EU and Japan have been attempting to deny the SDT flexibilities to deve­loping countries,” SUNS added, quoting a trade envoy from a major developing country.

 “The entire system of the WTO is under threat following the Trump administration’s trade initiatives based on reciprocal market access as well as the attempt to foist plurilateral outcomes without multila­teral consensus, and intensified moves to undermine the SDT flexibilities by industrialised countries, particularly the EU.”

Meanwhile, the US actions of unilaterally raising tariffs on alumi­nium and steel, and on US$250bil (RM1 trillion) of Chinese products, violate the WTO’s main principles, threatening the creditability and viability of the organisation itself.

But Trump is not worried or sorry at all. At the beginning of July, he said: “The WTO has treated the United States very badly and I hope they change their ways. They have been treating us very badly for many years, many years and that’s why we were at a big disadvantage with the WTO.”

Said the SUNS article, “In short, the developing and least-developed countries face the prospect of their hard won SDT flexibilities being taken away once and for all to ensure the US stayed at the WTO.”

When the US and EU were locked in a big conflict over auto tariffs, the main enemy of the EU, China and other countries would have been the US.

Now the EU and US have agreed to “reform the WTO” as part of their bilateral deal. It is likely that such an initiative would attempt to reduce the rights of the developing countries, and even to entirely remove the principle of special treatment or even the status of “developing countries” in the WTO.

The trade war could thus have huge collateral damage. All the more reason for the developing countries’ political leaders to pay close attention to what is happening in the trade negotiating and policy­-making arena.

Global Trend by Martin Khor

Martin Khor is advisor of the Third World Network. The views expressed here are entirely his own.


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Wednesday 20 June 2018

Benefits of Korean unification likely to be internal


Although there's still uncertainty over prospects for peace on the Korean Peninsula, it seems that South Korea is highly optimistic about the economic aspect of its cooperation with North Korea.

North Korea has a population of about 25 million. The largest city, the capital of Pyongyang, has about 3.2 million people and other cities generally have populations of about 300,000. The country's per capita GDP is a mere $530.

By comparison, with a population of 51 million, South Korea boosts per capita GDP of more than $27,500. But South Korea's economic growth is believed to have peaked, and its export-oriented growth model has run into trade protectionism.

If the hypothesis of merging and unifying North and South Korea were true, South Korea's population would increase by 50 percent. In light of this, although North Korea's GDP is a negligible fraction of that of South Korea, there is a chance that South Korea could see a 50 percent rise in its GDP that now adds up to $1.4 trillion. With a GDP of more than $2.1 trillion, a unified Korea would have an economy half the size of Japan's, or larger than the economies of Brazil, Italy or Canada.

South Korea's economy is dominated by family-owned conglomerates known as chaebol, with the top 10 chaebol accounting for a hefty part of GDP. Economic growth is seen mainly benefitting big chaebol such as Samsung and Hyundai, which in theory would have the opportunity of maintaining a fairly high rate of wealth growth over the next 10 years.

An assessment of Asia's economic future based upon the hypothesis of Korean unification indicates that it would be hard for Japan, China and even the US to derive any meaningful economic benefit from such an outcome.

North Korea's abundant pool of cheap labor and its market eager to see wealth growth will mostly benefit South Korea. In the past, China used to host a certain number of North Korean workers, but that was during an era when North Korea was blockaded by the outside world and could only rely on China for foreign-currency earnings.

If Korean unification, or to be exact the two nations' economic unification, becomes a reality, the situation will change. In this case, China or Japan will be just onlookers.

China might even find itself challenged by a unified Korea with lower costs in the world market. Japan might fare slightly better, considering its technological advantages and traditional partnerships with South Korean business groups. The benefits the US would get from unification would be limited or nil, taking into account uncertainties about its geopolitical interests.

For the world economy with total GDP of more than $70 trillion, Korean unification is likely to boost global growth by 1 percent. But much is still uncertain if this scenario is to play out.

North and South Korea still face tough obstacles including ideology, capital, nuclear weapons and internal political stability on the path toward genuine unification. The outcome also depends particularly on US political moves. Nevertheless, amid uncertainties there seems to be one certainty: The only way to avoid risk is to have the foresight to make future-proof plans.

By Chen Gong Source:Global Time
The author is the chief research fellow with Beijing-based private strategic think tank Anbound. bizopinion@globaltimes.com.cn

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Tuesday 16 May 2017

One Belt One Road Paving the Way to Success


https://youtu.be/mx_mE951GzI
https://youtu.be/izR0EOgrKU0
https://youtu.be/xw-M8fjnMk0
https://youtu.be/rGBjKAtu6wU

https://youtu.be/CXH7Tx4dxwM
https://youtu.be/-LhVrh1VjSg
https://youtu.be/hNKTbMx8PFk
https://youtu.be/wMMb3Gfe1nc
https://youtu.be/TxNUVSxvhAQ
https://youtu.be/toyTbzvHYJM
https://youtu.be/yhEUSfK_EqM

In 2013, Chinese President Xi Jinping proposed building the Silk Road Economic Belt and 21st-Century Maritime Silk Road, which became known as the Belt and Road Initiative.

Countries along the Belt and Road have their own resource advantages, and their economies are mutually complementary. This means there is a great potential and space for cooperation.

Connecting facilities is a priority in implementing the initiative. On the basis of respecting each other's sovereignty and security concerns, countries along the Belt and Road are improving the connectivity of their infrastructure construction plans and technical standard systems, jointly pushing forward the construction of international passageways, and forming an infrastructure network connecting all sub-regions in Asia, and between Asia, Europe and Africa.

At the same time, China and countries along the way are making efforts to promote green and low-carbon infrastructure construction and operation management, taking into full account the impact of climate change on any construction.

With regard to transport infrastructure construction, they are focusing on key passageways, junctions and projects, and giving priority to linking up unconnected road sections, removing transport bottlenecks, advancing road safety facilities and traffic management facilities and equipment, and improving road network connectivity.

Countries along the Belt and Road are building a unified coordination mechanism for whole-course transportation, increasing connectivity in customs clearance, reloading and multimodal transport, and gradually formulating compatible and standard transport rules, in order to facilitate international transport.

China suggests pushing forward port infrastructure construction, building smooth land-water transportation channels, and advancing port cooperation, increasing sea routes and the number of voyages, and enhancing information technology cooperation in maritime logistics. We should expand and build platforms and mechanisms for comprehensive civil aviation cooperation, and quicken our pace in improving aviation infrastructure.

In this episode, we will see how Belt and Road helps close the distance between people around the world.

The Belt and Road:
http://watchthis.chinadaily.com.cn/video/column/belt-and-road/

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Tuesday 14 March 2017

China ready to move into the trade and world leadership vacuum created by the US

China sends out positive signals


CHINA has sent out stabilising messages to the world on its economic, investment and foreign policies since it convened its two most important annual political meetings (“two sessions”) early this month.

The on-going “two sessions” inevitably attract global attention because China’s policies for the year are announced by top leaders at these meetings held in the imposing Great Hall of The People, to the west of Tiananmen Square in Beijing.

For this year, it is even more crucial for other nations to scrutinise the policies of China at the sessions, held from March 3 to 15, as US President Donald Trump has injected too much uncertainty into the global dynamics.

The world is weighed down by anxiety as Trump, who took office in January, abandons globalisation and advocates the return of protectionism. Hence, nations are looking for leadership from the world’s second largest economy, according to analysts.

The two sessions or lianghui refer to the Chinese People’s Political Consultative Conference (CPPCC) that began its session on March 3 and the annual National People’s Congress (NPC, or Parliament) that started on March 5. The CPPCC is China’s top political advisory body set up by the Communist Party of China (CPC) in 1949 after the CPC, led by Mao Zedong then, won the civil war.

Five years later, the legislative NPC was established.  

Steady economic growth

China is expected to grow steadily at 6.5% or higher this year as it continues its restructuring and reforms. Last year, the country achieved growth of 6.7%.

China’s Premier Li Keqiang announced on March 5 that the growth target for this year would be around 6.5%, while he addressed more than 3,000 legislators.

This slower growth target shows China is opting for a steady growth to reduce financial risk from excessive borrowing, according to economists.

Like the rest of the world, China expects to continue to experience global headwinds and uncertainties. Indeed, the premier warned of a far more complicated global picture ahead in light of the threat of protectionism.

Alfred Schipke, an economist from the International Monetary Fund, told the South China Morning Post: “Anything between 6-6.5% will be appropriate. The key is to have sustainable growth.”

For this year, China will have to give its leaders more room to push through some painful reforms to deal with a rapid build-up in debt and over-capacity.

Li said he would tackle state-owned “zombie enterprises” producing more coal and steel than needed. And nationwide pollution, caused largely by heavy industries, has to be addressed to bring back blue skies. His list of China’s difficulties also included laziness of some government officials. But will China’s economy continue to slide?

Global Times, the party mouthpiece of the CPC, has this to say in its frank editorial: “There are many problems in China’s economy at the moment. Given that it is now stable on the whole, we do not fear these problems as they will most likely turn into future opportunities for further development.”

The news portal stated that structural reforms in the Chinese economy had been “comprehensively addressed”.

Many enterprises that are heavy polluters have been shut down. The country no longer helps inefficient enterprises to stay afloat.

The current anti-corruption campaign has curbed improper spending to the extent that businesses in classy restaurants and retail sector are badly hit.

“China’s biggest accomplishments in the past years are that it did not stop to make adjustments in its economic transition. Instead, it adjusted itself while continuing to move forward. Now, society has fully adapted to the new normal in the country’s economy,” said Global Times.

Despite having to tackle its own economic problems, China has sent out a heartening message that it will continue to be the strong engine of global growth. Last year, China contributed about one-third of the world’s economic growth.

“China’s steady growth has brought in greater demand, investment and products to the world economy ... China will help improve global prosperity and regional infrastructure as it pushes its belt and road initiative,” said Wang Guoqing, spokesman for CPPCC on March 3.

More than 100 countries and organisations have joined the belt and road initiative and over 40 of them have cooperation pacts with China, added Wang.

The belt and road initiative, proposed by Xi in 2013, aims to build infrastructure and trade network to link Asia with Europe and Africa along ancient trade routes.

Since 2013, China has financed and gotten involved in projects on aviation, power, rail, road and telecommunications in participating belt-road countries. It is planning to host a belt and road Summit in May that could see China announcing more multi-billion dollar projects to benefit its trade partners and its own economy.

Opening up further

China had also told the world it would open up further and liberalise more sectors to promote trade and investment.

After the opening of the NPC session on March 5, core leader President Xi Jinping reiterated China’s commitment to “open up wider”.

“China will open up like never before. China’s opening door will not close,” said Xi in his report.

“China’s door will open wider, and China will keep working to be the most attractive destination for foreign investment.”

Xi made the remarks while joining in a panel discussion with lawmakers from Shanghai last Sunday, according to the official Xinhua News Agency.

Foreign firms will be able to get listed on China’s stock markets and issue bonds. They will also be allowed to participate in national science and technology projects.

Foreign firms will also be treated as domestic firms in license applications and government procurement, and will enjoy preferential policies like locals under the “Made in China 2025” initiative aimed at modernising the manufacturing sector.

Service industries, manufacturing and mining will be more open to foreign investment.

Ian Yoong, a former investment banker in Malaysia, opines that Xi’s vows to open up and liberalise sectors “shows that China is ready to take over the mantle from the US as the dominant superpower”.

He tells Sunday Star: “The key themes of President Xi and Premier Li’s speeches are globalisation and liberalisation of trade, totally countering President Trump’s plans for the US.

“This is a signal to the world that China is ready to move into the trade and political leadership vacuum to be created by the US.”

Easing tension in South China Sea

For South-East Asian nations, there was some relief when the Middle Kingdom appears to have softened its tone in South China Sea disputes.

In remarks made on March 3, Wang, the spokesman for the CPPCC placed emphasis on “navigational freedom”, which the US has often advocated.

“As a major trading nation and the biggest country along the South China Sea, China attaches more importance than any other country to navigational freedom and security in the South China Sea.”

This stance was starkly different from the hard tone of previous months, during which China warned the US and Japan to stay away from its “own sea”.

China’s recent naval force demonstrations in South China Sea had also unnerved Asean nations.

Observed Panos Mourdoukoutas, a contributor to Forbes magazine: “The shift in China’s tone in the South China Sea disputes comes as a relief for investors in Asian equities.”

But what is more comforting for Asean is that last Wednesday (March 8), China’s Foreign Minister Wang Yi announced that the first draft of a code of conduct (COC) for behaviour in South China Sea disputes has been completed.

He told a press conference: “Tension in the waterway has eased notably.”

Since 2010, China and the 10-member of Asean have been trying to work out a set of rules aimed at avoiding conflicts among nations laying rival claims over the waters.

China, which lays sovereign claim to over 80% of the resource-rich South China Sea through which US$5tril (RM22tril) worth of trade passes every year, has often stated it prefers to resolve disputes via peaceful talks with rival claimants – the Philippines, Malaysia, Vietnam, Brunei and Taiwan.

Wang vowed China would not allow this new stability in South China Sea to be “disrupted and damaged” by outsiders.

There have been sporadic incidents between US and Chinese ships in the South China Sea. Late last year, a Chinese ship seized a US navy underwater drone off the Philippines, but later returned it.

Korean Peninsula crisis

At his press conference, China’s Foreign Minister also addressed the most pressing issue for the region now – the possibility of a war exploding at Northeast Asia.

North Korea recently launched four short-ranged ballistic missile in response to large-scale military drills held by the US and South Korea. It was reported that these launches were aimed at US military bases in Japan.

Wang proposed “double suspension” to defuse the crisis, urging North Korea to suspend its nuclear and missile activities while the United States and South Korea to cease their war games.

Describing the two parties as “two accelerating trains coming towards each other”, Wang said China was willing to be a “railway switchman” to switch the issue back to the right track.

But US Ambassador to the United Nations Nikki Haley promptly responded that the US must see “some sort of positive action” from North Korea, while Cho Tae-yul, South Korea’s UN ambassador, said: “This is not a time for us to talk about freezing or dialogue with North Korea.”

CPC’s Global Times, in its editorial, opined Wang’s solution is “the only way out” to resolve the North Korean nuclear issue peacefully.

The North Korean nuclear issue is not created by Pyongyang alone, it argued.

Although North Korea’s development of a nuclear programme is wrong, Washington and Seoul are the main forces that have pushed North Korea to this path, it added.

“Now, they want to stop Pyongyang from going ahead, while refusing to reduce the impetus they are giving to North Korea. When they failed to reach their goal, they blame China for not being cooperative enough,” said the editorial.

Despite the negative response to China’s proposal, Global Times opines Wang’s handling of the press conference “displays confidence of the country”.

By Ho Wah Foon The Star

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