CHINAwatch

UN report - Is China holding Uighur Muslims in secret camps?

TV panel discussion on Inside Story with Aljazeera English Channel on 30 August, 2018.

Behind the controversy over Huawei and ZTE

Live TV interview with ABC (Australia Broadcasting Corporation) on 24 August, 2018

Trade War - live TV interview on RT and radio interview on BBC (Cantonese channel)

An exclusive live interview with TRT (Turkish Radio and Television Corporation) on 23 August, 2018. 

And a radio interview with BBC (Cantonese channel) in Hong Kong on 25 August, 2018. (My portion of the podcast starts from time counter 07:00 to 09:31)

US-China rivalry for power masked as a trade war

China's GDP is 12, 237 billion. Trump's full-blown tariff hit of $500 billion is only 0.4 % of China's GDP. 

Exports to the US represents 19% of China's total exports, with its value added (i.e. minus imported components and parts) representing some 3% of China's economy. Much of the US tariffs would affect parts and components used by US manufacturers at home. Moreover, many US businesses would be affected by this huge disruption in the global supply and value chain, of which China has become a central hub. So an all-out trade war with the US, while clearly a wakeup call, is not by itself an existential threat to China.

Though slowing down, China's  growth rate is about double the US, growing the size of Italy's economy every two years. Click here

As for ZTE, China is not incapable of technological advances. Witness its space missions and its progress in supercomputing technology. China's world leading position in supercomputers has been re-taken by the US only recently. Click here

China is well aware of its shortcomings and technological and financial distance from the US. "Made in China 2025" is precisely what China is trying to do, leapfrogging to the next technological commanding heights. 

Naturally, it's not just a trade war. It's nothing less than a contest for world power and influence. Click here and here  

America's hegemony is underpinned by the greenback. Nevertheless, as the world's biggest oil customer, China is beginning to chip at its predominance. More energy contracts with the Middle East and other countries are beginning to be denominated in the RMB, backed by convertibility in gold. Click here China is now the world's largest gold producer.  Click here

Of course, there is no way that RMB would lead the world anytime soon. But its relative influence will grow significantly, possibly ahead of the Japanese yen or even the euro sooner than people think.

A take by Joseph Stiglitz, Nobel Laureate, in Project Syndicate of 30 July that the US may lose the trade war is instructive. Embedded in the article is a YouTube summary of why China could become better off.

However, a full-scale trade war with the United States may deepen social discontent as the Chinese economy and social trust are already facing various headwinds.Click here  Nevertheless, the standoff is unlikely to last forever as both sides stand to lose massively if trade between the world's two largest economies dwindle. Click here 

Holding up the China Dream of national renaissance, President Xi is unlikely to cave in to President Trump's intimidation, mindful of China's "century of humiliation". The confrontation is unlikely to be resolved anytime soon, at least before the autumn US mid-term elections, for which Trump needs to appear strong vis-a-vis China. 

Purely on trade, an ultimate US-China deal remains possible as there is considerable common ground where both may agree. Click here  In any case, typical of Trumpism, initial "fire and fury" is a familiar ploy to ultimate "victorious retreats".

However, for trade and power rivalry with the US, Xi is likely to take a long view. As the world's hegemonic superpower seems to shift from Soft Power to Hard Power, President Xi's foreign policy of inclusive "Community of Common Destiny" seems to resonate better with many more countries. Click here By 2030, the dynamics may shift more in China's favour, if hopefully, by then, China would have learnt how better to improve its more inclusive Soft Power. 

Postscript (A historical perspective by Roncevert Almond in The Diplomat of 1st September)

Trade, War, and the South China Sea