CHINAwatch

Money Talks - Trade Wars

Special Year-end interview with TRT World on 27 December, 2018.

"China scrambles to sustain its trade truce with America"

So says The Economist of 18 December. On the same date, reporting on President Xi Jinping's speech on the 40th Anniversary of China's reform and opening-up, the The New York Times points out that whilst concessions are on the cards, China will stay its own course of development under the well-proven guidance of the Communist Party.

Judging from China's remarkable achievements under the Communist Party's watch during the past 40 years, President's Xi's confidence is understandable. Witness the staggering contrast in living standards enjoyed by China's people and society in images presented by the BBC and the South China Morning Post (SCMP)

Indeed, there are not-so-subtle references in President Xi's speech to self-proclaimed masters teaching an ancient nation with an astonishingly successful transformation during the past 40 years how to suck eggs. There are also pledges of never seeking world hegemony and continuing reform and opening-up but at China's own space and choosing. Evidently, the leadership remains wary of the spectre of collapse of the former USSR by blindly following an American "shock therapy" trying to change everything from economics to politics within 500 days

While the trade war has yet to play out its full havoc, not least to the world economy, according to Caixin, China's internationally-respected economic publisher, a worse--case scenario is likely to knock off up to 1.5% of China's GDP growth. Whilst this may not be a life-and-death matter, in the midst of a host of domestic and international challenges, it certainly is an unwelcome prospect.

Most of the changes demanded by the US, such as intellectual property protection, creation of a more level-playing field for foreign businesses, and buying more American goods and services, tally with China's own development trajectory. However, as evident from President Xi's speech, China will not give up its model of mixed state capitalism anytime soon. 

In any case, rhetoric and hubris are no substitute for real progress. It's pointless to win brownie points at every turn of events. It's better for China to tune down proclaimed ambitions such as the "Made in China 2025" plan, even as China continues its drive to upgrade technological capabilities, perhaps in cooperation (and competition) with the West. 

With China's political model, time is very much on China's side. After all, realizing China's Two Centenary Goals of building a modern China and a global "Community of Common Destiny" will take many more decades. Even a 360-degree push-back against China is unlikely to derail China's long-term trajectory. Click here 

So there is a real chance that, the Huawei saga notwithstanding, China will keep its head down, keep calm and carry on. This augurs well for a reasonable settlement with the United States over the trade war, even as long-term competition and rivalry remain. 

"2018 was meant to be Xi Jinping’s year. Then China’s Belt and Road unravelled"

A SCMP article of 19 December asserts that China's Belt and Road Initiative is unraveling in the wake of a series of hold-ups and cancellations for fear of a "debt trap" and economic and ecological sustainability. 

While corruption, ill-conceived financing, and ecological impacts continue to plaque some Belt and Road projects, on the whole, they have delivered substantial gains for host countries. 

According to a Standard Chartered Bank report of 9 October, Belt and Road projects remain alive and kicking, often in partnership with international organizations like the World Bank and the Asian Infrastructure Investment Bank (AIIB).

According to the report, "bilateral debt relief offered by China should help to avoid systemic debt fallout. Increased transparency would likely improve project quality, address growing concerns and facilitate debt resolution. Commercial, environmental and social viability would help ensure project sustainability".

EY (Ernst and Young), an international accounting giant, released a report dated September 2018, showing, among other things, -

• China has signed 118 Belt and Road contracts with 103 countries with international organizations. 
• 279 deliverables were identified at the 2017 Belt and Road Forum for International Cooperation. Of these, 265 have become routinized and 14 proceeding in an orderly manner.
• 130 bilateral or regional transport agreements have been signed with B & R countries including railways, highways, shipping, aviation and postal services. 
• 2, 490 China-Europe freight train services now operate, an increase of 69% year-on-year, involving some 10,000 journeys in 15 countries and 43 cities. 
• The Mombasa-Nairobi Railway project shortens journey time from 10 hours to 4, reducing logistic cost by 40%. Local procurement accounts for 40% of the contract value. 
• Along the B & R, China has opened 356 international road passenger and freight transport lines, and set up 5,100 direct flights very week with 45 countries. 
• Import and export value between China and B & R countries increased 18% annually, totalling US$5 trillion over 5 years.
• China has invested US$28.9 billion in 82 Economic and Trade Zones along the B & R, attracting 4,000 companies, contributing US$2 billion taxes and creating 244,000 jobs for host countries. 
• Cultural exchange and cooperation agreements have been signed with 60 B & R countries with two-way visits exceeding 25 million. This is expected to increase to 85 million by 2020 with tourist consumption reaching US$110 billion. 
• China's Scholarship Silk Road Program supports at least 3,000 additional students from B & R countries every year. 
• The Datang Environment Desulfurization Project in India actively improves local environment.

Truth is almost always somewhere in the middle. 

China arrests two Canadians - any connection with the Huawei saga?

Live interview with Press TV on 13 December, 2018. 

Why is China's biggest technology company being targeted?

TV panel discussion on Inside Story with Aljazeera English Channel on 7 December, 2018.

 

Beijing's reaction to arrest in Canada of Huawei's CFO

TV interview on The World with ABC (Australian Broadcasting Corporation) on 7th December.

Download Huawei CFO arrest - Australian Broadcasting Corporation (ABC)  

 

 

China-America tensions heat up: Huawei CFO faces extradition to US

 Live interview with RT on 6th December, 2018. 

Interviews with Aljazeera and RT on US-China trade war and long-term rivalry before and post G20 Summit

With Aljazeera English Channel on 1 December, 2018. 

With RT International on 2 December, 2018.