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Diplomatic Maneuvers for China-US trade war: December 2018 agreement

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On the sidelines of the G20 summit in Buenos Aires, Argentina on December 1st 2018 the US President Donald Trump and the Chinese President Xi Jinping concluded a conditional trade agreement, according to which Beijing has to reduce its current trade surplus with the US by increasing Chinese purchases of soybeans, natural gas, commercial aircraft and some other US industrial goods. In contrast, Washington will maintain the tariff rate on Chinese exports to US of US$200 billion at 10 percent, instead of increasing it to 25 percent, which was due to come into force on Jan 1st 2019.

Although some commentators, politicians, or scholars over-optimistically described that deal as the end of the trade war, or at least a first step, between the two countries, including President Trump himself; but in fact by analyzing the reasons behind the two countries’ decision to conclude such agreement and whether this agreement paves the way for a final trade agreement or not, and what obstacles may stand in the way of reaching a final trade agreement between the two countries, it seems more likely to be a beneficial truce or a diplomatic solution to gain more time, calming the growing escalation of the trade war and to control its affiliated losses from both sides. Accordingly, the first question that may come in mind is how the future trade relations could be between the two countries?

The coming sections attempt to answer these questions by explaining the reasons behind conducting such agreement for the two sides, the main barriers or obstacles that may prevent reaching a commercial peace between the two countries, and the prospected future of US-China trade relations based on these factors as following:

Why to conclude such agreement?

Based on the rational choice approach, the simple answer of this question is that such agreement is beneficial for both of them; and in fact it is also beneficial for all the international economy, at least to stop the continued losses of both countries.

For the United States

In order to control the losses of the American economy since the beginning of the trade war, where the indicators of the American stock markets declined sharply during October and November 2018; large losses suffered by the American farmers because of China’s imports reduction of agricultural products and soybeans in particular, where 60 percent of its total US production were importing by Beijing; and the costs of the US Department of Agriculture increased for providing almostUS$12 billion as aid to farmers and breeders affected by the trade war.

Seek to improve the trade balance with China, where the Chinese trade surplus have been increased to $293.5 billion from January to November 2018, comparing with $251.3 billion in the same period previous year; combined with increase the Chinese exports to the US by 9.8% annually since November 2018, While imports fell by 25% during the same month.

In addition, to avoid any further economic damages or losses that may occur because of the continued escalation of the trade war between the two countries whether to the American or the international economy, Moreover, to face the internal pressure of his strong opposition, and for the re-election considerations.

The agreement came shortly after the G20 industrialized nations backed an overhaul of the World Trade Organization (WTO), which regulates international trade disputes, giving a symbolic victory for Trump administration, a sharp critic of the organization.

For China

To reduce the negative impact of the trade war, where the Chinese economy suffered from a decline in the economic growth rate during the third quarter of 2018,the defaults in the payment of corporate bond yields, and the decline in property prices; in addition to the devaluation of the Chinese currency since May 2018 by more than 8%, Which is warning to slow the economic growth to 6.3 percent next year compared to the current growth rate of 6.5 percent.

To avoid increasing US tariffs that would undermine China’s economic growth prospects, and increase pressure on its financial markets.

In addition to maintain the stability of the international economy, in order to avoid any negative effects on the Chinese economic ambitions such as the Belt and Road Initiative (BRI) whether directly or indirectly.

– Based on the abovementioned reasons it seems clear that such agreement is a beneficial for both sides to gain more time and prepare themselves for a second round of the trade war, or at least to stop the terrible consequences of the trade war escalation.

Obstacles of a commercial peace between the two countries

There are many obstacles or barriers that prevent a long-term commercial peace between China and the US such as:

The low level of trust between the two countries because of many of the thorny issues among them such as addressing Intellectual Property Rights (IPR) protection, the synthetic opioid fentanyl being sent from China to the United States, non-tariff barriers, cybercrimes, cyber-security, services and agriculture; and especially after the United States accuses Beijing of forcing American and foreign companies in general to disclose trade secrets versus access to the Chinese market.

The different understanding of the agreement by the two sides and the lack of clear future trade talks between them are also stumbling blocks in commercial peace way; while president Trump pledged to freeze tariffs in exchange for China’s commitment to reduce bilateral trade deficit with the US, but it is still unclear what exactly Beijing proposed; where the reports published by China’s state-owned media completely deny Beijing’s commitment to reduce the trade deficit with the US. In addition, whether China can reduce its tariffs on the American products, also the quantities and timing to resume its purchases of American goods are not clear. In addition to tariffs on Chinese goods, Trump has imposed tariffs on steel and aluminum imports into the United States this year. Numerous countries have filed litigation at the WTO to contest the levies.

Arresting the chief financial director of Huawei Communications Technology in Canada (the daughter of Huawei’s founder, the second largest smart phone company in the world)on December 1st 2018 (the same day as the agreement was concluded); and the American requests to extradition on charges of posing a threat to US national security arguing that the technology it uses can be used by the Chinese government for espionage. Additionally, the US companies were banned from exporting to the Chinese telecommunications company ZT earlier 2018 due to Iranian sanctions had been violated. Accordingly, the Chinese Vice Foreign Ministry has summoned the US Ambassador to China on Dec. 9 in a protest over the arrest. There is no doubt that this issue will affect the scheduled talks between the two countries; While the Trump administration insists that it will not affect the ongoing trade talks, Beijing believes that it is just an American attempt to contain China’s technological ambitions. In response, Beijing may have to take some measures to calm the mounting public anger, bearing in mind that a Chinese court decision to ban the sale and import of most iPhone models on Dec 10.

The fact that the competition between the two countries is much farther than the limits of the trade warand trade is one aspect of this competition, where from the Communist Party of China’s perspective the United States seeks to bring about comprehensive changes may reach the extent of changing the Chinese political system, and obstacle the Chinese economic and political aspirations.

Indeed there are many indications that the Trump administration consider the issue as much greater than a trade war by aiming to contain or undermine China’s rise in the world and maintain the American economic and political hegemony over the world for instance the US national security strategy and Trump hint to withdraw from the Nuclear Weapons Agreement, the declaration of the free and open Indo-Pacific economic zone, and the American opposition to BRI as well as the Made in China 2025’splan. In addition, the adoption of the America First policy gives the impression that the United States is seeking concessions, not to improve trade relations, but to maintain American hegemony. Furthermore, the historical experience proves that the American perspective in dealing with the international issues mostly characterized by realism features, where as soon as it considered any state as their rival the caution will prevail on their relations and keeps working and set strategies to win the zero-sum game with this state.

The narrow timeframe of the agreement, which lasts for no more than 90 days for further talks with the aim of structural changes on some thorny and complex issues, therefore, it is difficult to resolve this long list of issues in that short timeframe.

Furthermore, the two countries are also at odds over some other issues such as the China’s extensive claims in the South China Sea and U.S. warship movements through the highly sensitive Taiwan Strait.

Future of US-China Trade Relations

Whether the two countries could reach a commercial peace or not is depending heavily on their ability to overcome the above challenges and the real willingness of both sides to take concrete steps to end their trade war.

From one side, there are some steps or measures from the both sides to contain and avoid the escalation of trade war such as President Xi’s agree to designate fentanyl a controlled substance during the meeting, the Chinese announcement to slash on US-made autos from 40 percent to 15 percent in an attempt to show its willingness to calm the tension with Washington.

In the same context, whether the annual sessions of the National People’s Congress, the Chinese People’s Political Consultative Conference (CPPCC) scheduled for March 2019 may lead to substantial changes to China’s economic policy will be a decisive factor in determining the future of the US-China trade war. On the other hand, the announcement of President Trump on December 11 that he may intervene in the Justice Department’s case against the chief financial director of Huawei if it would be in the interest of U.S. national security and help forge a trade deal with China, gives an impression that both sides have a desire not to escalate the trade war or at least express their fearing about the consequences of this escalation.

From another perspective, it’s arguable that the US-China trade agreement is very similar to the agreement between Washington and the European Union in July 2018, which included strengthen the free trade measures and the announcement of more European purchases of the American agricultural products. But the agreement is in danger of collapse, with President Trump threatening once again to impose a 20 percent tariff on all cars and spare parts imported from the EU. The same scenario is possible with China as long as it serve the American interests, especially with the lack of a final agreement on what Washington considers as unfair trade practices by China in the areas of cyber espionage, piracy and intellectual property rights violations. With bearing in mind that the White House said talks would take place to resolve within the next 90 days specific US complaints such as forced technology transfer, or else existing 10 percent tariffs would go up to 25 per cent.

Political Science Lecturer Assistant, Suez Canal University, Egypt; and Ph.D. candidate at Jilin University, China

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The Problem of Uncontrolled Nationalism: The Case of Japan before the WWII

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Authors: Chan Kung and Yu(Tony) Pan*

Throughout the modern history of the world, Japan is undoubtedly an interesting country: it went from the edge of becoming a colony to one of few independent countries in Asia before World War II, and after the Great War, Japan even became a great power. From a broader level, Japan’s success at that time showed that Asians were not inherently inferior to Westerners. Unfortunately, Japan which was supposed to be the leader of Asia to a bright future, chose the path fascism and imperialism. Eventually, Japan became the source of the Pacific War.

It is undeniable that from the Meiji Restoration until the early Showa period (the end of World War II), Japan adapted an expansionary policy, which brought deep suffering to its neighboring countries and ultimately dragged itself into the abyss of destruction. When World War II ended, nearly 70 years of development achievements were utterly wiped out by the war.

In this context, an important question we need to ponder is: What led Japan to embark on an expansionary and self-destructive path? At what point in time did Japan’s policymakers start to lose its mind? What can future generations of nations learn from Japan’s tragic experience to prevent the same fate from happening again? As a country that has been entangled with Japan for generations and has a complicated relationship with Japan, these issues are of even greater relevance to Chinese researchers today.

Fortunately, there is actually a fair amount of scholarly research on the subject, and there exist four main explanations. The first is the “international structure theory” most commonly used by IR scholars (especially the realists), and the second, more common among Western scholars, is the “weak democratic government theory. The third is the “Pan-Asianism,” which focuses on the constructivist perspective. Finally, there is the political economy explanation of expansionary policies.

At the first glance, it seems that each of these explanations has its own rationale. Of the four, the view that the navy and the military were increasingly extreme in their struggle for policy dominance is the most possible explanation. However, it seems that each of the four existing explanations can, in fact, be incorporated into a new one, namely, that Japan’s self-destructive expansionary policies prior to World War II were the material manifestation of an uncontrolled nationalism. More specifically, these four explanations answer why the Showa government was unable to control the nationalist forces in the country. On the other hand, however, the question of whether nationalism would necessarily expand without outside interference and lead to expansionist policies was left unexplained.

Because of the natural characteristics of nationalism, it seems to us that there is a natural tendency for nationalism to expand in the course of its development. The main reasons for this phenomenon are not complicated. First of all, nationalism is a group ideology, which means that nationalists have a common goal at the macro level, but the boundaries of national interest are not consistently defined by different individuals. On this basis, because of the unreliability of group rationality, nationalism as a groupthink is prone to overstretch in the course of its development. Moreover, when such currents are not rationally controlled and end up holding state policy hostage, the state tends to follow a self-destructive path of expansionism. Pre-World War II Japan is a classic case in point.

It should be noted that the positive effects of nationalism is not being denied here, but it is crucial that a country’s policymaking process should not be ultimately being a hostage to nationalist forces. The question then, is how to prevent nationalism from spiraling out of control. From an empirical point of view, there are two different directions to prevent nationalism from getting out of control at the macro level: first, to eliminate “group irrationality” in nationalism; Second, to establish a corresponding gatekeeper between nationalism and state policymaking.

The first direction is essential to improve the thinking capacity and cultural literacy of society as a whole. This is a radical way to solve the above problems, and the improvement of the education system is the most crucial part of it. However, for reasons that are easy to understand, this approach often takes too long to implement, and the process is not really controllable. As a result, this approach, while very important, is often insufficient for policymakers.

The second approach, on the other hand, is a short-term solution (relatively speaking). To use the common metaphor of treating a bodily disease, a gatekeeper-kind-of-approach is not to eradicate the disease but rather to prevent it from damaging health amid acceptance of its existence. There are two other ways to establish gatekeepers: one is to establish a mature political system that uses institutional factors to insulate people from the negative effects of nationalism. This is also the more popular approach in developed Western countries. It should be noted that this approach has proven itself to be effective, most notably in the case of the United States, which also has two populist leaders, as opposed to Brazil, where institutional constraints and the resulting establishment have been significantly more effective in containing the negative effects of nationalism on the policy.

The alternative is to rely on a small number of political authorities within society to isolate the scourge of nationalism through the elite’s prestige and quality. Again, this is also an approach that has worked before. The best example is the significant role played by Chinese leader Deng Xiaoping in the “reform and opening-up” process.

So, which is more effective, institutions or authority? This is not a question that can be easily answered. There are advantages and disadvantages to both approaches, and because every country and society is different, and there is no one-size-fits-all solution.

First of all, the main advantage of institutional gatekeepers is that once established, the containment is apparent and fairly solid; however, the disadvantage is that institutions may take a long time to develop and may come at a cost (e.g., the French Revolution). An authoritative gatekeeper’s advantage is its high degree of operability, while the disadvantage is the unsustainability and instability of the individual factor. On this basis, the realization of either approach needs to be linked to local realities; in other words, neither is necessarily successful. However, despite the different possibilities of approaches and paths, one issue is certain: in this day and age, uncontrolled nationalism is still a problem that threatens national interests, and this issue must be given sufficient attention and focus by policymakers.

Lastly, for contemporary China, the case of Showa Japan has another area of critical research value: how to deal with the current international order? History has shown that almost every attempt to challenge the existing international order independently has often ended in self-destruction. Successful transformations of the international structure tend to be incremental. In the case of pre-World War II Japan, the immediate effect of nationalism was to push the Japanese government to place itself on the opposite side of the prevailing international order. Today’s China has certainly not come that far. In fact, as Professor Wang Jisi says: “In those days, Japan was an ‘institution’ in the international order, while China was rejected and discriminated against by the West as an ‘other.’ Today, Japan is still ‘within the system’ of the international order, while China has risen to become the world’s second-largest economy and its military power is not what it used to be, but there is still the question of how China views the existing international order and how to deal with its relationship with the existing international order. ” In dealing with this problem, preventing the negative effects of nationalism on state policy is undoubtedly an important aspect.

*Mr. Yu(Tony) Pan serves as the associate research fellow and the research assistant of Mr. Chan Kung, Founder, Chairman, and the Chief Researcher of ANBOUND. He obtained his master’s degree at George Washington University, the Elliott School of International Affairs; and his bachelor’s degree in University of International Business and Economics in Beijing. Mr. Pan has published pieces in various platform domestically and internationally. He currently focuses on Asian Security, geopolitics in Indo-Pacific region and the U.S.-Sino Relations.

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CCP’s Motives for the Cultural Genocides in Tibet and East Turkestan

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Despite more than sixty years military invasion of independent Tibet and East Turkestan (Ch. Xinjiang) by People’s liberation army of Chinese Communist Party (CCP).  Gross human rights violation, massive crackdown and mass internment of Uighur Muslim peoplecontinue unabated. Prominent scholars and experts have debated in recent years over the motives and the implications of such oppressive policies. Months ago, yet another new reports and finding have revealed the implementation of military-style coercive labor programs in Tibet. A better understanding can be made by discerning the roots of such oppressive policies adopted by, and to find the connection between the mass internment camps in Xinjiang and the forced labor programs that Beijing has been implementing in Tibet. From a broader perspective, it would not be an overstatement to call the Beijing actions in Tibet and Xinjiang as imbued with genocidal intent. There are underlying similarities between the Mass internment camps in Xinjiang and the forced labor programs, as a fact that the Tibetan, Uighur, and other minority’s population are the victims of similar severe forms of repression due to their belief and securing Beijing’s rule over it. Both the Tibetan people and the Uighur are currently facing severe threat of identities extinction.

Beijing’s Final Solution in East Turkestan (CH. Xinjiang) and Tibet

The definition of the Cultural genocide is when there is a systematic effort carried out to exterminate the identity of a group through the means of destruction and annihilation of culture, language, religious institutions of that targeted group. The act of cultural genocide is generally carried out accompanied with infliction of violence and oppression.

 For a long time, both the Uighur and Tibetans have been at the receiving end of the repressive policies of CCP, which aims to eradicate their religion, culture, language, and distinct identities. Recent uncovering of rising numbers of mass internment camps in East Turkestan (Ch. Xinjiang) and the military-style coercive labor programs in Tibet has brought more spotlight on the clear indication of the cultural genocidal attempt of the Chinese regime. Chen Quanguo is currently the party secretary of the region of East Turkestan (CH. Xinjiang). As soon as he took over as the party leader of the region in 2016, the persecution of the Uighurs and other minorities through mass internment camps escalate. It is not revelation that the architect of the internment camps in East Turkestan (CH. Xinjiang) Chen Quanguo was the former party secretary of Tibet for five years, where he has formulated and implemented similar draconian measures.

2018 was a big year, when United Nation has revealed the reports of hundreds of mass internment camps being built by the Chinese government in the region of Xinjiang. Ever since the reports of mass internment of Uighurs Muslims and other minorities in the prison-like establishment came to the light of the international community, Beijing has received extensive criticism and pressure likewise. Nonetheless, this pressure from the international community doesn’t seem to have stopped the cultural genocidal pursuit of the Chinese government as they have remained more resilient and repugnant. There are a spiking number of the new mass internment camps established during 2019-20. Through the intensive use of satellite images, records of the survivors and escaped victims, and other important tracking programs, research institutes such as the Australian Strategic policy institute in the recent month of September has present a database of around 380 internment camps build across the region till now.

Surge of Forced labor programs in Tibet in the midst of strong criticism on Mass internment camps in East Turkestan (CH, Xinjiang)

In the wake of strong criticism and backlash, the Chinese government has appeared to bring up yet another new repressive policy in the region of Tibet. Which evidently have a resemblance to that of Mass internment camps. Adrian Zenz, a leading researcher on East Turkestan’s mass internment has disclosed through the reports and the findings of investigations undertaken dating back to 2016 about the establishment of forced labor programs in Tibet. Researcher Adrian Zenz was one of the earliest groups of researchers, who have alerted the world about the existence Mass internment camps. According to the reports published by Jamestown Foundation in “China Brief Volume” dating September 22 have shown that in just the first seven months of 2020, there were more than half a million Tibetan mainly consisted of the population from the rural area registered into the forced Labor programs. The forced labor program in Tibet shows the similar tendency that the Chinese government has adopted towards the Uighur. Under the guise of vocational training and labor training, the Tibetans enrolled in the programs have to strenuously undergo thought transformation and adoption of the Chinese identities. The Tibetans were forced to abandon their way of livelihood, thought and culture. In the words of Adrian Zenz  on the Coercive labor programs in Tibet and the Mass internment camps in Ch. Xinjiang “In the context of Beijing’s increasingly assimilatory ethnic minority policy, it is likely that these policies will promote a long-term loss of linguistic, cultural and spiritual heritage.” 

A month ago, the House of the Representatives of the United State has passed a resolution with overwhelming support in an outcry against the Human rights violation in Tibet. The resolution has conveyed a clear message of the urgent need to protect the identity, religions, and culture of the Tibetans. As elaborated in H. Res. 697 that the House of Representatives “affirms the cultural and religious significance of the goal of genuine autonomy for the people of Tibet” 

Beijing’s logic behind their actions in Tibet and East Turkestan (CH. Xinjiang)

The current patterns of the actions that the Chinese government is following in the Tibet and East Turkestan (Ch. Xinjiang) can be drawn parallel to actions of the Nazi government before the horrendous Holocaust took place. It is an undisputedly fact that Nazi Germany led by Hitler thrived on an extreme form of anti-Semitism and that the wrongful hatred towards the Jewish people has played major factor leading to the Holocaust. Anti-Semitism itself is engraved with inherited stereotypes, prejudice, and false generalization of the Jewish people. It wouldn’t be so far fetch to say that the Chinese government has adopted a similar sort of generalization and stereotypes towards the Uighurs people and the Tibetan people. Uighur have been generalized by the Chinese communist party as bewitch with extremist thoughts. The religion and the identity of the Uighur people have been labeled as a form of extremism and need eradication by the CCP. In the words of the CCP officials, they compare the implementation of Mass internment camps as “washing brain” to cleanse the extremist thoughts.

The lack of urgency from the international community

The situation in East Turkestan (Ch. Xinjiang) and Tibet is a bit more nuanced, but if history has taught us anything then the Holocaust didn’t happen overnight but rather it was the culmination of decades of discrimination and repressions towards the Jews. The forced labor programs in Tibet and the mass internment camp campaign is only one of the Chinese communist party latest attempt to Sinicize and dismantle the Tibetan and Uighur’s  culture, language and religion. Unless and until, the international community will urgently considered the issues of East Turkestan and Tibet more than just a side topic to discuss with China, the Chinese government’s cultural genocide actions will remain steadfast.

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China according to Pascal Gauchon

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There is no doubt that the United States wants to safeguard its global hegemony but this does not mean that the United States will remain first permanently, power will perhaps be shared in a world of permanent conflict. As for China, it does not have the ambition to rule the world. He wants to serve his interests, turn things to his advantage. However it has no missionary or proselytizing instinct, its culture does not have a purpose of global domination. Chinese emigrants who left for the world in the nineteenth and twentieth centuries brought with them a clod of earth to maintain the link with the country of birth. This is not what the European or American pioneers in search of the New World did.

The Chinese dream, like the Japanese dream of the past, would be to be the absent masters of the world, without having to administer it. Take advantage of it, take advantage of it, defend yourself from the risks that can come from the outside, say the Chinese but without governing it. This I believe is Chinese philosophy. In short, there is no global ambition in Chinese culture.

For example, on the maritime power front, there is no doubt that they want to develop a maritime power, intervene where their interests are at stake, defend themselves from threats, have a say in the rules that govern the world economy but this has nothing to do with American hegemony after 1945. China rejects the idea of ​​world domination, even for itself.

The idea advanced by the Chinese nationalists is very different. They refer to the period of the Warring States, between the fifth and third centuries BC, a period in which no power, no order prevailed. In such a disputed world, China could carve out its own way without trying to impose any system.

Now, that China will succeed in becoming a great power is obvious. That it becomes such a dominant power as to create an order that replaces the existing order, it is legitimate to doubt it. Rather, the multipolar world will also be characterized by the presence of a certain disorder, in which Western countries no longer have the means to maintain the old order and China is likely to move away from its global responsibilities.

Having said that, we must not forget that China is a system of power in permanent mobilization and it is increasingly so with Xi Jinping marking a return to the spirit of Maoism. It has the advantages of an authoritarian and planned country, capable of pursuing long-term strategies without worrying about short-term profitability. In fact, the Chinese party state is restructuring the economy and society to capture innovation, to acquire it abroad by buying companies or stealing technology or even recruiting engineers. It is doing everything it can to remedy the lack of this fertile ground for freedom that we see as essential for innovation. Mobile telephony, the Internet and the so-called sharing economy have developed here faster than elsewhere. There is more social freedom in China – license, it should be noted – than the outside world believes, but certain things shouldn’t be touched. Criticism of the party state is not tolerated.

As far as Europe is concerned, this has proved to be very naive.

He hoped, for example, to rely on China to further his environmental goals, so much so that he had prepared a joint declaration to be proclaimed at the EU-China summit last June. But Beijing refused at the last minute due to the trade disputes between it and Brussels, confirming that Europe is not an essential strategic partner, but a market, a high-tech area where help can be found as in an open bar safe place to invest your capital.

As for the conflict in the South China Sea, Beijing, at least at present, has won the essential: the militarization of several coral reefs and the construction of artificial bases. The United States carries out many tests to show that access to its ships remains possible, but they are the only ones or almost the only ones, with France joining. China can therefore take a break to consolidate what it has earned, but of course there is a price to pay for Beijing: the rapprochement of Australia, India, Japan and Singapore.

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