The Tanjong Pagar container terminal in Singapore.
Shock contraction in quarterly GDP raises risk of job losses
Officials already grappling with aging, productivity threats
Singapore’s economic data have gone from bad to worse this month.
Exports slumped to their second-worst rate since the global financial
crisis, the purchasing managers index slipped into contraction for the
first time since 2016, and the economy shrank the most in almost seven
years in the second quarter.
After spending much of early 2019 enjoying relative resilience, a recession
is now looming. That’s a warning shot for regional and global
economies, since Singapore’s heavy reliance on trade makes it somewhat
of a bellwether for the rest of Asia.
The severity of the slump may be down to trade tensions and a
global slowdown, but Singapore has been grappling with longstanding
economic threats that have been slowly eroding the city state’s growth
potential: rapid aging, labor market shrinkage, and sluggish productivity among them. Those risks will become more acute for policy makers now.
“Any
undue turbulence or prolonged stresses from the trade war are only
going to compound the challenges of all the other issues --
productivity, demographics, anything else,” said Vishnu Varathan, head
of economics & strategy at Mizuho Bank Ltd. in Singapore. “External
demand concerns will be at the top of the list for now, because if you
don’t get that one right it’s that much more difficult to solve
everything else.”
Singapore remains one of the most export-reliant
economies in the world, with trade equivalent to 326% of gross domestic
product, according to World Bank data. That puts the city state at the
center of the storm stirred up by its top two trading partners sparring
over tariffs.
The shock GDP figures earlier this month prompted some analysts to downgrade
their Singapore forecasts for the year to below 1%. The government is
set to revisit its own 1.5%-2.5% range next month, but for now, it’s remaining calm, seeing no recession for the full year.
What Bloomberg’s Economists Say...
“Barring
a swift rapprochement in U.S.-China trade relations, our forecast for a
0.2% year-on-year contraction in Singapore in 2019 remains on course.
The government has ample firepower to cushion the blow, but it may not be enough to avoid a recession.”
-Tamara Henderson, Asean economist
The slump is largely contained so far to manufacturing, which makes up about a fifth
of the economy, but could soon spread to other sectors such as retail
and financial services. That increases the risk of job losses at a time
when businesses like International Business Machines Corp. are already laying off workers and banks such as Nomura Holdings Inc. cut staff.
The number of retrenched
workers in Singapore rose to the highest in more than a year in the
first quarter, though the unemployment rate has remained fairly steady
at 2.2% amid a recovery in construction.
“The labor market looks
to be on two tracks at the moment -- there’s a weak market in the
manufacturing sector but a steady one in the services sector,” said
Shaun Roache, chief Asia-Pacific economist at S&P Global Ratings in
Singapore. “High-frequency indicators including industrial production
and trade suggest that the environment will remain challenging in
manufacturing for the year.”
While those cyclical headwinds buffer the outlook, policy makers are also grappling with structural impediments to growth.
An employee clears tables at a food center in Singapore.
Faced
with a rapidly aging population, the government has been on an
aggressive campaign to re-skill its labor force and prepare workers for a
postponed retirement.
The median age is set to rise to 46.8 years in 2030 from 39.7 in 2015,
faster than the other top economies in Southeast Asia as well as the
world as a whole, according to United Nations projections.
Tied to its rapid aging is Singapore’s productivity conundrum.
As
the labor pool shrinks and gets older, the city state’s answer to the
productivity challenge has been to automate and digitize. With an
ambition to become a “Smart Nation,”
the government has poured money and energy into digitization projects
of all kinds, from helping seniors fine-tune smartphone skills at
digital clinics to attracting financial technology giants to set up shop and test their ideas.
It’s
that technological advancement, along with its world-beating
infrastructure and efficiency, that continues to make Singapore attractive to
businesses like Dyson Ltd., the U.K. manufacturer that picked the city
state for its location to build its first electric cars. It’s also a
reason why officials are confident Singapore can meet its foreign investment targets for this year.
“They’re saying the right thing, doing the right thing,” said
Edward Lee, chief economist for South and Southeast Asia at Standard
Chartered Plc in Singapore, who has penciled in 1% growth for 2019.
“Retraining, ongoing structural reforms on the labor side -- those are
the right things.”
Not much help: Despite his use of
tariffs to help skew the playing field in favour of US firms, the very
industries Trump has tried to help have become the weakest links in the
otherwise solid economy.
WASHINGTON: At rallies and whistle-stop campaign tours, President Donald Trump proclaims a renaissance in US factories rebuilding the nation with “American steel”, “American heart” and “American hands”.
But in reality, despite his relentless use of punitive tariffs to help skew the playing field in favour of US companies, the very industries he has tried to help have become the weakest links in the otherwise solid economy.
With just over a year to go before he faces re-election, Trump takes credit for the most vigorous economy in the industrialised world, with the expansion entering its 11th year and historically low unemployment.
But while services and office jobs dominate the US economy, Trump continues to promote the factory and mining jobs that were the lifeblood of the economy in the last century.
“American steel mills are roaring back to life,” he declared last month in Florida – the same day US Steel announced it would idle plants in Michigan and Indiana until “market conditions improve”.
And to West Virginians he said, “The coal industry is back.”
But in fact each of the sectors Trump has championed – coal mining, steel, aluminium and auto manufacturing – have been buffeted by a combination of market forces and changing technologies – factors beyond his control – or damaged by the very things he did to protect them, economists and analysts say.
Last month, a national survey of manufacturing activity hit its lowest level in nearly three years – narrowly avoiding slipping into contraction – while regional surveys have also seen record declines.
In March, the number of workers in US manufacturing shrank for the first time in nearly two years and it is now growing more slowly than the rest of the American workforce.
Trump has imposed tariffs on hundreds of billions in imports, renegotiated trade agreements and dangled the threat of worse over China and Europe and Mexico – all while publicly browbeating companies that close US factories or move production offshore.
But weak foreign demand, a strong US dollar and a decades-long evolution away from domestic manufacturing have progressively shrunk America’s industrial sector, said Gregory Daco, chief US economist at Oxford Economics.
Trump’s world trade war has not helped either.
“The policies that have been implemented in terms of protectionism have hurt the very sectors they were meant to protect. There’s no escaping that,” Daco said. - AFP/The Star
The US is deploying a double standard by calling China's
proposed sanctions on US companies for arms sales to Taiwan a "foolish
action," Chinese mainland analysts said on Sunday, pointing out that the
sanctions could not only cut base material supply to these companies
including rare earths but also block their non-military products from
entering Chinese markets.
The Point: Chinese economic data reveals the winner of trade war
‘China is Not an Enemy’ Says Open Letter Signed by 100 American China Experts to Trump
U.S. President Donald Trump. Photo: VCG
Experts tell Trump that China is not the enemy, so who is?
https://youtu.be/1hf5VAKG-TU
https://youtu.be/cE1jENtaEJY
A hundred American academics, diplomats and experts from the military and business communities signed an open letter calling on President Donald Trump to reexamine his policy toward China. The letter was published Wednesday in the Washington Post.
In the letter, titled “China is Not an Enemy,” the signatories express concern over the negative orientation of the Trump administration’s China policy.
“We do not believe Beijing is an economic enemy or an existential national security threat that must be confronted in every sphere,” the experts say in the letter.
The five authors are M. Taylor Fravel, a professor at MIT; J. Stapleton Roy, a former U.S. ambassador to China; Michael D. Swaine of the Carnegie Endowment for International Peace; Susan A. Thornton, the former assistant secretary of state for East Asian and Pacific Affairs; and Ezra Vogel, a professor at the Harvard University Fairbank Center for Chinese Studies.
The deterioration of the bilateral relationship is not in the interests of the U.S. or the rest of the world, and Trump’s attempt to “decouple China from the global economy” will damage the U.S. global reputation, according to the letter.
“The United States cannot significantly slow China’s rise without damaging itself,” the authors write.
“The fear that Beijing will replace the United States as the global leader is exaggerated,” the letter says. “Most other countries have no interest in such an outcome, and it is not clear that Beijing itself sees this goal as necessary or feasible.”
The key message of the letter is that the U.S. should not make China its enemy, especially in a rash manner, said Li Cheng, director of the Brookings Institution's John L. Thornton China Center, who signed the letter.
Signatories are representative as they hold different views toward China — some are pro-China and others are more critical, Li said. But they all disagree with the Trump administration’s China policy, Li said.
“I won’t say we are the majority,” Li said. “Maybe we are the minority that can’t change some people’s extreme views, but among those who reexamine the U.S. policy on China, many have started reconsideration.” Additional scholars have endorsed the letter after its publication online, he said.
A better policy orientation for the U.S. would focus on building long-term alliances that support economic and security objectives based on a realistic assessment of China’s ideology, interests, goals and actions, the experts write.
“We believe that the large number of signers of this open letter clearly indicates that there is no single Washington consensus endorsing an overall adversarial stance toward China, as some believe exists,” the letter concludes.
Views toward China vary significantly among different social groups in the U.S. and also inside the government, Li said.
“There is a need for different voices to let China know that there is no consensus on America’s China policy, and there won’t be one for a long time,” Li said.
Most of the signers are older experts who don’t represent the views of younger Americans, some observers said. Although the open letter originally targeted senior scholars with strong academic backgrounds, Li said it’s inappropriate to argue that younger scholars view China in a more adversarial way. A public poll showed that Americans under 29 are actually friendlier toward China, Li said.
Older scholars and officials have a better understanding of China after witnessing the country’s changes over recent decades, but members of younger generations will also know China better as time goes by, Li said.
“A proper discussion of China policy is very important, and it shouldn’t be limited inside the government,” Li said. Although it is unclear whether the letter will influence policy, he said it sends a strong message that “the views toward China between the U.S. government and scholars are different.”
Since last year, the two countries have been locked in a trade war, slapping tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods. Chinese President Xi Jinping and Trump agreed last week at a G-20 summit in Osaka, Japan, to resume trade talks. The U.S. also agreed not to impose new tariffs on Chinese imports.
This story was updated with Li’s comments.
By Qing Ying, Ren Qiuyu and Han Wei
Contact reporter Ren Qiuyu (qiuyuren@caixin.com); Han Wei (weihan@caixin.com)
An open letter to US President Donald Trump signed by
scores of Asia specialists including former US diplomats and military
officers has revealed that rational voices are emerging to challenge
paranoid ideas, Chinese experts noted on Thursday.
China insists all trade war tariffs must be eliminated as part of a trade deal
During an interview Thursday, British Foreign Secretary Jeremy Hunt still refused to directly criticize the violent protesters who stormed and vandalized the Hong Kong Legislative Council. Instead, he superficially stated that the UK condemns "all violence" and warned China again. He did not elaborate on the "serious consequences" that he previously warned China that it may face, but said the UK is "keeping options open" over China.
Almost all analyses believe Hunt is putting on an air. Nobody believes the UK will send its only aircraft carrier to China's coast. Nor would anyone believe the UK will punish Beijing at the cost of hurting trade with China. The UK has been dwarfed by China in military and trade. Hunt's inappropriate statements make many British people nervous: Will Beijing cancel an order from the UK to warn British politicians?
If China-UK relations deteriorate, will expelling Chinese diplomats become a card for London? This was the way that the Theresa May government used to deal with Moscow when a former Russian spy was poisoned in the UK. BBC reporters asked Hunt about the possibility for expelling diplomats. But it seems more like these BBC reporters, who bully politicians for pleasure, were using the unreliable option to make things difficult for Hunt.
Launching a diplomatic war against China leads to nowhere. European countries will not stand by London on the Hong Kong issue. By worsening diplomatic relations with China, the UK will only isolate itself.
What's important is that Beijing has done nothing wrong on the Hong Kong issue. It is obvious to all that China persists in the "one country, two systems" policy, and Hong Kong's system is different from the mainland's. The Fugitive Offenders Ordinance, proposed by Hong Kong regional government, was a small cause of the unrest. It was politicized and magnified by opposition factions. The situation escalated according to the logic under Hong Kong's system, not that of the mainland. But such storming and vandalizing is not acceptable under Hong Kong's system or any system worldwide.
Instead of blaming violent protesters, Hunt directed his ire against Beijing, which is based on his selfish interests to win the election. Hunt wants to defeat Boris Johnson. In charge of diplomacy, Hunt believes the Hong Kong issue is a chance that dropped into his and the UK's lap. But this is not the 19th century when the Opium War broke out. The UK has gone past its prime.
Hunt knew that Beijing would sniff at his threat of "serious consequences." But he still said it because he needed to play in front of voters. This is political fraud. Hunt obviously believes that the British people can be manipulated like a flock of sheep.
But Hunt's stunt has no good effect. Many British people are more worried whether Hunt's words would lead to "serious consequences" from China. Purpose and ability should match in diplomatic strategy, but Hunt is obviously outwardly strong and inwardly weak. Even the British people think his performance is amusing.
In a few short years, one minute the UK calls its relations with China the "Golden Era," and the next minute it warns China of "serious consequences." Although these statements are from different administrations and politicians, the UK still shows inconsistency in policy. The country also swung from side to side on Brexit. The UK's politics have become politicians' coffers and plots. They are undermining the UK's image.
Under such circumstances, we should not be too serious when dealing with the UK. Regardless of whether it shows a friendly or an opportunistic gesture, we should remind ourselves this will not be its first or last attitude toward China, and by saying that we mean it will be in a relatively short time, to be specific. - Global Times
US President-elect Donald Trump appointed Peter Navarro, a strident critic of China, as head of the new National Trade Council on Wednesday. Most of the Trump's views in his accusation against China during and after the election are influenced by Navarro. Moreover, Trump's special adviser Carl Icahn and Secretary of Commerce Wilbur Ross also take a hard line on the trade with China. The possibility of a potential trade war between China and the US after Trump takes office has come under heated discussion.
Trump’s Top China Expert Isn’t a China Expert
Peter Navarro doesn't speak Chinese, and has scant in-country experience. Should that matter?
University of California at Irvine Economics Professor Peter
Navarro, head of White House National Trade Council nominee for
president-elect Donald Trump, arrives in the lobby of Trump Tower in New
York, U.S., on Thursday, Jan. 5, 2017. A top congressional ally to
Trump said Thursday that Republicans will repeal Obamacare, including
some funding provisions, quickly while a replacement plan is due in "six
to eight months." Photographer: Albin Lohr-Jones/Pool via https://foreignpolicy.com/2017/03/13/peter-navarro-profile-national-trade-council-donald-trump-china-expert/
The issue needs to be considered in the backdrop of a major adjustment of the US policies toward China. At present, there is a glaring contrast between the economic prosperity and political stability in China and the economic downturn and political division in the US, which stings the US policy elites who are steadfast defenders of the US hegemony and its role as the world leader. Those elites tend to believe that the increasingly powerful China has not made the changes approved by the US and is trying to upend the international order shaped by the US.
Thus, it has now gradually become an expectation for the incoming US government to discard the long-standing engagement policy and adopt tougher or more confrontational policies toward China instead.
Against this backdrop, the trade topics closely associated with employment and welfare have become more sensitive but quite effective tools for the China hawks to create an unfriendly public opinion against China. The China-US trade disputes are no longer simply economic topics, but have strong political and strategic implications.
The manufacturing industry is not only the foundation for the US economic recovery, but also the key to solving the unemployment problem and guaranteeing social stability. The imbalance of China-US economic and trade relationship is considered by economists represented by Navarro as the critical reason for the weakening US manufacturing industry. They believe that the current close trade ties have boosted China's rapid development, whereas the hundreds of billions of dollars of US trade deficit with China has led to the current economic woes in the US. They also blame the US manufacturing companies that moved their factories to China for the high domestic unemployment rate.
In other words, the field of trade, which has long been regarded as mutually beneficial, is now considered by advisers of the incoming US government to be detrimental to their country's interests. The US maintains that a major trade policy adjustment needs to be urgently pushed forward to give China a head-on blow.
Although bilateral trade generally works by following WTO rules, the US policy elites, represented by Navarro, maintain that their country's serious inherent economic problems are caused by both China, which fails to address bilateral trade problems impartially, and the US government, which neglects the American public's demands. They keep overstating China's negative role to the American public, and thus have made full preparation for a big policy change toward China in the coming years.
Given the current policymaking atmosphere in the US as well as Trump's picks of advisers, the US has a strong desire to make a major confrontational policy adjustment in its trade with China in the future. However, it still remains uncertain if the adjustment will directly lead to a trade war.
The high interdependence of bilateral trade indicates that any form of trade war provoked by the US will ultimately hurt itself. It is probably difficult for the Trump team to figure out how much self-damage their country is able to withstand.
During the election campaign, Trump denounced the greediness of Wall Street magnates and promised to create new jobs, but, ironically, the officials he appointed after winning the election mostly came from the Wall Street.
China's economic power is no longer as it was before, and its defining power over bilateral relations in trade and all the other aspects is stronger than ever. It is impossible for China to sit back and let the US destroy the mutually beneficial situation in trade. Instead, China will firmly push forward the future bilateral ties under the concept of building a new type of major power relationship.
In contrast to the uncertain US trade policies toward China, China's policies toward the US are clear and concise: get rid of any barriers and push forward bilateral relations in a stable and mutually beneficial direction. The evolution of China-US relationship has always been a process of moving forward and addressing various conflicts along the way. It is hoped "the China-US trade war" will only be a verbal clash, instead of a clash in real action.
By Li Haidong Source:Global Times Published: 2016/12/25 13:43:39
The author is a professor with the Institute of International Relations at China Foreign Affairs University. opinion@globaltimes.com.cn
Right after the G20 summit in Japan, US Senator Marco Rubio made the headlines again by calling for legislation to continue the ban on Huawei, even after US President Donald Trump said he would lift some of the restrictions on US companies doing business with the Chinese tech giant.
Senator Rubio Prepares To Blast China ...
forbes.com
Rubio is a salient representative of the US political extreme. Some US politicians appear to take advantage of the split in US society and are using their extreme political views to gain more voters as well as please different political groups. This actually reflects the increasingly prominent malfunction of US politics.
It is an important reason why China is concerned that the US-launched trade war against China will not end in the short term.
We believe there are rational people who know China well at the US government's decision-making level. Even so, lawmakers like Rubio have gone too far. They are not messing with China but rather wearing down the credibility of US politics.
The US political system is becoming increasingly flawed. Many politicians deliberately act up to firmly oppose anything that would benefit China for the sake of being anti-China. That the political landscape is becoming extreme in the US is providing these politicians with the opportunity to play to their base if they show an open anti-China stance.
Rubio is one such politician. He paints himself as being hostile to China to draw attention. Despite the fact that the trade war and the Huawei ban are harming the interests of the US, Rubio insists on this excessively tough stance toward China because that could spark controversies which could end up favoring him.
This is what Rubio, an unsuccessful candidate for the Republican presidential nomination in 2016, needs to fulfill his political ambitions. Such narrow-minded thinking has de facto escalated the US-launched trade war against China.
Rubio doesn't understand China and probably barely knows China's history. But taking advantage of being anti-China, he can create hot debates and make headlines, and thus gain more assets for his political career.
Even though people who don't know much about the world's second-largest economy can be a senator in the US, it is a joke that someone like Rubio can pretend to be a China hand and comment on China's policies. This is one of the key reasons for the ratcheted-up tensions between China and the US.
The fundamental split in the US political system provides openings for hawkish politicians who have long been hostile toward China. The US is now in the throes of the 2020 presidential campaign, when candidates vie with each other to make outrageous remarks to appeal to their supporters.
This marked increase in radicals in US politics makes it much more difficult for the US government to function normally and for Republicans and Democrats to reach compromises, especially on major issues.
Even though there are signs of China-US trade frictions turning around, as the US political system will not fundamentally change in the short term, China must remain vigilant and prepare for a long-term trade war, in case the hawks gain the upper hand.
By Xu Hailin Source:Global Times Published: 2019/6/30 19:53:39
It seems Navarro didn't offer the president a technical
solution to solving China-US differences. He behaves more like a
political agitator. The two sides have gone through 12 rounds of trade
talks through which negotiating teams work hard to find common ground.
Malaysia may, to a certain extent, be less
vulnerable with the revival of major construction projects which in view
of the country’s strained finances, have been shrunk to cut costs. The
Singapore economy may undergo a “shallow, technical recession” in the
third quarter.
TALK of recession has hit the region, and near home, Maybank Kim Eng Research is flagging that possibility for Singapore in the next quarter.
Export-reliant economies are hard hit by slowing growth and supply chain disruptions caused by the prolonged US-China trade and tech war.
There may be a ceasefire now in the fight between the US and China following talks between President Donald Trump and President Xi Jinping at the Group of 20 Summit in Osaka last Saturday.
Existing US tariffs on Chinese imports still remain; additional tariffs on the remaining US$300 bil worth of Chinese imports, as threatened, will not be imposed for now
However, the new timeline for truce remains elusive; the suspicion is that of a “creeping” imposition of tariffs, as “each truce is followed by new tariffs and then, another truce.”
In December last year, Trump and Xi had struck a truce following which talks broke down in May this year, and tariffs on US$200bil of Chinese imports leaped from 10% to 25%.
Will there be light out of this tunnel, with harder issues involving tech and supremacy not tackled? Smaller economies with the fiscal and monetary space may be able to cushion their economies somewhat from the downdraft on growth.
Malaysia may, to a certain extent, be less vulnerable with the revival of major construction projects which in view of the country’s strained finances, have been shrunk to cut costs.
The Bandar Malaysia and East Coast Rail Link projects to be revived, are now downsized to RM144bil and RM44bil respectively.
Works for the Light Rail Transit (LRT) 3, from Bandar Utama in Petaling Jaya to Johan Setia in Klang, will resume in the second half of the year, at a reduced cost of RM16.63bil.
Talks are said to be ongoing to revive the Mass Rapid Transit Line (MRT) 3, or MRT Circle Line round the city centre, at possibly RM22.5bil which is half the original cost.
“The timing (of the revival of these projects) has been very good for Malaysia,’’ said Pong Teng Siew, the head of research at Inter-Pacific Securities. “These projects will go on for several years and positively impact the economy over that period.’’
Domestic spending and activities will provide ‘some comfort’ to the local economy but we should ensure that any further monetary easing actually goes into the real economy to support these activities, according to Anthony Dass, head of AmBank Research.
Malaysia’s private consumption was at a record 59.5% of its nominal (calculated at current market prices) Gross Domestic Product, which hit US$88.5 bil in March, 2019, according to CEIC Data.
Benefits from trade diversion from China, the current US tariff hotspot, are offset by downward pressure on global trade where volume was flat in the first quarter, the weakest since the financial crisis.
Global semiconductor sales also declined in February and March, the first back-to-back double digit contraction since the financial crisis.
In view of this decline, the volatile global trade environment and rising geopolitical tensions, open economies “should be prepared for the unexpected,’’ said Nor Zahidi Alias, the associate director of economic research of Malaysian Rating Corp.
The Singapore economy may undergo a “shallow, technical recession” in the third quarter, said Maybank Kim Eng, pointing to possible intensification of supply chain disruptions and US export controls on more Chinese tech firms.
Following the Trump-Xi talks, the US has reversed its equipment sales ban on Huawei but will that ease fears of other similar bans down the road? Defined as two consecutive quarters of negative quarter-on-quarter growth, a recession will prompt further easing of monetary policy in Singapore.
Manufacturing in Singapore, which accounts for a fifth of the economy, fell 2.4%, with electronics dropping 10.8% in May from a year ago; output is expected to decline again in June.
Hong Kong has also been issued warnings of recession, as its economy experienced the largest contraction since 2011, declining by 0.4% in the first quarter against the previous quarter.
Thailand’s economy grew at its slowest pace in four years, in the first quarter, hitting 2.8% from 3.6% in the same period last year; exports remain weak.
Taiwan’s economy avoided contraction in the first quarter but private consumption and gross capital formation slowed significantly while government consumption declined.
In the US, a mis-calibration in interest rate policy by the Federal Reserve can cause a sharper slowdown than expected or bring on a recession.“Monetary policy affects the economy with unpredictable lags, it could be hard for the Fed to time its policy (rate cut) that can prevent a downturn this and next year,’’ said Lee Heng Guie, the executive director of Socio Economic Research Center.
Columnist Yap Leng Kuen notes the reminder to ‘expect the unexpected.’
Even though there are signs of China-US trade frictions
turning around, as the US political system will not fundamentally change
in the short term, China must remain vigilant and prepare for a
long-term trade war, in case the hawks gain the upper hand.
Robot monks in Longquan monastery, Zhen Robotics delivery bots, the AI-powered Baidu Park in Beijing, are examples of how far China has come technologically. Its tech rivalry with America is at the heart of the US-China trade war that has embroiled companies like Huawei.
The agreement reached between Chinese President Xi Jinping and his US counterpart, Donald Trump, at the 14th G20 summit in Osaka, Japan, is in line with the best expectations of international public opinion. Given the fact that the Sino-US trade talks have run hot and cold in the past, opinions are divided over whether the new round of trade talks will successfully do the job.
The agreement has broken the deadlock between China and the US. However, Beijing and Washington still face the arduous task of implementing the consensus reached between the two presidents while overcoming differences during the negotiations.
During the meeting, Xi and Trump clinched a deal to restart economic and trade consultations between their countries on the basis of equality and mutual respect. The US side also agreed that it will not add new tariffs on imports from China. These deals add new possibilities to end the year-long trade dispute between the world's two largest economies that has been deadlocked since May.
It is not a big surprise for Xi and Trump to reach such an agreement. The outcome is logical and guided by the principles of trade and economy. It is also in accord with the general expectations of the international community. Such a result is undoubtedly in the interests of both the Chinese and US societies as it frees people in both countries from the fear of an escalating trade war.
None of the business communities or general public in China and the US want a trade war against each other. In the US, the initiator of the trade war, the call to end the dispute is gaining more and more support. To sum up from all perspectives, the result of the meeting complies with the real expectations and desires of both societies.
Nevertheless, China-US trade tensions have not been completely settled. There is no winner in this current dispute. Public opinion in both countries will likely be critical of an "incomplete victory" against the other. It is a situation similar to the ice-breaking movement made by China and the US to solve trade issues last December. The US media has a tradition of thriving on criticism. In that case, some US media are expected to argue that Washington has made too many concessions to China. The Democrats will also take it as an opportunity to mount pressure on the US government. These uncertainties come from the US and are its own internal concerns.
The situation after resuming economic and trade consultations between the two countries is even more critical. It is worth noting that the Trump administration has repeatedly contradicted itself in the past. The complexity of the power structure of the US government, a divergence of opinion within the administration's team and the need to win the 2020 presidential election are foreseeable reasons for its reneging. Not only has China been on the alert for such changes, but also the international community has learned from the US' historically ambivalent attitude. It will take a while to see what the Trump administration will do this time.
As for China, it is important to keep a clear mind and strong determination in this situation. As it turns out, China's perseverance in the fight against the trade bullying policy of the past few months has played an important role in reaching a positive result with the US side at the Osaka summit. China is willing to work with the US to find solutions. However, it's getting more and more clear that China is not afraid of a trade war and will not be beaten by one. A strong image is essential for China to reach an equal and mutually respectful agreement in discussions with the US.
China is committed to a peaceful development policy. China has not been involved in any war, nor severe conflicts with other countries in the past 30 years. As a result, some people doubted the possibility of China standing firm and staying strong when confronted with strategic challenges. Now, they have a clear answer from China's performance during this dispute. China is under the strong leadership of the CPC central committee and the Chinese government has the courage to take responsibility and make decisive decisions. Chinese society has actively responded to the government's call, and the whole nation has shared the ups and downs of a difficult situation. Cohesion has been the collective belief of the Chinese public. External threats will not force their way into Chinese society.
China has no intention of benefiting from defeating other countries. China sincerely hopes that all parties will enjoy a win-win situation through interaction and cooperation. Diplomatic interactions between China and the US over the past few decades have served as a multiplier effect to boost their national interests. A trade war on a large scale is out of the expectations of both the Chinese government and Chinese public. There is no doubt that China is willing to push forward China-US economic and trade cooperation to keep pace with the times and bring the interests of both sides in line with each other. China has no strategic resistance to such cooperation.
However, the duress of unilateralism does nothing to help solve the problems between China and the US but rather it causes severe unrest and damage to both sides and the rest of the world. If China and the US can meet each other halfway and reach consensus on key issues, then the two sides will find a solution to the trade dispute that is acceptable to both countries and beneficial to the world.
After a lot of fine tuning, Chinese society has grown mature enough to deal with any profound changes there might be in the China-US relationship. Chinese people are well-prepared for any possible uncertainty in future trade talks. The path of China's development will not always be smooth and that is accepted by the Chinese public. Chinese people will not be surprised by any potential turmoil in China-US economic and trade relations, and they know China will handle it accordingly.
The meeting between Chinese President Xi Jinping and US
President Donald Trump on sidelines at the G20 summit in Osaka broke the
deadlock between the two countries sinceearly May. According to a
briefing by the Chinese side, the two sides have agreed to restart trade
consultations with the US declaring not to impose new tariffs on
Chinese products. Trump said his meeting with Xi was "excellent" and
"we're right back on track."
The G20 summit is being held in Osaka, Japan with the
most pressing global tasks and anxieties on the table for the group of
the world's largest economies. We are in an era where advancement and
problems coexist. Whether the problems can be seriously tackled depends,
to a large extent, on the attitudes of the leaders in Osaka.
The G20 Question: Will there be a truce in the trade war?
https://youtu.be/fb1AMTD9cDw
