Like Germany, Japan may be major beneficiary of US-China Trade War


As for fear of China’s rise, Japan’s is most serious. The US is afraid of being replaced by China as the only hegemon in the world. The fear is groundless as China has no ambition to be world hegemon seeing the heavy burdens suffered by the US in maintaining its status as the only superpower in the world.

Pragmatic Chinese may ask: What good world hegemony will bring to China? US failures in Korea, Vietnam, Iraq, Afghanistan, etc. are enough lessons for them.

Japan’s fear is real. It fears Chinese retaliation when China has grown strong enough to do so as Japan has inflicted great sufferings to Chinese people when it invaded China from 1931 to 1945.

However, when Trump has adopted the policy of “America first” and withdrawn from the Trans-Pacific Partnership aimed at containing China, Japanese Prime Minister Shinzo Abe realized that Japan could not rely wholly on US protection. He began to make great efforts to improve Japan’s relations with China. By so doing, Japan may avoid Chinese retaliation and even be benefited in having a larger share of Chinese market due to US withdrawal from the Chinese market. In fact, the US is Japan’s major competitor in Chinese market as they both export goods with better technology to China.

Article by Chan Kai Yee.

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China-backed RCEP trade pact in ‘final stage,’ deal eyed in 2019: Singapore


Lee Chyen Yee, Aradhana Aravindan November 14, 2018

SINGAPORE (Reuters) – Negotiations for a major China-backed trade agreement have moved to a final stage and Southeast Asian states involved in the talks are determined to wrap up the deal in 2019, Singapore, current chair of the 10-nation group, said on Wednesday.

The Association of Southeast Asian Nations (ASEAN) along with China, Japan, South Korea, India, Australia and New Zealand, had hoped to reach broad agreement on the Regional Comprehensive Economic Partnership (RCEP) pact at summit meetings in Singapore this week.

“We noted with satisfaction that the RCEP negotiations have advanced to the final stage, and we expressed our determination to conclude a modern, comprehensive, high quality, and mutually beneficial RCEP in 2019,” said a statement issued by Singapore.

Earlier on Wednesday, Singapore’s Prime Minister Lee Hsien Loong warned that the deal was at risk of losing credibility if negotiations were further prolonged, while Beijing said talks on the deal this week were at a “critical moment.”

“Market access negotiations have advanced substantially, bringing us closer to finalization next year. We are now at the final stage of negotiations,” Lee told a meeting of the leaders of the 16 countries involved in the talks.

“Further prolonging negotiations puts the RCEP at risk of losing credibility and support from our stakeholders,” Lee said, adding that businesses and citizens will miss major opportunities should the talks drag on.

Negotiations began in 2012 for RCEP, which envisions the creation of a free trade zone that will encompass 45 percent of the world’s population and more than a third of its GDP, but does not involve the United States.

“We have come to a crucial moment now. We have to continue the momentum, so that we can wrap up the deal with the finishing touches and aim to conclude negotiations next year,” Chinese Premier Li Keqiang said in a statement issued by China’s foreign ministry.

RCEP talks were given new impetus after President Donald Trump pulled the United States out of the competing Trans Pacific Partnership (TPP) trade deal in one of the first acts of his administration.

Eurasia Group analysts said Singapore and several other ASEAN members had been pushing hard to achieve a substantial conclusion to the talks this week.

“However, an announcement along these lines is unlikely, as member countries have yet to agree on the broad framework for market access for goods, services and investment,” the group said in a note on Tuesday.

India and Japan are among the countries with reservations about the pact, analysts and sources close to the discussions said.

Sudhanshu Pandey, an official in India’s Ministry of Commerce, said on Wednesday that India had wanted to see more progress on services, which constitute more than 50 percent of the GDP of most of the RCEP countries.

But he added that India supported the deal and had urged “early conclusion” of the talks.

Writing by Jack Kim and John Geddie; Editing by John Chalmers and Raju Gopalakrishnan

Singapore’s Prime Minister Lee Hsien Loong speaks during the opening ceremony of the 33rd ASEAN Summit in Singapore November 13, 2018. REUTERS/Edgar Su

Source: Reuters “China-backed RCEP trade pact in ‘final stage,’ deal eyed in 2019: Singapore”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China Waiting for Trump Pushing Iran, India, Turkey Into Its Arms


Reuters says in its report “Trump’s sanctions on Iran tested by oil-thirsty China, India” yesterday that in order to reimpose sanctions on Iran, the US wants Iran’s major oil customers to refrain from purchase of Iran’s oil.

Two of Iran’s five major oil customers India and Turkey have difficulties to obey. They fear rise of oil price due to reduction of world oil supply caused by the sanction.

Iran’s largest oil customer China, however, has geopolitical consideration. Since the US regards it as trade war enemy, it shall help Iran to counter US sanctions like that it has been doing for Russia. The core of China’s united front against the US is its alliance with the enemies of the United States.

True enough, on October 25, Reuters says in its report “Iran to boost oil supplies to China in October-November: Rosneft CEO”, “Iran plans to supply more than 20 million barrels of crude oil to the Chinese port of Dalian in the October-November period, up sharply from the usual monthly volumes of up to 3 million barrels, Igor Sechin, the CEO of Russian oil major Rosneft, said on Thursday.”

China will pay Iran Renminbi for its oil due to US financial sanction so that Iran will buy much more goods from China. That will partially compensate China’s loss in US market due to US trade war with China.

Moreover, increase of oil purchase from Iran may reduce Russian oil supply to China so that Russia may sell more oil to Japan and South Korea that are also oil=thirsty. Both Japan and South Korea are US trade war targets and both of them want to expand their shares in China’s vast market.

If India and Turkey need Iranian oil, China certainly will not take all Iranian oil but will left some for them. It can even help India build pipelines to get oil and gas from Iran through Pakistan.

China- and Russian-led Shanghai Cooperation Organization (SCO) has already taken in India and Pakistan. It may soon take in Iran as Iran is applying for SCO membership. Then SCO will be quite a large new cold war camp to counter the US with other Asian countries including Japan and South Korea as its peripherals.

Where is US camp of cold war? It even has difficulties in its relations with its European allies.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at https://www.reuters.com/article/us-iran-nuclear-oil/trumps-sanctions-on-iran-tested-by-oil-thirsty-china-india-idUSKCN1N30GW.


China’s United Front and US Isolation Grow in Asia


Japan is America’s closest ally in Asia. Its Prime Minister Abe has made great efforts to help former US President Obama establish the Trans-Pacific Partnership (TPP) to contain China. However, Obama’s successor President Trump, though is trying hard to contain China with trade war now, scrapped TPP as soon as he was inaugurated in spite of Abe’s great efforts in trying to persuade Trump not to do so.

Moreover, Trump has been pressuring Japan to make trade concessions to the US in order to reduce US trade deficit with Japan.

He has thus pushed Japan into China’s arms. According to Reuters’ report “China, Japan to forge closer ties at ‘historic turning point’” on October 25, Abe is now making great efforts to improve relations with China that he previously tried hard to contain and will make efforts to make Regional Comprehensive Economic Partnership (RCEP) a reality, which China takes the lead to form in order to counter Obama’s TPP.

There were also Reuters’ reports “Pakistan PM Khan, in search of loans, to visit China next week” and “Iran to boost oil supplies to China in October-November: Rosneft CEO” the same day on Pakistan seeking financial aids from China and Chinese purchase of Iran’s oil to help Iran deal with US sanctions.

However, the most disappointing Reuters’ news for the US on that day is “India aim to hold army drills in China by end of year”. Due to the border dispute between China and India, the US has tried hard to have India join its quad of the US, Japan, Australia and India to counter China. However, India refused to join the other three of the quad in their military drill. On the contrary has been planning to conduct military drill jointly with China that the US wants it to contain.

What India, Japan, Iran and Pakistan have been doing proves that the US is risking being entirely isolated in Asia while China is successful in forming a united front in Asia to counter US hegemony.

What diplomacies!

Comment by Chan Kai Yee on Reuters’ reports, full text of which can repectively be viewed at https://www.reuters.com/article/us-china-india-defence/china-india-aim-to-hold-army-drills-in-china-by-end-of-year-idUSKCN1MZ1BW, https://www.reuters.com/article/us-china-japan/china-japan-to-forge-closer-ties-at-historic-turning-point-idUSKCN1MZ00O, https://www.reuters.com/article/us-iran-oil-china-rosneft/iran-to-boost-oil-supplies-to-china-in-october-november-rosneft-ceo-idUSKCN1MZ15K and https://www.reuters.com/article/us-china-pakistan/pakistan-pm-khan-in-search-of-loans-to-visit-china-next-week-idUSKCN1MZ1HZ.


China, Japan Pledged Closer Ties at ‘Historic Turning Point’


Chinese Premier Li Keqiang, Japanese Prime Minister Shinzo Abe, Chinese Foreign Minister Wang Yi and Japanese Foreign Minister Taro Kono attend a signing ceremony at the Great Hall of the People in Beijing, China October 26, 2018. REUTERS/Thomas Peter

Reuters says in its report “China, Japan to forge closer ties at ‘historic turning point’” on October 25, during Japanese Prime Minister Shinzo Abe’s 3 days China visit “China and Japan on Friday pledged to forge closer ties as both countries stood together at an “historic turning point”, signing a broad range of agreements including a $30 billion currency swap pact, amid rising trade tensions with Washington.”

It quotes Abe as sauomg. “From competition to co-existence, Japan and China bilateral relations have entered a new phase. Hand in hand with Premier Li, I would like to advance our ties forward” and “With President Xi Jinping, I would like to carve out a new era for China and Japan.”

China’s state media quote Xi as saying that bilateral ties had returned to the right track and China would ensure the positive momentum continues, according to state media and “That is worth cherishing by both sides”.

In addition $30 billion currency swap pact the two sides has signed a wide range of agreements including 500 business deals worth $18 billion between Chinese and Japanese companies during the visit,

Reuters quotes Chinese Premier Li Keqiang as saying that both sides had agreed that as major countries, China and Japan should uphold free trade and accelerate talks on the Regional Comprehensive Economic Partnership (RCEP) and on a China-Japan-Korea trade zone.

That is what they will do to counter US unilateralism. Since Trump has scrapped TPP that Japan is anxious to have to contain China and been pressuring Japan for trade concessions, Japan has no choice but to join China in forming RCEP and China-Japan-Korea free trade zone to counter the US.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at https://www.reuters.com/article/us-china-japan/china-japan-to-forge-closer-ties-at-historic-turning-point-idUSKCN1MZ00O


Growing impact: a third of Japan Inc hurt by U.S.-China trade war – Reuters poll


Tetsushi Kajimoto October 16, 2018

TOKYO (Reuters) – The number of Japanese companies affected by the U.S.-Sino trade war has jumped to a third, soaring from just 3 percent in May with firms fretting about prospects for their exports from China as well as slower Chinese demand, a Reuters poll found.

The survey also showed 53 percent of firms were worried about the fallout from the escalating trade friction and that some, albeit still a small percentage, had begun looking at shifting production of exports out of China to other countries.

Of the companies citing an impact, the vast majority said they were feeling the effect ‘to some extent’, with only 2 percent calling the impact large.

The fear is, however, that the fallout will become much worse.

“If it does become a fully fledged trade war, then this could hit Japanese exports and supply chains, in turn hurting capital expenditure and dampening consumer spending and potentially damaging Japan’s entire economy,” said Masaki Kuwahara, senior economist at Nomura Securities, who reviewed the survey results.

Washington in September levied tariffs of up to 25 percent on $250 billion of Chinese goods as punishment for what it says are unfair trade practices, while Beijing has hit back with tariffs on about $60 billion of U.S. imports.

U.S. President Donald Trump has since threatened to slap tariffs on an additional $267 billion of Chinese imports.

“The trade friction is having a big impact on exports from China of the raw materials used to build products in the United States,” a manager at an auto-sector firm wrote.

“Even if we consider measures to avoid tariffs, there’s a limit to what we can do,” the manager added.

The survey, conducted Sept. 27-Oct. 10, showed non-manufacturers firms were just as worried as manufacturers about the fallout.

“Any direct impact may be small, but sluggish business conditions and anxiety about the future could cause a decline in demand in the medium to long term,” wrote a manager at a construction firm.

Companies responded anonymously to the survey, conducted for Reuters by Nikkei Research. It polled 482 large and mid-sized non-financial firms, about 240 of which responded to the question about on the extent of the impact of the trade war.

Asked if they had an export base in China and were thinking of moving any facilities out of the country, 13 out of 97 firms that responded to the question said they were considering such a move.

Among the firms looking at shifting production, most said they were considering Southeast Asia as an alternative, while some were thinking about bringing output back home. None chose the United States.

Firms that have publicly said they could shift production include Toshiba Machine Co (6104.T) which has said it plans to move output of U.S.-bound plastic moulding machines from China to Japan or Thailand. Mitsubishi Electric Corp (6503.T) is shifting output of U.S.-bound machine tools from its base in Dalian, in northeastern China, to a Japanese plant in Nagoya.

The survey also found that 40 percent of Japanese firms thought the trade conflict could disrupt supply chains over the next three years, with many citing fears that prices for imports of raw materials and parts could surge.

“If major U.S. companies like Google, Amazon and Apple start bringing production home, that could destroy Chinese parts makers with which we do business,” a manager at a machinery maker also wrote.

Only 11 percent of firms said, however, that they were currently considering steps to deal with a potential escalation of trade spats.

Of those considering contingency measures, shifting production as well as diversifying sales and procurement routes were the most often cited.

The International Monetary Fund last week lowered its global economic growth forecasts for this year and next, predicting 3.7 percent for both years instead of 3.9 percent, citing trade policy tensions and the imposition of tariffs as a key factor behind the cut.

Reporting by Tetsushi Kajimoto; Editing by Malcolm Foster and Edwina Gibbs

Source: Reuters “Growing impact: a third of Japan Inc hurt by U.S.-China trade war – Reuters poll”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China slaps anti-dumping duty on chemical from U.S., Japan


October 15, 2018

BEIJING (Reuters) – China will impose anti-dumping tariffs on imports of hydroiodic acid from the United States and Japan, the Ministry of Commerce said on Monday.

The tariffs will take effect from Oct. 16, with levies set at 123.4 percent on U.S. suppliers and 41.1 percent on Japanese, and will last for five years, the ministry said.

Reporting by Beijing monitoring team; editing by Darren Schuettler

Source: Reuters “China slaps anti-dumping duty on chemical from U.S., Japan”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.