Deal or No Deal, Trade War Will Benefit China and Even Russia

Protectionism prevails in the US to protect US backward industries, especially its car industry. The US has to impose high tariffs to prevent foreign advanced cars from dominance of US car market.

Chinese leaders are wise. They know China cannot switch to innovation- and creation-led economic growth if it protects backward domestic enterprises. They know China has to draw in advanced foreign enterprises and products to force Chinese enterprises to conduct innovation and creation in order to win competition.

However, they met strong resistance from vested interests. The trade war has enabled Chinese President Xi Jinping to successfully carry out his further reform to further open up China to international competition.

That is the major benefits that China has already obtained due to US trade war attacks.

If there is a deal to end the trade war, it will benefit both China and the US, just as CNBC’s report “China would still have room to ‘maneuver around’ increased US tariffs, expert says” points out.

The report quotes Victor Gao of the Center for China and Globalization as saying, “The tariff war is not in China’s interest but it’s also not in U.S.’s interest. So the sooner the two governments put the trade war behind us, the better”.

Even without a deal, Trump will also get quite a lot of concessions China has given to EU and other Western countries.

1. China will not devalue its currency;

2. China will not force foreign enterprises to transfer its advanced technology to Chinese enterprises through join ventures. In fact, what China wants now is top technology that foreign enterprises are not willing to transfer. However, allowing foreign enterprises to establish wholly owned enterprises with top technology will enable Chinese staff to have contact with or even learn their top technology. Such opening up will benefit both China and Western countries.

3. Protection of intellectual property. China now needs the protection of lots of the intellectual property developed by China on its own. To have others protect its intellectual property China certainly has to protect others’ intellectual property.

4. Removal of barriers that hinder others’ access to Chinese market. China has to do so if it wants access to others’ markets. Moreover, drawing in other nations’ popular products may urge Chinese enterprises to conduct research and development to produce equivalent and even better products.

China’s exports to the US are mainly products of labor-intensive industries that China will move to developing countries through BRI so that in the long run China will not suffer from US tariff hikes. China can easily find alternative source for its major imports of US agricultural products. Russia’s vast virgin land can provide lots of soybeans that can be grown on virgin land and may turn virgin land into good farm land for the production of other agricultural products to compete with the US. US trade war attacks will benefit not only China but also Russia.

Comment by Chan Kai Yee on CNBC’s report, full text of which can be viewed at


China trade minister pledges easier market access for foreign investors

China’s Commerce Minister Zhong Shan speaks at the 11th World Trade Organization’s ministerial conference in Buenos Aires, Argentina December 11, 2017. REUTERS/Marcos Brindicci

Reuters Staff December 31, 2017 / 5:51 PM / Updated 13 hours ago

BEIJING (Reuters) – China will make it easier for foreign investors to access the country, protect their rights and ensure a fair and transparent investment environment, Trade Minister Zhong Shan said in comments published on Sunday.

Writing in the latest issue of Communist Party theoretical journal Qiushi, Zhong said that the government would “raise the level of use of foreign investment”.

China would make market access a lot easier, protect the legitimate rights of foreign firms and create a “fair, transparent and predictable business environment”, he added, without giving details.

Foreign business groups in China have warned that foreign companies face an increasingly hostile environment in the country, and that Beijing’s policies and regulations unfairly favor domestic competitors.

Companies have also been worried about a lack of regulatory transparency, including inadequate protection for intellectual property.

Zhong said that there would be no “stagnation” to Beijing’s reform and opening-up process, and pledged China would “fully become a strong business and trade country before 2050”.

Reporting by Ben Blanchard; Editing by Richard Borsuk

Source: Reuters “China trade minister pledges easier market access for foreign investors”

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

Panda diplomacy: Merkel and Xi pushed into awkward embrace before G20

FILE PHOTO: Chinese President Xi Jinping talks with German Chancellor Angela Merkel as they pose for a group picture during the G20 Summit in Hangzhou, Zhejiang province, China September 4, 2016. REUTERS/Damir Sagolj/File Photo

By Noah Barkin | BERLIN Tue Jul 4, 2017 | 6:58am EDT

When President Xi Jinping took the stage in Davos in January and painted China as a champion of free markets ready to fill the global leadership role vacated by the United States, German officials couldn’t help but chuckle.

Their expectation was that Donald Trump, due to be inaugurated as U.S. president days later, would quickly temper his protectionist campaign rhetoric and patch up ties with Western allies, leaving little space for Beijing.

Six months later, as Xi arrives in Berlin for a highly symbolic visit with German Chancellor Angela Merkel before a Group of 20 summit in Hamburg, what seemed laughable in the thin mountain air of the Swiss Alps is not so absurd any more.

Despite concerns about human rights in China, frustrations over market access and worries about a wave of corporate takeovers in Europe by state-run Chinese firms, Germany is being pushed into an awkward embrace with Beijing as Trump doubles down on his promise to put “America First”.

For Merkel, the G20 host, Xi is an ally and Trump a troublesome rival on some of the most important issues on the agenda in Hamburg – from trade and climate change to economic development in Africa.

And so, Merkel will dine with Xi on Tuesday and plot G20 strategy with him over lunch on Wednesday.

After that, the two leaders will indulge in classic “panda diplomacy”, opening a $10 million Chinese compound in Berlin Zoo for Meng Meng and Jiao Qing – two giant pandas that China is lending to Germany as a token of friendship.

“For Beijing, the goal is to present itself as a generous, cooperative and friendly power, at home and abroad,” said Sebastian Heilmann, director of the Mercator Institute for Chinese Studies (MERICS) in Berlin. “It also serves to distract from politically controversial topics.”


The visit, a month after Chinese Premier Li Keqiang traveled to Berlin to meet Merkel, comes at an extremely sensitive time for big-power relations.

Trump is ratcheting up pressure on Beijing to restrain North Korea, which on Tuesday announced that it had successfully test-launched an intercontinental ballistic missile that showed it could strike anywhere in the world.

His administration is threatening punitive trade measures against China on steel, a step that could also hit German exporters. Meanwhile a U.S. warship sailed near a disputed island in the South China Sea on Sunday, prompting Beijing to complain of a “serious political and military provocation”.

Against that backdrop, Xi needs allies, and Germany is top of the list.

In a guest commentary in the German daily Die Welt on Tuesday, he called for an intensification of ties, saying the two countries should assume responsibility for peace, stability and prosperity.

While welcoming closer dialogue, the German government may have less lofty aims.

Eberhard Sandschneider, a China expert at Berlin’s Free University, said Merkel’s main goal was to gather as many allies as possible on climate, trade and Africa before the G20 summit, describing the encounter as a pure “coordination meeting”.

German officials have not shied away from criticizing China on a range of issues in recent weeks, including cyber espionage and Beijing’s treatment of cancer-stricken pro-democracy activist and Nobel Peace Prize winner Liu Xiaobo.

In an interview with the German magazine Wirtschaftwoche last week, Merkel expressed concern about the treatment of German firms in China and attempts by Beijing to play European countries off against each other.

“Beijing views Europe as an Asian peninsula. We see it differently,” she said. “Nevertheless, it is a fact that parts of German industry are dependent on China. So we need to deal with China’s demands in a way that brings harmony and advantages for both sides.”

The pandas, and an excursion by Merkel and Xi to Berlin’s Olympic Stadium to discuss German-Chinese soccer cooperation, should ensure that is where the focus of the visit remains.

(Additional reporting by Ben Blanchard in Beijing, Andrea Shalal in Berlin; Writing by Noah Barkin; Editing by Kevin Liffey)

Source: Reuters “Panda diplomacy: Merkel and Xi pushed into awkward embrace before G20”

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