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However, when Trump has adopted the policy of “America first” and withdrawn from the Trans-Pacific Partnership aimed at containing China, Japanese Prime Minister Shinzo Abe realized that Japan could not rely wholly on US protection.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.


Timing Right, Diplomacy Corrected, Still US Will Lose to China

Trump has chosen the right timing, though a little too late, in starting his trade war with China in order to stop China’s rise and prevent it from surpassing the US.

China has already begun the reform to switch from export- and investment-geared to innovation- and creation-geared economic growth.

For such a reform, it has been carrying out its Belt and Road plan to move most of its export-oriented labor intensive industries to Silk Road economic belt and Made in China 2025 plan for creation- and creation-geared economic growth.

The US fears that the Made in China 2025 plan, if completed, will eliminate US technology dominance and US hegemony along with it. Therefore, it started a trade war with China to force China to scrap the Made in China 2025 plan.

As China has only moved a few export-oriented enterprises to Silk Road economic belt and as China has only carried out its Made in China 2025 plan for a few years far from achieving its goal, Trump should be regarded as having chosen the right timing to start his trade war to stop China’s rise. If China has moved the industries and completed the Made in China 2025 plan, the US will simply be unable to attain its goal to stop China’s rise.

However, Trump underestimated China strength of resistance until he lost the first round of his tariff battle with China. China’s retaliation of tariff hikes hits hard at his stronghold, the farmers in several states whose votes enabled him to win the presidential election and become the president now. China, however, seems intact in spite of the tariff hikes on its exports.

China even has the humor to broadcast in the US a cartoon with soyabean as its protagonist to laugh at Trump.

Trump, though furious, realizes that his weapons are limited. He threatens to impose tariff hikes on all China’s $500 billion exports to the US, but US Congress opposes that. It has already adopted a bill to cut or eliminate tariffs on toasters, chemicals and roughly 1,660 other items made outside the United States, of which nearly half are produced in China according to a Reuters analysis of government records.

Trump now realizes that since it is hard to win the trade war with China, it will be utterly impossible for the US to win the worldwide trade war he plans to start with EU, Japan, South Korea, Canada, Mexico and other countries.

He was wise to have changed his mind and reached a truce with EU. He will perhaps not be too harsh in dealing with Japan, South Korea and other countries.

The problems for him are that those countries are all America’s competitors. They certainly will not join the US in its trade war with China. On the contrary, they will exploit the trade war to take over America’s share in their most profitable Chinese market.

In addition, if Trump strikes too hard at China with tariff hikes in the trade war, he will make American people suffer and thus become unpopular. As a result, he may be unable to be reelected in the 2020 election.

Chinese President Xi Jinping, however, has no such worry. Chinese people will not hate him even if the trade war gives rise to some hardship in their livelihood as they are very clear that the trade war has been started by the US and that Xi refuses to be subdued as Xi cherishes their China Dream.

Lack of popular support and ability determines that the US has no chance to win the trade war.

The above has made very clear that Trump is unable to have popular support in his trade war.

His withdraw from TPP that Obama established to contain China shows his lack of vision, understanding and skill to deal with the contradiction between his goals to protect US interests and stop China’s rise.

Article by Chan Kai Yee.

China’s Busy Diplomacy to Grab World Leadership from the US

The US has to pursue isolation as world leadership is too heavy a burden and it has to boost its economic growth to maintain its number one status in world economy. That is certainly a correct move, but it gives China opportunity to grab world leadership from the US.

I have repeatedly warned China not to try to replace the US as world leader as it has not been strong enough yet, but China’s Xi seems precisely doing the opposite – making great efforts to grab from the US world leadership at least in economy and diplomacy.

Is Xi stupid in doing so? China’s gifted strategist Sun Tzu teaches us to maintain invincible position while not miss the opportunity to win. One relies on oneself to be invincible but cannot make one’s enemy lose the war, if there are no factors for the enemy to lose the war. That is why Sun Tzu says that one can know victory but cannot make victory.

Indeed one can play tricks to make one’s enemy commit mistakes and lose the war like what China’s gifted strategist Sun Bin did in his famous Battle of Maling. But what if the enemy would not be duped?

At the beginning of the Korean War, China’ talented general Peng Dehuai copied Sun Bin’s trick. His troops encountered South Korean troops first but retreated instead of winning an easy first battle as he had to avoid giving his enemy the impression that his troops were capable to fight.

On the contrary, he told his troops to throw things away while retreating to give General McArthur the false impression that his troops were in panic as they were afraid of well-equipped US troops. As a result, McArthur advanced rashly and had his troops encircled by Chinese troops. Peng’s surprise offensive caused US troops to collapse and retreat as fast as they could to the south of Seoul. The victory was brilliant, but what if General McArthur had not been arrogant but had stopped his rash advance and, instead, built fortifications along the frontline to keep the large part of North Korea he had occupied. With poor weapons, General Peng simply could not break US troops’ defense.

McArthur gave Peng the opportunity to win and Peng did not miss the opportunity to win though his troops were much weaker.

Now, China is not strong enough to win, but the US is giving China the opportunity to win. Shall China miss the opportunity? I pointed out in my post earlier that Chinese President Xi Jinping is a man of quick decision and quick actions. I now realize that Xi is taking the opportunity to win. That is why China has suddenly taken the initiative to improve relations with Japan, India and Indonesia, the most important nation of ASEAN. (See Reuters’ reports “China’s Xi, India’s Modi seek new relationship after summit” on April 28 at, “China Premier Li says open to increasing Indonesia palm oil import quota” on May 7 at “ and
“Japan, China hail warming ties amid troubled history” on May 9 at

The busy diplomacy shows Xi’s efforts to grab world leadership from the US as US retreat in the world is giving China the opportunity to win. Japanese PM Abe in particular has failed sadly to persuade Trump to return to the Trans-Pacific Partnership (TPP) and has now to focus on ASEAN + three (China, Japan and South Korea), where China will certainly be the leader.

Under such circumstances, China may not allow the US to defeat it in trade war or how can China make others believe that it is a real rival to the US?

Comment by Chan Kai Yee on Reuters’ reports

Japan Wants to Improve Ties with China by Joining Belt and Route

Prime Minister Shinzo Abe expressed Japan’s interest in cooperating with China on the initiative in December. Photo: AFP

SCMP says in its report “Japan warms to China’s belt and road plan with talks on business tie-ups, sources say” yesterday, “Japan may soon become more involved in China’s multibillion-dollar belt and road plan, with the two countries expected to begin exploring business cooperation deals in third countries, according to diplomatic and trade sources.”

Japan has become prosperous thanks to globalization. Now the US advocates protectionism while China enthusiastically advocate globalization. Which economic power is more important for Japan now? The answer is very clear. Moreover China has a market larger and growing faster than the US.

Japanese Prime Minister is very shrewd, but still lackx the resourcefulness to balance his conflicting desires:

Politically, he is not happy with China’s rise as a strong China always wants Japan to repent about the war crimes Japan committed when it invaded China, especially, his beloved grandfather is regarded by China as a war criminal.

Economically, however, he hopes that the ever growing Chinese market will provide Japan the opportunity to recover its stagnant economy. However, Japan’s exploitation of Chinese market will make China economically stronger, which is the essential factor of China’s political power. I don’t think Abe is so stupid as to believe, economical, political and military strength can be separated.

However, Reuters’ source, the anonymous diplomat, is naïve. He talked about Western countries concerns about China’s geopolitical intention in Belt and Road initiative.

Whatever China’s geopolitical intentions, its Belt and Road will greatly enhance its geopolitical influence in the world. Intention does not but the results count. However, if that is Western countries’ real concerns, they shall participate in China’s Belt and Road so that their geopolitical influence will grow along with China’s.

For Japan, it will certainly benefit from China’s globalization and be harmed by US protectionism. The US is obviously ceding the Chinese market to Japan and other countries. Japan will be benefited the greatest due to its geographical and cultural closeness to China.

Abe has tried hard to use the US to balance China but disappointed by US President Trump’s withdrawal from TPP. He shall see that the US is doomed to decline due to its protectionism while other major Asian countries Japan, Russia, South Korea and India will grow along with China. They will provide more than enough balance to China. It then depends on who is more skillful in playing the diplomatic balancing game.

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

Why Is Quad Encirclement Inferior to China’s Encirclement of India?

Quad encirclement of China is a military encirclement. China’s gifted military strategist Sun Tze says, “If your troops are ten times of your enemy’s, then encircle it.” It means in modern warfare that one shall have overwhelming military superiority to encircle one’s enemy.

That is military encirclement and quad is precisely a military one as without participation of Russia, ASEAN, South Korea, Central Asia, etc. it is utterly impossible for India, the US, Japan and Australia to encircle China geopolitically or economically.

The Trans-Pacific Partnership may encircle China economically to its east and southeast but only partially not fully and China can counter TPP with its free trade agreements with the countries in that area including TPP members.

Now, US President Trump has already scrapped TPP and begun a trade war with almost all other countries, He may end up in having the US encircled economically in the world.

Militarily, the four quad members the US, India, Japan and Australia obviously lack the overwhelming superiority to China and its de facto ally Russia; therefore, the encirclement is meaningless.

China’s encirclement of India is a geopolitical one instead of a military one. China has no intention to take any land from India by force. That has been proved by China’s retreat and return of captured Indian troops and weapons in its previous triumphant war with India.

India has already been sandwiched by Pakistan and its iron brother China geographically. Now China’s Belt and Road initiative has been drawing Sri Lanka, Maldives and Nepal from India’s geopolitical influence. China has increasingly great geopolitical superiority to encircle India, which India is utterly unable to break however much military support it can get from other quad members.

Article by Chan Kai Yee

Peru defends China as good trade partner after US warnings

Peru’s Foreign Trade and Tourism Minister Eduardo Ferreyros gestures to media after Trans-Pacific Partnership (TPP) talks during APEC Summit in Danang, Vietnam, November 9, 2017. REUTERS/Kham

Marco Aquino February 7, 2018

LIMA (Reuters) – Peru’s trade minister defended China as a good trade partner on Tuesday, after U.S. Secretary of State Rex Tillerson warned Latin American countries against excessive reliance on economic ties with the Asian powerhouse.

Eduardo Ferreyros said Peru’s 2010 trade liberalization deal with China had allowed the Andean nation of about 30 million people to post a $2.74 billion trade surplus with Beijing last year.

“China is a good trade partner,” Ferreyros told foreign media, as Tillerson met with President Pedro Pablo Kuczynski in Lima, a stop on Tillerson’s five-nation Latin American tour. “We’re happy with the results of the trade agreement.”

The remarks were the Peruvian government’s first signal since Tillerson’s warning that it does not share Washington’s concerns about growing Chinese influence in the region.

Before kicking off his trip to Latin America on Friday, Tillerson suggested that China could become a new imperial power in the region, and accused it of deploying unfair trade practices.

“I appreciate advice, no matter where it comes from. But we’re careful with all of our trade relations,” Ferreyros said, when asked about Tillerson’s remarks.

Ferreyros also praised Peru’s trade relationship with Washington, despite a trade deficit with the United States. “I‘m not afraid of trade deficits,” Ferreyros said.

Since China first overtook the United States as Peru’s biggest trade partner in 2011, thanks mostly to its appetite for Peru’s metals exports, bilateral trade has surged and diplomatic ties have tightened.

Kuczynski, a former Wall Street banker, made a point of visiting China before any other nation on his first official trip abroad as president in 2016.

Under former president Barack Obama, the United States had hoped to counter China’s rise in the fast-growing Asia-Pacific region, which includes large parts of Latin America, with the sweeping Trans-Pacific trade deal known as the TPP.

While President Donald Trump withdrew the United States from the TPP upon taking office, the 11 remaining signatories, including Peru and Japan, have struck a similar deal that they plan to sign without the United States in March.

Tillerson, who left Peru for Colombia on Tuesday, said on Monday that Trump was open to evaluating the benefits of the United States joining the so-called TPP-11 pact in the future, which Ferreyros called “a good sign.”

All countries in the Asia-Pacific region, including China, were welcome to join TPP-11, Ferreyros said. “But the deal has closed and countries that want to join obviously can’t renegotiate the whole agreement,” he added.

Reporting By Marco Aquino, Writing By Mitra Taj, Editing by Rosalba O’Brien

Source: Reuters “Peru defends China as good trade partner after US warnings”

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

The Quad gets together again

Jeremy Goldkorn  November 13, 2017

Will the Trump Administration’s Indo-Pacific dream last?

The Trump administration has resuscitated the term Indo-Pacific — a description that sounds less Chinese than Asia-Pacific. Another old name has been revived: The Quad, or Quadrilateral Security Dialogue, a meeting of officials from India, Japan, Australia, and the U.S., initiated in 2007, accompanied by joint military exercises. The Quad members have not met again as a foursome until this last weekend.

Then as now, China is the unspoken target:

  • The Japanese Ministry of Foreign Affairs says that senior diplomats from Japan, Australia, India, and the U.S. met in Manila on November 12, and “discussed measures to ensure a free and open international order based on the rule of law in the Indo-Pacific.” All four countries released similar statements, although the Indian version did not explicitly refer to “freedom of navigation.”
  • Indian PM Narendra Modi met Trump in Manila. The White House website says they discussed “their shared commitment to a free and open Indo-Pacific region,” and their resolve to partner to ensure that “the world’s great democracies should also have the world’s greatest militaries.”
  • Trump also met with Australian PM Malcolm Turnbull and Japanese PM Shinzo Abe, and per the White House on November 13 in Manila, the three leaders “underscored the importance of working together to promote a free and open Indo-Pacific region.”

Some views on the Quad:

  • From Beijing, a researcher at the Center for China and Globalization says, “China needs to as soon as possible deal with the Indo-Pacific alliance, as it is absolutely in conflict with Belt and Road,” according to Reuters.
  • Chinese Foreign Ministry spokesperson Geng Shuang 耿爽 said rather diplomatically that “the relevant proposal should be open and inclusive and…avoid politicizing or excluding some relevant parties,”according to The Hindu.
  • Writing in the nationalistic Chinese newspaper Global Times, Geoff Raby — former Australian ambassador and now CEO of a Beijing consulting firm — argues more strongly that joining the Quad “is not in Australia’s national interest”: “Recognizing that Australia is more dependent economically on China than any of the others, and by a big margin, it is curious why Australia would want to join a group that China sees as hostile to its interests.”
  • In India, not everyone is convinced the Quad is a good idea: In The Wire, Manoj Joshi says that given the “intense and almost violent conflict of ideas within the U.S. about who and what America is all about…it would be hazardous to depend on the U.S. for an effective leadership of the coalition needed to balance China.”
  • Former Australian national security adviser Michael Shearer tells a sympathetic history of the Quad, which argues that the “four countries should develop a robust annual exercise program to build interoperability, capability and ultimately deterrence in the region.”


Explicit rejection?

Much of the analysis of Trump’s trip to Asia concludes that he leaves behind a region that is uncertain of U.S. commitment to its allies and to global leadership while China rises inexorably under the steely-eyed leadership of Xi Jinping. But the story is more complex:

  • Ely Ratner of the Council on Foreign Relations tweeted: “Way too simple to see U.S. isolation as only big story in Asia this week: Remember the two most important happenings in region — TPP11 and revival of Quad — both explicit rejections of China-led future.”
  • TPP11 refers to a comprehensive trade pact that Trump withdrew from as one of his first presidential acts. The 11 other nations have renewed their commitment to it and renamed it the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

Source: SubChina “The Quad gets together again”

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