China
US–China trade war : will there be a winner ?
The U.S. and China are hours away from a new round of tariffs on each other’s goods, with no improvement in relations between the two rivals in sight. Will there be a winner, or only two big losers ?
The U.S. and China are hours away from a new round of tariffs on each other’s goods, with no improvement in relations between the two rivals in sight.
In a significant escalation, $200 billion of Chinese products will be subject to increased tariffs from 12:00 p.m. Beijing time on Monday, on top of the $50 billion in goods already charged higher duties earlier in the year. The combined $250 billion in products facing levies is almost half the value of imports from China last year.
Meanwhile, $60 billion of goods from the U.S. will become subject to Chinese higher tariffs around the same time, adding to the $50 billion already levied. That’ll mean about 70 percent of the value of goods China bought from America in 2017 face tariffs.
There are three major explanations for why the United States began its recent trade war with China
United States wants to reduce its trade deficit
The first is that the United States wants to reduce its trade deficits. US President Donald Trump tweeted on 4 April 2018 that ‘[the United States has] a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!’. Many US commentators think that the gargantuan imbalance translates into an incremental increase in US indebtedness to China, which they consider to be a huge vulnerability for the United States.
The United States wants to slow China’s progress toward being a high-tech superpower
The second is that the United States wants to slow China’s progress toward being a high-tech superpower. The main sectors in China getting hit are machinery, electronics and IT technology. This is tantamount to the United States’ directly targeting Made in China 2025.
The final explanation is that ‘Trump favours highly transactional exchanges’ and wants an increased stock of bargaining chips. Trump may well have begun a trade war with China now so that he can relinquish it later in exchange for cooperation over perplexing political and security issues.
Whatever the cause, China has been bashed by the trade war. Over the last five months, the Shanghai Composite Index — a barometer of the Chinese stock market — has plummeted by approximately 18 per cent and the Chinese renminbi has depreciated nearly 8 per cent. Because China is still export dependent, the trade war will make Chinese export firms lose approximately US$22 billion and will cause unemployment, especially in China’s east coast.
China faces daunting domestic challenges
Even without the trade war, China faces daunting domestic challenges.
After years of work, China’s economic structural change is slowly progressing. China’s private consumption as percentage of GDP has been increasing since 2010, but it has not yet breached 40 per cent (compared to a US average of 68 per cent). China’s gross savings rate is more than 46 per cent of GNP against the United States’ 17.3 per cent.
Continued high national savings for a long time fully financed Chinese investment and sustained it at a very high level. Even today, China’s investment accounts for 44.4 per cent of GDP. This prolonged investment on a massive scale has created significant overcapacity in a range of sectors and has engendered much debt — part of which has become non-performing loans.
The trade war will only drive the renminbi to further depreciate
Amid China’s internal issues, the trade war will only drive the renminbi to further depreciate. In recent months, Beijing has taken a series of monetary and fiscal initiatives to boost lending and restructure debt.
These initiatives may ameliorate the situation in the short term, but solving the problems completely and successfully will take much longer than expected. If the trade war lingers on until the end of 2018 or even till 2019, market sell-off pressure on the renminbi will likely increase. In addition, US economic indicators look sublime and the almost-inevitable interest rate raise will facilitate further renminbi depreciation.
The worst case scenario would be a persistent trade war coupled with US interest rate increases. This would elicit very negative sentiment and might cause large-scale capital flight from China.
But can the United States achieve the objectives it seeks from the trade war?
The United States cannot drive down or stop trade deficits for the foreseeable future. Anyone who understands balance of payments accounting knows that the sum of the current account and the capital account must equal zero. The United States has very flexible and liquid capital markets with highly credible governance, which lures countries with trade surpluses to export a large part of their excess savings to the United States.
In 2017, US net financial inflows stood at more than US$375 billion, and the capital account surplus exceeded US$400 billion. Further, in today’s trade regime, the capital account drives the savings account. Unless the United States can flip around its capital account surplus, overall trade deficits will remain huge.
Similarly, the United States will struggle to blight China’s Made in China 2025 initiative.
Technology innovation and investment are being promoted by the Chinese government.
There are now 1775 Chinese venture capital firms. China is determined to narrow the income gap between itself and the advanced countries. So a trade war aiming to refrain China from technological enhancement will ‘only strengthen Chinese leaders’ resolve to boost innovation and achieve technological supremacy, as they realise that they can’t rely on others’, as Joseph Stiglitz notes.
Finally, if Trump plans on using a trade war as a bargaining chip, he should know that China will not likely compromise, at least in the short term. Popular anger and national sentiment may well surge about the trade war, which would leave the Chinese government with little choice but to stand firm. China could use ‘strong sales of US brands’ as its own bargaining chip, but if the trade war lasts for more months and China’s economy continues to worsen, the US bargaining chips might increase in potency. Yet still, China could hardly give in to any conditions that violate its national interests.
The trade war will accomplish neither country’s objectives.
China and the United States need to install an effective communications channel, dispatch high-echelon officials who deeply understand each other, come to negotiations, and as Harvard economist Dani Rodrik suggests, ‘do not impose on other countries constraints that you would not accept if faced with their circumstances’.
Yuhan Zhang is an economist and independent researcher.
Who will be the winner of the US–China trade war? | East Asia Forum
China
Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
Foreign residents in China can request a criminal record check from their local security bureau. This certificate may be required for visa applications or job opportunities. Requirements and procedures vary by city. In Shanghai, foreigners must have lived there for 180 days with a valid visa to obtain the certificate.
Foreign residents living in China can request a criminal record check from the local security bureau in the city in which they have lived for at least 180 days. Certificates of no criminal record may be required for people leaving China, or those who are starting a new position in China and applying for a new visa or residence permit. Taking Shanghai as an example, we outline the requirements for obtaining a China criminal record check.
Securing a Certificate of No Criminal Record, often referred to as a criminal record or criminal background check, is a crucial step for various employment opportunities, as well as visa applications and residency permits in China. Nevertheless, navigating the process can be a daunting task due to bureaucratic procedures and language barriers.
In this article, we use Shanghai as an example to explore the essential information and steps required to successfully obtain a no-criminal record check. Requirements and procedures may differ in other cities and counties in China.
Note that foreigners who are not currently living in China and need a criminal record check to apply for a Chinese visa must obtain the certificate from their country of residence or nationality, and have it notarized by a Chinese embassy or consulate in that country.
Foreigners who have a valid residence permit and have lived in Shanghai for at least 180 days can request a criminal record check in the city. This means that the applicant will also need to currently have a work, study, or other form of visa or stay permit that allows them to live in China long-term.
If a foreigner has lived in another part of China and is planning to or has recently moved to Shanghai, they will need to request a criminal record check in the place where they previously spent at least 180 days.
There are two steps to obtaining a criminal record certificate in Shanghai: requesting the criminal record check from the Public Security Bureau (PSB) and getting the resulting Certificate of No Criminal Record notarized by an authorized notary agency.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
China Unveils Plan to Upgrade Industrial Equipment
China unveiled a comprehensive action plan for upgrading industrial equipment, with a focus on driving technological innovation and economic growth. The plan, released on April 9, 2024, aims to enhance competitiveness and sustainability within the manufacturing sector through extensive investment and regulatory support.
China announced an ambitious action plan for industrial equipment upgrading, which aims to drive technological innovation and economic growth through extensive investment and regulatory support.
On April 9, 2024, China’s Ministry of Industry and Information Technology (MIIT) and six other departments jointly released a notice introducing the Implementation Plan for Promoting Equipment Renewal in the Industrial Sector (hereafter referred to as the “action plan”).
Finalized earlier on March 23, 2024, this comprehensive action plan addresses critical issues related to technological innovation and economic development. It reflects China’s proactive stance in enhancing competitiveness and sustainability within its manufacturing sector. The initiative underscores the recognition of industrial equipment upgrading as a top policy priority.
The scope of China’s action plan to upgrade industrial equipment in manufacturing, is extensive, covering various aspects such as:
In line with China’s ambitious goals for industrial modernization and sustainable development, the action plan outlines several key objectives aimed at driving substantial advancements in the industrial sector by 2027.
These objectives encompass a wide range of areas, from increasing investment to enhancing digitalization and promoting innovation, including:
The objectives and key actions proposed in the action plan are summarized below.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
China deepens engagement with new Indonesian president as top diplomat visits Jakarta
China’s top diplomat met the outgoing Indonesian president and his successor in Jakarta on Thursday, as Beijing deepened its engagement with future leader Prabowo Subianto, amid a competition for regional influence with the United States.
The meeting with Chinese Foreign Minister Wang Yi was part of a joint commitment to advance the partnership between the two countries, said Prabowo, who visited Beijing in early April after his landslide win in the February general election.
“It is a great honor for me to welcome him [Wang] today. Thank you for the kind reception I received in Beijing a few weeks ago,” Prabowo said, according to an Indonesian defense ministry statement.
Chinese President Xi Jinping had invited Prabowo to visit, and the latter accepting the invitation raised eyebrows in Indonesia because no president-elect had made a foreign visit such as this one without being sworn in. China is Indonesia’s largest trading partner.
Wang, too, mentioned Prabowo’s Beijing trip, according to the same statement.
“We really appreciate and welcome Defense Minister Prabowo’s visit to China,” he said.
“We are committed to continuing to increase bilateral cooperation with Indonesia, both in the defense sector and other fields such as economic, social and cultural.”
Wang is scheduled to go to East Nusa Tenggara province on Friday to attend the China-Indonesia High-Level Dialogue Cooperation Mechanism, a process to support more effective bilateral cooperation. His Jakarta stop was the first of a six-day tour that also includes Cambodia and Papua New Guinea.
Prabowo and Wang discussed cooperation in the defense industry and sector, with potential measures such as educational and training collaboration, as well as joint exercises, said Brig. Gen. Edwin Adrian Sumantha, spokesman at the Indonesian defense ministry.
In fact, the ministry statement said that “China is Indonesia’s close partner and has had close bilateral relations, especially in the defense sector, for a long time.”
Of course, China has also invested billions of U.S. dollars in infrastructure projects in Indonesia, including as part of Beijing’s Belt and Road Initiative – the Jakarta-Bandung high-speed train, which began commercial operations in October 2023, is one such BRI project.
The two countries have drawn closer during outgoing President Joko “Jokowi” Widodo’s two terms, and Beijing would like that to continue as the U.S. tries to catch up with China’s gargantuan influence in Southeast Asia, analysts have said.
Indonesia, China call for ceasefire in Gaza
Both Indonesia and China shared the same position on Israel’s devastating attacks on Gaza, said Wang’s Indonesian counterpart, Retno Marsudi.
Israel’s air and ground strikes have killed more than 33,000 Palestinians following the Oct. 7 attack on the Jewish state by Palestinian militant group Hamas, which killed around 1,100 Israelis.
“We … have the same view regarding the importance of a ceasefire in Gaza and resolving the Palestinian problem fairly through two state solutions,” Retno told reporters in a joint press conference after meeting with Wang.
“Indonesia will support full Palestinian membership in the U.N. Middle East stability will not be realized without resolving the Palestinian issue.”
For his part, Wang slammed Washington for repeatedly vetoing resolutions calling for Israel to end the attacks on the Palestinian territory it occupies.
“The conflict in Gaza has lasted for half a year and caused a rare humanitarian tragedy in the 21st century,” Wang told the media at the same press conference, according to the Associated Press.
“The United Nations Security Council responded to the call of the international community and continued to review the resolution draft on the cease-fire in Gaza, but it was repeatedly vetoed by the United States.”
The conflict in the Middle East offered a strategic opportunity for China to further expand its influence in Southeast Asia, said Muhamad Arif, a lecturer in international relations at the University of Indonesia.
“China is trying to strengthen its position as a key player in the region,” Arief told BenarNews.
China could present an alternative approach to the conflict in Gaza, he said, which may find approval in Southeast Asia’s largest country, Indonesia, and other Mulism-majority states in the region, such as Malaysia and Brunei.
BenarNews is an RFA-affiliated online news organization.
Read the rest of this article here >>> China deepens engagement with new Indonesian president as top diplomat visits Jakarta
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