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Trade

The United States is past engaging with China

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Author: Kanishka Jayasuriya, Murdoch University

The executive order by US President Donald Trump blocking Chinese tech giant Huawei from the United States is an aggressive unilateral step under the guise of national security. It deals another blow to China as a potential strategic technology competitor to the United States and follows in the wake of the 25 per cent US tariff on a broad swathe of Chinese goods.

This is more than a resetting of the trade relationship between China and the United States. US policymakers have sought to engage and integrate China into the global economy via global trade rules and institutions since the 1980s.

Past US administrations based their China policies on the assumption that China’s economy will move to a more liberal market order via institutional adjustments imposed through global rules. These strategies led to a complex and intertwined relationship between the United States and China. The changes signalled by Trump’s executive order reflect a post-engagement policy supported by the US security community. A significant element of this post-engagement policy is the overt disregard for the WTO rules which have been a US political project since the Cold War.

A key element of this post-engagement policy is the the reconfiguration of security and economics within both trade and strategic policy. The integration of China into the economic order was originally premised on the primacy of a US-based security order in the Asia Pacific. This has been challenged on two fronts. One is the emergence of Chinese political and economic projects such as the Belt and Road Initiative, seen as a challenge to US dominance. The other is the strategic assertiveness of the Chinese military, particularly in the South China Sea.

These Chinese economic–political projects are rooted in distinctive patterns of Chinese capitalist transformation and internationalisation. The United States is now competing by implementing its own political projects on infrastructure, connectivity and trade, with US security agencies combining to promote those particular forms of economic integration that are directly linked to security interests.

The policies of the Trump administration are a response to the domestic political failures of using engagement strategies to manage the various ups and downs of the US–China relationship, such as the Trans-Pacific Partnership and its security counterpart, the ‘Pivot to Asia’. The policies overturn the instruments through which previous strategies of engagement were conceived and executed. The reconfiguration of the relationship between economics and security is at the core of this post-engagement management. This relationship has always been shaped by domestic US politics.

The recent executive order is emblematic of this post-engagement strategy, reshaping the US–China relationship by eschewing the use of international legal rules. The new strategy is in favour of the unilateral use of coercive domestic-based policy instruments such as sanctions, the use of the ‘national security’ doctrine and…

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Trade

Getting Vietnam’s economic growth back on track

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Vietnam’s economy grew 8% in 2022 but slowed in 2023 due to falling exports and delays in public investments. The economy’s future depends on structural reforms and reducing dependency on foreign investment.

Vietnam’s Economic Roller Coaster

After emerging from COVID-19 with an 8 per cent annual growth rate, Vietnam’s economy took a downturn in the first half of 2023. The drop was attributed to falling exports due to monetary tightening in developed countries and a slow post-pandemic recovery in China.

Trade Performance and Monetary Policy

Exports were down 12 per cent on-year, with the industrial production index showing negative growth early in 2023 but ended with an increase of approximately 1 per cent for the year. Monetary policy was loosened throughout the year, with bank credit growing by 13.5 per cent overall and 1.7 per cent in the last 20 days of 2023.

Challenges and Prospects

Vietnam’s economy suffered from delayed public investments, electricity shortages, and a declining domestic private sector in the last two years. Looking ahead to 2024, economic growth is expected to be in the range of 5.5–6 per cent, but the country faces uncertainties due to geopolitical tensions and global economic conditions.

Source : Getting Vietnam’s economic growth back on track

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Thailand’s post-pandemic economic recovery still trailing behind

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Thailand’s economy is struggling to recover from the impact of the COVID-19 pandemic, with slow growth in GDP and GDP per capita. The government has implemented short and long-term policies to address economic challenges.

## Thailand’s Economic Slowdown

Thailand’s real GDP and GDP per capita have yet to outpace pre-pandemic figures, unlike other ASEAN countries. The Thai economy was severely affected by the pandemic, causing a slow economic recovery. The country’s large informal economy and dependence on tourism made it particularly susceptible to the impacts of the pandemic. While economic growth in 2023 was driven by activities in the travel sector, the manufacturing sector continued to contract, and merchandise exports continued to decline.

## Government’s Economic Policies

The new government’s short-term economic policies include providing a one-time digital cash payment to approximately 50 million residents, debt relief measures, and efforts to cut energy and electric train costs. Long-term economic measures consist of new free trade agreements, green industry projects, and a land bridge project. However, these measures have faced criticism from Thai economists due to significant fiscal implications and rising public debt-to-GDP ratio.

## Challenges in International Trade and Industrial Policies

Thailand’s new government is looking to boost international trade through free trade agreements. However, concerns are raised regarding the effectiveness of FTAs in driving global value chains and boosting trade. Additionally, industrial policies that emphasize domestic value added are being reconsidered in light of evidence that it runs counter to development from engaging in global value chains. The success of Thailand’s economic growth goals will depend on how supply-side constraints are addressed and resolved.

Source : Thailand’s post-pandemic economic recovery still trailing behind

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The United States and China’s complex cooperation and rivalry continue

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The US-China relationship in 2023 had complex economic and technological dynamics. While trade remained substantial, there’s also intensified technological competition, as both countries seek to enhance communication and cooperation in 2024.

Economic and Technological Dynamics

The world has witnessed a complex tapestry of economic and technological dynamics between the United States and China, with 2023 marking a period of continued economic interdependence and technostrategic rivalry. Despite a nominal dip in US imports from China, bilateral trade volumes remained substantial. US exports to China totalled US$135.8 billion and imports stood at US$393.1 billion for January–November 2023.

Economic Relations and Tensions

Policymakers, cognisant of the perils inherent in economic decoupling, have started to eschew such a course. High-level meetings and initiatives offered a positive glimpse of potential bilateral relations. In contrast, the high-tech landscape in 2023 was tense. The United States reinforced its global stance against China’s ascendancy, supported by US political parties.

Future Prospects

Moving into 2024, the US–China economic and technological relations are poised to undergo a shift, characterised by enhanced communication, selective cooperation, and balanced management of both interdependence and competition. There is a mutual understanding among senior officials of the potentially devastating repercussions associated with misunderstandings and miscalculations in the US–China relationship. 2024 is expected to witness increased economic dialogues between Beijing and Washington.

Source : The United States and China’s complex cooperation and rivalry continue

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