China should remain cautious over softened Trump trade tone

US President Donald Trump softened his trade tone with China when he tweeted Sunday morning, “President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!”

Trump’s latest China tweet revealed a lighter tone while being respectful to Chinese President Xi Jinping and China. Meanwhile, Trump’s attitude on the Sino-US trade war is still vague.

Not only did Trump voice his expectations for China to “take down Trade Barriers,” but also indicated the two countries make a deal on “Intellectual Property,” seemingly proposing that both sides should take a step back.

Reducing the trade deficit and demanding that China respect US intellectual property are the two major points Washington has cited as reasons for the new trade war.

On April 4, Trump’s stance on Sino-US trade relations was much harsher. In reference to the trade deficit and intellectual property concerns, Trump tweeted, “We cannot let this continue!”

Three renowned trade experts recently told Global Times they couldn’t figure out the motivation behind the more polished language in Trump’s latest trade tweet, and whether it indicates an attitude change on trade, or is a move aimed at alleviating recent stock market jitters and public discontent.

It is worth noting that China said recent negotiations among trade officials from both countries have not happened. This news alone caused panic throughout US investment communities.

Several major financial indexes have been falling since the China-US trade dispute first started to escalate. Meanwhile, Trump has faced criticism within the Republican Party, and opposition voices in the agriculture and automobile industries are getting louder – trends that are unfavorable to the White House.

All things considered, Washington did not expect such strong reaction from China following the Section 301 investigation into China’s trade practices, which has caused incredible discomfort for the Trump administration.

The White House wanted to use the new tariffs as a way to pressure and sideline China. With the support of right-wing media, the Trump administration tried to create a narrative where negotiations were underway, and Beijing would succumb to US demands.

As the possibility of a China-US trade war increases, American pessimism is on the rise. It seems Trump is hoping to inspire the American public with his latest trade tweet.

In speaking with the Global Times, scholars have mentioned the multitude of information and opinions are part of America’s political culture. Since the China-US trade friction began, part of Washington’s tactic has been to change tones erratically, ranging from “war cry” to using a more careful language. However, we can conclude that Beijing’s strategy by sticking to its principles regardless of room temperature has proven to be an effective strategy.

Many Westerners believe Beijing cares more about its image and reputation than anything else. The Chinese would like to step back, but only if a proper opportunity presents itself. In fact, as trade issues significantly impact China’s future development, its interests remain the most important things to consider.

When it comes to resolving issues, establishing economic development has always been China’s fundamental approach. Therefore, China’s clear self-understanding will always find consistent support.

It is essential for the White House to adopt a fair attitude and understanding toward Sino-US trade. Furthermore, it is a transition that is expected from the business community and the public on both sides.

Source: Global Times

 

‘Robust reply’ needed to US trade peeves

China has become increasingly impatient over US officials’ misleading statements about trade imbalances between the two countries and is watching closely for any measure from the US that could hurt Chinese interests, according to two advisors to the Chinese government.

China should no longer engage in a war of words with the US over misleading trade numbers claimed by US officials and should instead prepare a robust response to US protectionist moves, said the two advisors, who are affiliated with China’s Ministry of Commerce (MOFCOM).

During a regular press briefing in Beijing on Tuesday, Geng Shuang, a spokesperson for China’s Ministry of Foreign Affairs, warned that China would match the US list of potential trade measures against China.

“The US side has a list, so does the Chinese side,” Geng said, as he reiterated China’s long-held stance that China would not start a trade war, but would not be afraid of one either.

The comments came as trade tensions between China and the US escalated in recent weeks after the US imposed hefty tariffs on steel and aluminum imports and announced potential protectionist measures against Chinese products, drawing a harsh response from China.

China on Tuesday imposed tariffs on $3 billion worth of US goods. The back-and-forth has sparked widespread fears of a potential trade war.

Misleading trade data

But as negotiations are underway between Chinese and US officials, China is increasingly impatient over claims by US officials of exaggerated trade numbers and unreasonable demands.

A recent report from Deutsche Bank showed that US trade data overlooked US companies’ interests in China and that US officials had grossly exaggerated its trade deficit with China.

Citing official US data, the report pointed out that US firms sold $372 billion worth of goods in China in 2015, including $223 billion by subsidiaries in China, which is not accounted for in the US export totals, while Chinese firms sold $402 billion of goods and services to the US in total.

That comes down to a $30 billion deficit for the US, according to the report, which was released on Thursday. That is an extremely low number compared with the $365.7 billion deficit claimed by US officials.

The report noted that US companies such as General Motors and Apple Inc have become more dependent on the Chinese market. In 2017, General Motors sold 4 million cars in China, mostly through its Chinese branch, a lot more than the 3.6 million in the US, while Apple’s user base in China reached 310 million, twice as many as in the US.

“The most damaging retaliation from China would be to punish US business interests in China,” said the Deutsche Bank report.

More than trade deficit

Li Yong, a senior research fellow at the China Association of International Trade under MOFCOM, one of the two aforementioned advisors, said that Chinese and US officials have long discussed the discrepancies in their trade data calculations, but US officials showed no concern over adopting outdated methods, and had used misleading numbers to pressure China.

“There is no need for never-ending talk about the numbers. We will look at their actions and respond strongly,” Li told the Global Times on Tuesday. “It’s quite clear that the US’ intention was not just to address the trade imbalance, but also to constrain China, because China’s rise poses competition for the US.”

Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation under MOFCOM, the other advisor as mentioned above, also said that the US government is not looking after its companies’ interests; instead it was putting their nationalistic goals first.

While reiterating that China is open to negotiations at the press briefing on Tuesday, Geng, the Foreign Ministry spokesperson, also urged the US to be respectful and avoid coercive tactics.

“Negotiations must be conducted with mutual respect and equal treatment. It’s not about one side being unilaterally coerced by the other… It’s not about asking for sky-high prices and importunate demands,” he said.

Source: Global Times

Enterprises say they will look for goods to replace US products

China suspended tariff concessions on 128 US products including pork and fruits starting April 2, according to the Ministry of Finance. The tariffed American goods will value to $3 billion based on statistics in 2017.

Before the decision became official, it was supported by the Chinese public, with a lot of people mailing or calling the Ministry of Commerce (MOC) to show their support. Some of them even suggested that the measures should be tougher at the time when the ministry was soliciting public opinions, said a spokesperson of the MOC.

Li Yong, president of China Association of International Trade, said China’s retaliatory measures were taken according to the principle of reciprocity under the trade rules of the World Trade Organization.

The list of items does not cover larger-scale US products, indicating both China’s restraint and determination for retaliation, Li said.

A Carrefour store in eastern Beijing has not yet raised prices of US fruits and nuts as of April 2. The domestic supplier, based in Guangzhou, said it will communicate with the US supplier about strategic price adjustments.

“We haven’t raised our prices on the first day of tariff increases. We are negotiating with our US suppliers, hoping they could make some compromises,” said a marketing manager of the company surnamed Huang.

Huang said he doesn’t expect a trade “war”, which will increase costs and lower profits for his company. But he also said if the war is on, his company will consider replacing products that they use which are from US brands with products from Thailand, Vietnam and even domestic brands.

“We understand our country’s retaliatory measures and as Chinese we don’t want our country’s interests to be hurt by other countries,” he said.

Besides fruits and pork, 33 items on the list were steel products, mainly stainless steel tubes.

The China Iron and Steel Association (CISA) had urged the government to take tough measures to prevent the domestic market from being hurt by US-imported steel when the latter announced the Section-232 investigation.

An employee with the CISA said a public announcement has yet to be made, while an employee with Taiyuan Iron and Steel (Group) Co., Ltd who preferred his name undisclosed said China’s tariff measures on US products will inject confidence into domestic industries.

According to statistics provided by marketing organization LangeSteel.com, in 2017, the US exported 83,600 tons of steel products to China, in which stainless steel tubes weighed 18,800 tons, 22.4 percent of the total volume.

Xu Liying, an analyst with LangeSteel.com, said stainless steel tubes were chosen as the main item for tariff retaliation because they were the main type of US products exported to China, in terms of the volume and the value.

In 2017, US steel products worth 567 million yuan were imported to China, and the value of stainless steel tubes was 115 million yuan, Xu said.

She added that the total volume of stainless steel tubes exported to China from the US is not large. In 2017, China’s import value of stainless steel tubes from the US accounted for only 10 percent of the country’s total stainless steel tube imports.

Therefore, Xu thinks the new tariff measures will not have big impact on domestic enterprises, suggesting them to use products from other countries in order to replace US products after the new measures are implemented.

China’s ban on imported waste to spur global environmental campaigns

China’s recent ban on imported waste has aroused broad international attention. Some countries which are no longer able to dispose such huge amounts of trash even criticized China groundlessly.

However, justice always prevails as there are also rational voices supporting China saying the world should be grateful to China since this current move to ban waste will spur large-scale global environmental campaigns.

At present, China is a major destination for the world’s waste. The United Nations Commodity Trade Statistics Database indicated that over 70% of the world’s plastic waste and 37% of the world’s paper waste ended up in China in 2015, while Europe and the US were the major sources of such waste.

Paris Match Belgique reported that about 2/3 of the trash produced by Europe were recycled, and the rest went to China. Each year, China imported nearly 50 million tons of waste, including 9 million tons of waste plastic.

The UK has exported a total of 2.7 million tons of waste plastic since 2012, 2/3 of the country’s total trash volume, said The Guardian.

However, China is gradually changing the current situation, and its ban on imported waste has forced the western world to take new measures on garbage disposal.

A Paris Match report said that the ban will change the face of the world’s recycling industry, and that garbage classification methods will be further segmented in the future.

Some of the developed countries have already enhanced their garbage classification methods in order to meet China’s increasingly strict standards on waste imports. The US has even started utilizing artificial intelligence technology to sort some forms of trash, said Frank Brill, a US expert environmental lobbyist.

Erik Solheim, Executive Director of the United Nations Environment Programme noted that China’s ban is a signal for wealthy countries to strengthen their recycling systems.

The impact of the ban on trash exporters is self-evident, said Financial Times, adding that the European Union (EU) is likely to make a quick response and put a levy on plastic bags.

On Jan. 23, the EU issued its first plan on plastic waste disposal, aiming to make all packaging reusable or recyclable by 2030.

The UK has also pledged to eradicate all avoidable plastic waste by 2042 as part of the government’s 25-year plan to improve the natural environment.

“Though the effect of garbage disposal is not immediate, China has made valuable attempts,” some media commented.

As a matter of fact, the transfer of polluting industries from developed countries to less-developed countries is not something unique to China. For example, the rivers of Bangladesh have also been polluted by waste water discharged from local textile factories and there are many more similar stories around the world.

China’s ban on imported goods will probably change the current situation. Spanish newspaper El País believes that the ban will help reduce environmental pollution and enhance China’s recycling industry.

China’s 2018 economic growth predicted at 6.8 percent: major state-owned banks

China’s GDP growth for 2018 is forecasted at around 6.8 percent, according to a report from the Institute of International Finance of Bank of China (BOC) on March 28, China News Agency reported.

The growth was predicted at 6.7 percent by BOC at the end of 2017. Forecasts for the country’s GDP growth in the first quarter of this year put it at 6.9 percent, while in the second quarter it may be around 6.8 percent.

Growth in industry, consumption, investment and export, key economic area indicators, speed up in the first three months of this year, influenced by strong exterior demands, growth of new drivers, and the picking up of real estate sector and private investment.

In the second quarter, the country’s economy will grow steadily, with new growth drivers continuing to emerge and rapid growth, and consumption gaining policy support, said Zhou Jingtong, a senior researcher with the international finance institute of BOC.

In Pics: World’s first ring high-speed railway in southern China

Photo shows the 653-kilometer-long ring high-speed railway in Hainan province of southern China. The line runs along almost all the important cities and famous landscapes in the province. The rail began operation at the end of 2015 and transported 25 million passengers in 2017. The rail has tackled many technical difficulties including prevention of sea water erosion, high temperatures and humidity, as well as thunders and earthquakes.

Shanghai aims at being Belt and Road investment and financing center

Shanghai will strive to become an investment and financing center of the Belt and Road Initiative by actively pushing forward reform and innovation of free trade zones (FTZs), said chief economist of the Shanghai Development and Reform Commission, Xinhua News Agency reported on March 27.

If financial risks are controllable, the city will further improve its ability to serve the Belt and Road Initiative financially and build itself into a global financial service center with a focus on renminbi-denominated financial products, said the economist Qin Liping, at a seminar of Belt and Road Initiative financial services on March 27.

By the end of 2017, Shanghai’s Cross-border Interbank Payment System (CIPS) had already attracted 508 indirect participators from 41 countries and regions. The second phase of the CIPS was launched in Shanghai on March 26 to promote the global use of the Chinese currency as well as the Belt and Road Initiative itself.

Financial integration is an important aspect of the Belt and Road Initiative. By the end of 2017, a total of 288.6 billion yuan worth of transactions between China and countries and regions along the Belt and Road have been handled via free trade accounts.

Shanghai is actively taking measures to draw more financial institutions to join the construction of the Belt and Road, and strengthening financial ties with countries and regions along the Belt and Road, said Li Jun, deputy head of the Shanghai Municipal Financial Services Office.

The city will also build a reserve warehouse for major Belt and Road projects, and establish a global risk management platform to involve more parties into managing risks for Belt and Road projects, said Zhong Gang, President of China Development Bank (CDB) Shanghai Branch.

This year, Shanghai will extend the range applicable entities for free trade accounts to more enterprises in need, including entity companies involved in the construction of the Belt and Road as well as companies with demand for international settlements and financing.

Yale University graduate works overnight to promote trade facilitation in Sichuan

Yale University graduate Alexander J. Cohen is a project manager with the Chengdu Administration China (Sichuan) Pilot Free Trade Zone, which is a government organ.

Alexander J. Cohen (left) at work

Different from China’s public servants, Cohen and his colleagues were recommended by third-party agencies during global recruitment activities.

Cohen, majoring in economics, first came to Chengdu in 2010 and worked for a consulting firm for overseas study. Speaking fluent Chinese is his advantage in job hunting.

Cohen expressed his support for China’s globalization during a job interview. “I’m excited to be part of China’s efforts to find a place in economic globalization,” he said to the interviewer.

Last October, he officially became a member of the international cooperation office with the Chengdu Administration China (Sichuan) Pilot Free Trade Zone.

Coordinating investment and cooperation as well as promoting trade facilitation for Chengdu demands Cohen and his co-workers to carry out careful and in-depth investigations.

To prepare for an important meeting, he once worked in the office until four in the morning. Now he is working on a global science and technology park partner plan, which requires frequent negotiations with partners.

“I have 1,422 friends on WeChat and I met most of them at work,” he said.

Cohen works in a group of 14 people who are all in their 30s. They either have studied overseas or graduated from prestigious Chinese universities. “They are very good at English, and their professional competence is impressive,” Cohen said.

A few highlights regarding his co-workers, according to Cohen, include that they are very sensitive to global information, knowledgeable of the latest trends and very efficient.

Li Xue, an official with the Chengdu Administration China (Sichuan) Pilot Free Trade Zone, said the new way to recruit foreign talents is an attempt to the reform and make innovations within the process of introducing talent.

Foreign talents can more efficiently communicate with foreign governments and enterprises that are involved in lots of projects, and they will help produce new ideas that are conducive to international trade, Li said.

Drone delivery officially takes off in China

China’s first operating license to allow experimental drone deliveries was granted to courier SF Express on Mar. 27.

A drone of SF

The company has become the first in China to carry out commercial operation by means of drone deliveries in pilot zones.

Wang Wei, president of SF Express came up with the idea of delivering parcels via drone back in 2012, hoping to establish a nationwide logistics network that will make possible completion of deliveries anywhere in China within 36 hours.

Different from most logistics companies who rely on drones for “last mile” needs , SF aims more at long-range transportation.

The company has a relatively larger and more complex drone system, and its unmanned aerial vehicles (UAV) can cover ranges from tens of kilometers to more than a hundred kilometers, carrying cargos weighing several kilograms to tens of kilograms.

For instance, a UAV exclusively developed for SF Express by a Chinese drone maker has a wingspan of 13 meters and length of 12 meters. It is able to cover 2,000 kilometers and carry 1.5 tons of cargos at a speed of 260 kilometers per hour.

A fixed-wing drone of SF

In the short term, SF Express is not likely to conduct drone-to-users operations, and the UAVs will be mainly used to delivery between different logistics centers.

In the pilot zones, the major task of the drones is to enhance delivery services in those remote areas with complex topography while at the same time improving the company’s logistics efficiency.

E-commerce giant JD.com is expected to be the next enterprise to get operation licenses after SF Express.

In 2016, JD.com established a special department to develop its drone delivery business, with a plan to build a drone logistics network covering both trunk and regional lines, as well as the “last mile” distribution.

In addition, the company has partnered with technology firm Nvidia to deploy one million logistics drones in China over the next five years.

Chairman of JD.com Richard Liu said that the company will build over 10,000 drone ports across China, enabling customers to receive their orders within 24 hours.

The drone trend within China’s logistics companies stems from the bottleneck pressures mounting due to shortcomings in the traditional logistics industry. With the saturation of road traffic, traditional transportation is facing more and more restrictions. As a result logistics enterprises are seeing urgent demands to forge a more effective and faster system.

However, drone delivery is still facing several challenges, including safety and stability. Both risk probability control and assurance of safe operation during severe weather remain an issue yet to be resolved. Moreover, China is still exploring suitable policies to regulate this emerging industry.

China’s bomber H-6K designed to fly beyond island chains

China’s bomber H-6K is designed to fly beyond the island chains, said He Shengqiang, leader of the aircraft’s research and development team from the Aviation Industry Corporation of China.

He said that the mileage, payload capacity and reliability of the H-6K have all met expectations. But the designers will continue to optimize and improve the aircraft in order to give it more potential, he added.

He made these remarks during a recent interview with Xinhua News Agency in Xi’an, west China’s Shaanxi province.

According to He, the aircraft H6-K, which is an upgraded version of H-6, has been improved for longer range, payload capacity, and precision. Thanks to the inlet/engine matching, the power of the aircraft has been largely improved. In addition, the designers optimized the layout of its cabin, reducing the number of crew members and setting clearer roles for them.

Besides, the improved capability of information detection and confrontation capabilities is comparable to that of the third and fourth generation aircrafts.

He said that bombers are vital for aviation power and that they are important weapons that are a must-have for world-class armies and air forces.

China will not only be a designer of advanced bombers, it will also be a maker of technical standards and a leader of future combat patterns, he added.