Commentary: “Anti-contract trap” brought by US puts world economy on hinge of disorder

Though the US made itself a rule-breaker of the international community every now and then in history, the country still astonished the world this time by abandoning the contractual spirit it had long labeled as its core social value.

The Donald Trump administration, under the banner of “America first”, is heading toward the “anti-contract trap” without any hesitation, placing world economy on a cliff of disorder.

It’s common sense that modern market economy is running on the basis of free-will contracts and credibility, and the spirit of contract has accelerated the economic globalization through both complementation and the movement of advantageous production factors.

Over the years, the developed and developing countries have already established a complete chain covering advanced technologies, cheap labor, and natural resources based on economic laws and the principle of free will, and the value of the chain has also been proved by its contribution to the world economy.

However, the chain is unreasonably denied by the White House who is making frequent fallacies that the current international rules are bringing losses to itself.

Even though the China-US trade is completely based on market rules, and the exchanges and cooperation between Chinese and US enterprises are conducted under commercial contracts, Washington still initiated the groundless Section 301 investigation and imposed tariffs on Chinese imports.

Such practice is not only a violation of international rules, but also a disrespect toward the contracts between major economic cooperation players. It broke commercial contracts, hindered global labor division and cooperation, and destroyed the credit mechanism of market economy.

The principle of fair competition is an important pillar supporting the development of market economy, and also a premise for the role of market to take effect. The administrative intervention in the legal and independent operation of enterprises will lead to disorders of both the market and resource allocation.

Over the past year, the US has put aggressive restrictions on foreign investment and voted down multiple mergers and acquisitions by foreign companies. It even stepped in the investment and operation of local and overseas enterprises, infringing upon their right to make choices independently.

For instance, the US pressured its local automaker Ford to alter its global strategy, and threatened Harley Davidson for the latter’s plan to move production overseas. Going against the principle of fair competition that the US had long adopted, such practices have disturbed the expectation of the market and the enterprises, as well as broken the smooth flow of cross-border capital.

Freedom, equality, openness, and inclusiveness are the traditional concepts about modern market economy, and also significant guidelines of economic globalization. By trampling the core values of politics and economy, the Trump administration is giving a rise to unilateral trade protectionism, isolationism, and populism.

Instead of finding the root causes of its own economic issues, the US is always passing the buck to other countries. Instead of admitting its own defects, the US is always skipping international organizations and putting the blame on others. Instead of shouldering its responsibilities as the only super power in the world, the US is always placing its domestic laws above international laws to export internal contradictions, as a result triggering global disputes and economic disorders.

The US administration turns a blind eye to the huge profits their companies reaped in China, while worrying that its dominance in the technology sector may be threatened by a “forced technology transfer”, a groundless accusation the US imposes on China.

The administration on one hand expects the job opportunists Chinese investment brings to their country, while on the other hand sets up barricades on the way of technology deal out of a concern that “their advanced technology and intellectual property may be acquired by others”.

What the US did, under the philosophy of maximized interests but no obligations, has severely hindered the legal and market-based trade investment, added uncertainty to business operation, and blocked the US’ road to attract foreign capital.

Such move will also exclude the US out of the big cake of global trade, and raise the consumption costs of US residents.

Everything excellent comes from good orders. A complete set of mechanisms, including international trade rules, has been established during the economic globalization process through long-term efforts and continuous collaboration, which is why the globalization is believed to benefit the world.

Order is indispensable to the giant system of world economy, just like sunshine and air are indispensable to lives. To safeguard international rules by the spirit of contract is a shared responsibility and obligation of each country.

According to a World Trade Organization (WTO) report on dispute adjudication, the US, as the largest economy of the world, is also the largest “rule-violator” among WTO members – 2/3 of the violations within the organization were committed by the country.

The US’ mentality to grab what is useful and abandon what can’t be exploited is a typical pragmatism, and also a type of short-sighted strategy.

Belt and Road countries attract Chinese students looking to study abroad

Chinese student Zhao Yunru (3rd from right) , who studies at University of Economics, Prague, has a discussion with her friends

Thanks to the current construction of the Belt and Road Initiative, Belt and Road countries are becoming more popular among Chinese students who decide to study abroad.

Statistics released by China’s Ministry of Education (MOE) indicate that 66,100 Chinese students chose to study in en-route countries in 2017, up 15.7 percent from the previous year.

China has been strengthening educational cooperation with Belt and Road countries since the initiative was put forward by Chinese President Xi Jinping five years ago. By the end of 2016, it had signed agreements of mutual recognition for degrees and diplomas with 47 en-route countries and regions, including the Czech Republic, Thailand and Russia.

The unique cultural heritage of countries as well as job opportunities brought about by construction of the initiative are important factors that attract students, explained Zhang Yunqian, market promotion supervisor at a branch of the New Oriental Education & Technology Group.

Most of the students say relatively low tuition fees and future job opportunities are leading factors that attract them to such countries. For example, the annual tuition fee at the Peoples’ Friendship University of Russia is between 40,000 and 70,000 yuan ($5,982 – $10,467), a teacher surnamed Qiao noted, adding that there are currently about 5,000 international students at the school, 700 coming from China.

Wang Fei, a Chinese student in Moldova, noted that the relatively low living cost, favorable public security and environment were also taken into consideration.

The advancing Belt and Road Initiative offers job opportunities for students still at university, Wang pointed out, saying that Chinese students based in Russia are in high demand to help translate for Chinese enterprises setting up branches there. Those who study in Belt and Road countries will not only have a better understanding of their current country, but also have access to their chosen discipline.

For example, Wang helps vintners in Moldova promote products in China by making use of relevant knowledge gained there, so more Chinese people are introduced to the quality wine at a reasonable price.

An employee at the Overseas Study Service Center of the MOE also disclosed that overseas Chinese students mastering languages from Belt and Road countries, as well as learning about the local culture and business etiquette, will have no problem finding work in China in the future as they will be in high demand.

China already finding replacements for US soybeans amid trade row: insiders

China is capable of dealing with the gap caused by reduced purchases of US soybeans amid the current trade friction and will find other sources, industry insiders said on Wednesday.

China has imposed tariffs on US soybeans, so there will be a sharp reduction in imports, but other sources are available, an unnamed expert from the National Grain and Oil Information Center was quoted as saying in the official People’s Daily on Wednesday.

As part of countermeasures against US tariffs, China imposed tariffs of 25 percent on American soybeans, which took effect on Friday. This will raise import costs by 700 yuan to 800 yuan ($104.9 to $119.9) per ton, so domestic companies will cut their purchases from the US, the expert noted.

Soybeans can be used to produce edible oil and grease and as an ingredient for animal feed.

“Brazil is already China’s largest supplier of soybeans, and Chinese imports of Brazilian soybeans will increase significantly as a result of the tariffs on US imports,” Rajiv Biswas, APAC chief economist at IHS Markit, told the Global Times on Wednesday.

Also, as some forms of oilseeds can also be used as substitutes for soybeans, there could be some switching toward other crops such as palm oil products, he noted.

“China has been importing too large a quantity of soybeans from overseas markets since 2012, and our feed formula could be adjusted to reduce consumption of soybeans,” Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultancy, told the Global Times on Wednesday.

China aims to cut soybean imports from 2018 to 2019, the first reduction in 15 years, domestic agriculture commodities website ncpqh.com reported in May, citing the Ministry of Agriculture. The import volume was forecast to decline 0.3 percent year-on-year during this period, to 95.65 million tons, but imports from Brazil are expected to reach a record high.

Some provincial governments have released measures to boost local soybean production in recent months. China’s northeastern provinces of Heilongjiang and Jilin have rolled out subsidies to encourage farmers to grow more soybeans, media reports said, with Heilongjiang set to increase the soybean cultivation area by 5 million mu (333,333 hectares).

Reduced dependence on US soybeans will also help the domestic industry, said Li Shihua, a farmer based in Harbin, Northeast China’s Heilongjiang Province. “Although imported soybeans have a high oil yield, this trade tension will force us to upgrade our technologies to meet growing domestic demand,” Li told the Global Times on Wednesday.

US farmers worried

The trade friction ignited by the Trump administration is worrying some US farmers. The US Soybean Export Council said it disagreed with resolving trade disputes by imposing tariffs, and the Chinese market is very important for the American soybean industry, according to a statement it sent to the Global Times on Wednesday.

“A trade war will end up with a no-win situation, and we do not want to see damage to the mutually beneficial cooperation between the US soybean industry and China’s livestock and poultry aquaculture, feed industry and soybean processing industry over the past 36 years,” the council noted.

Brazil surpassed the US to become China’s largest soybean supplier in 2017, exporting 50.93 million tons – 53.3 percent of China’s total soybean imports – according to Chinese customs.

“There’s no fundamental difference between US and Brazilian or Argentinean soybeans,” Ma said, noting that the trade tension will ultimately hurt US farmers as China seeks replacements.

State-owned grain trader Sinograin said it has not procured any soybeans from the US since April, and has shifted its focus toward South America, according to People’s Daily.

As soybeans are one of the US’ main exports to China, the situation will be a heavy blow for US soybean farmers and it could create a political backlash in some key states ahead of the US midterm elections in November, Biswas said.

Source: Global Times

 

Henan man risks life to save others in Thailand boat accident

Zhang Haofeng, a 30-year-old man from Henan Province, has been hailed as the real-life “Jack”from Titanic, for risking his own life to save others in a boat accident which took place in Thailand on July 5.

The man tried to save his girlfriend’s life along with those of three other tourists after two boats carrying 127 Chinese tourists capsized in rough seas near southern Thailand’s Phuket on July 5, but disappeared in the raging rapids himself.

Fortunately, he was saved by fishermen after floating in the sea for about 12 hours, and is now being treated in a Thai hospital.

When reporters reached out to him for further details, Zhang refused them politely.

His mother, Xu Su, told reporters that she worried a lot about her son when he went missing, adding that he has always been a kind-hearted person that strives to help others.

Endangered fish swim in Qinghai river

Naked carp swim during their spawning season in Quanji River, an inflow river of Qinghai Lake, northwest China’s Qinghai province, July 10, 2018. The naked carp is a native species of Qinghai Lake and is classified as endangered on the China Species Red List.

China confident it will win trade war

In stark contrast to the complaints and concerns in the United States, the Chinese people have adopted a very understanding and supportive attitude toward measures the government has taken, and are very confident that China will win the trade war.

The country is already prepared for a possible reduction in soybean imports from the United States, cancelling tariffs of three percent on soybean imports from Bangladesh, India, Laos, South Korea and Sri Lanka, to help substitute the American products.

China also confirmed it will give subsidies to corn and soybean producers in the northeastern provinces of Liaoning, Jilin, Heilongjiang and the Inner Mongolia Autonomous Region, in a package of policies released in April of this year to boost agricultural growth.

Experts think the impact of the U.S. trade war is controllable. The research team led by central bank economist, Ma Jun, found that the trade war, which involves $50 billion between China and the states, will slow China’s GDP growth by 0.2 percent, with full consideration of the second and third rounds of impact on related industries, according to Xinhua.

Zhao Changwen, director general of the Industrial Economy Research Department of the Development Research Center of the State Council, China’s cabinet, also believes that this round of tariffs will have a limited impact on both China’s economic growth and employment.

Li Yong, a senior fellow with the China Association of International Trade, said China has the confidence and capabilities to win the trade war, as its economic growth is steady and its industrial categories can drive the economy forward.

The country has strong impetus for innovation, Li pointed out. China’s investment in research and development accounts for 2.1 percent of the national GDP, not to mention that the country is the world’s second largest source of international patent applications.

Entrepreneurship is strong in China and new commercial activities are continuously creating new economic advantages, he said. In addition, the new round of reform and opening up will create a favorable external environment for the economy and help improve China’s foreign trade relations.

Chinese net users claim that China’s countermeasures are well-founded and their country will turn a crisis into an opportunity for development. China is not the creator of this trade war but is not afraid of it. They also say that development should be the country’s top priority and the key for China is to focus on its own affairs.

Responding to the trade war, China is not only safeguarding its own interests, but also those of its trade partners and countries supporting the multilateral trade system, said Zhang Jianping, researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

China levied countermeasure tariffs on select U.S. imports at 12:01 p.m. Beijing time, July 6, in response to the additional U.S. tariffs of 25 percent on Chinese goods worth $34 billion earlier the same day.

The Chinese Ministry of Commerce said China will unswervingly commit itself to deepening reform and expanding opening-up, protecting entrepreneurship, strengthening protection of intellectual property rights and creating a good business environment for foreign-invested companies in China.

Some enterprises in the U.S. have decided or are planning to transfer parts of their businesses out of the states in order to avoid possible impacts the protectionist trade policy may incur.

U.S. motorcycle company Harley-Davidson has announced plans to move part of its production out of the states, in a bid to cut additional costs caused by the tariffs on steel imports from its mother company in Mexico.

China to enhance cooperation with Belt and Road countries on ecological protection

China will strengthen cooperation with Belt and Road countries in regards to ecological protection and green development, said an official with the Chinese Ministry of Ecology and Environment, at the Eco Forum Global Annual Conference Guiyang 2018, held in Guiyang from July 6 to July 8.

The official disclosed that the ministry has already started construction of a Belt and Road ecological and environmental protection services platform.

The ministry is also planning to establish a Belt and Road international green development union with the United Nations Environment Programme (UNEP) for the countries, organizations, enterprises, think tanks and non-governmental organizations along the Belt and Road to jointly promote green and sustainable development.

Quality of traditional Chinese medicine needs improvement: expert

It’s worth questioning why more Chinese consumers are buying medication made with Chinese herbal ingredients from other countries instead of China, the birthplace of traditional Chinese medicine (TCM), an expert said recently.

A tour guide named Yu Lin said she has observed that foreign medications, such as bezoar sedative pills from Japan and heart pills from South Korea, are now on the shopping lists of many Chinese consumers going abroad.

Japan’s Kobayashi Pharmaceutical disclosed that due to the large buying power of Chinese consumers, its sale volume increased by five or six times in the second and third quarter of last year.

Zhao Chaoting, a TCM expert at Xinqiao Hospital, affiliated with the Third Military Medical University, said the pharmaceutical ingredients found in foreign medications are imported from China. After deep processing and packaging, they become foreign.

According to statistics, foreign medicines account for a large proportion of the Chinese market and China only owns five percent of the global TCM market compared with the 80 percent currently owned by Japan.

Experts believe the phenomenon reflects a lack of standardizing in TCM quality, as well as a weakness in patent registration, research and development in the Chinese industry.

You Hongtao, chairman of Pharscin Pharma based in southwest China’s Chongqing, said the largest advantage of foreign medications is that they are made adhering to strict quality standards, while Chinese patent medicines are often regarded as unqualified when they are exported.

Foreign medical scholars and drug manufacturers put technological research and development above all things. For instance, German manufacturers can turn gingko leaves, which they buy for a few yuan for 500 grams, into hypotensive and lipid-lowering drugs worth more than 100 yuan.

In 2017, Chinese ministries launched key TCM service and trade programs to explore new TCM development modes.

Industry insiders suggest that specific policies should be launched to encourage Chinese pharma companies to increase research and development, enhance patent awareness and add to technological content of their products.

Fifth China-Russia Expo opens in Ekaterinburg to promote cooperation

The fifth China-Russia Expo opened in Russia’s fourth-largest city, Ekaterinburg, on July 9.

With the theme “New beginning, new opportunities and new future,” the annual event set up five commercial side-exhibition sectors in the fields of interconnectivity, equipment manufacturing, service and trade, modern agriculture and people-to-people bond.

The expo offers a comprehensive platform for in-depth cooperation between the two countries.

A total of 27 business events are scheduled to take place during the expo, including an economic roundtable, the fourth summit of the Association of Sino-Russian Technical Universities (ASRTU) and a roundtable on China-Russia intellectual property protection.

The exhibition is approved by both Chinese and Russian governments, and co-organized by China’s Ministry of Commerce, Heilongjiang provincial government and the Ministry of Economic Development of the Russian Federation.

The 9th Innoprom Exhibition was held alongside the China-Russia Expo at Yekaterinburg EXPO International Exhibition Center. The two exhibitions will expand industrial cooperation between the two countries through complementary advantages.

China’s carbon market to play vital role in emission reduction in 2020

China’s carbon emission trading system will gradually mature over the next few years and play a crucial role in emission reduction from 2020, says a report released in Beijing on July 10, Science and Technology Daily reported.

The price of carbon dioxide is predicted to rise from 51 yuan ($7.7) per ton in 2020 to 86 yuan in 2025.

The 2018 China Carbon Pricing Survey was conducted by the China Carbon Forum with support from Tsinghua University, the Dutch Emissions Authority (NEa) and the Norwegian Environment Agency.

The report indicates that carbon trading has an increasingly important influence on investment decision-making. About three quarters of respondents believe that carbon trading will play a significant role in 2025, when a series of policies will be adopted by China to reduce carbon emissions.

Establishment of the carbon market mechanism will be a critical path for achieving environmental protection and carbon emission reduction goals, said Wang Ke, associate professor at the School of Environment & Natural Resources, Renmin University of China.

Wang pointed out that enterprises should make long-term decisions to respond to new regulation requirements.

Marc Allessie, director of NEa, noted that China’s carbon market development has sent clear price signals, which is of great significance for the establishment and development of carbon markets in other countries, adding that China’s successful operation of the market will effectively promote a global response to climate change.