Calm required to safely navigate trade storm
By David Gosset |
chinawatch.cn |
Updated: 2019-08-28 15:04
Although not a member of the G7, China was nevertheless on minds of those leaders gathered in French seaside town of Biarritz, for the group’s annual meeting chaired this year by the French President Emmanuel Macron.
On his way to the G7 summit, the top US leader showed he was ready to dangerously escalate the trade war with China he triggered in March 2018.
Neither of the two meetings between the presidents of the two countries —on the sidelines of the G20 summits in Buenos Aires and Osaka — were able to pave the way for a trade agreement.
The US leader decided to add even more pressure on the already complicated Sino-US trade relations on his way to Biarritz. In a tweet, he took the risk of initiating a new Cold War.
Indeed, his mention of the International Emergency Economic Powers Act (IEEPA) on Aug 23 2019 was a highly dangerous provocation. After the declaration of a national emergency, US federal law would then authorize the US President to order the American companies to stop doing business with China seen as an unusual and extraordinary threat to US national security.
The impact of such a decision would be an enormous blow for the world economy already hurt by an uncertain geopolitical horizon. But the US leader seems intent on fueling and manipulating Sinophobia in the belief that it will help get him reelected next year.
To understand the China policy of the current US administration, one needs to keep in mind its two major -- and wrong -- assumptions.
First, it is of the opinion that China's success owes everything to US generosity and benevolence.
Second, the administration assumes that a trade deal can be imposed on Beijing through a series of spectacular injunctions and mounting threats.
These do not accord with the reality. China is moving back into a position of centrality in global affairs thanks to its own efforts.
The US administration's increasingly aggressive China policy can create a situation in which there is less interconnection between the two countries, it could even mean a decoupling, but it can't undermine and stop the Chinese renaissance, a deep historical long-term trend largely independent from short term external variations.
In the series of tweets mentioning the IEEPA, Trump added a revealing -- and deeply false -- remark: "We don't need China", which is a baseless idea.
Reinforced by a groupthink phenomenon, especially since the departure of the chief economic advisor Gary Cohn, it carries with it a disgraceful Sinophobia and a refusal to conceive of a world in which power has been redistributed to a certain extent.
Truth, however, imposes itself. On all major global issues, China has become indispensable. For world peace, for economic, social and environmental progress, China is needed as never before.
The position on free trade expressed by the UK's Prime Minister Boris Johnson, the fact that the journalists covering the G7 were focusing on Beijing, the time spent on China at the final news conference given by the US and the French presidents, are evidence of China's importance in world affairs.
Beijing reacted wisely to the most recent series of tempestuous tweets from the US leader. Vice-Premier Liu He, on another occassion, called for calm on final day of the G7 meeting, which allowed the G7 leaders to reassure, at least temporarily, the markets and the analysts.
No matter the force of the tempest, it is the captain's capacity to remain calm which will increase the chance of reaching less dangerous waters.
China and the US must find a way to reach an agreement. In parallel, and as indicated by French President Emmanuel Macron, an important part of the long-term solution to the Sino-American tensions will be a reformed World Trade Organization.
We are clearly at a critical moment. Calm and vision should be our guides towards new forms of negotiated equilibrium.
The author is the founder of the Europe-China Forum (2002) and he authored the Limited Views On The Chinese Renaissance (2018).
The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
Although not a member of the G7, China was nevertheless on minds of those leaders gathered in French seaside town of Biarritz, for the group’s annual meeting chaired this year by the French President Emmanuel Macron.
On his way to the G7 summit, the top US leader showed he was ready to dangerously escalate the trade war with China he triggered in March 2018.
Neither of the two meetings between the presidents of the two countries —on the sidelines of the G20 summits in Buenos Aires and Osaka — were able to pave the way for a trade agreement.
The US leader decided to add even more pressure on the already complicated Sino-US trade relations on his way to Biarritz. In a tweet, he took the risk of initiating a new Cold War.
Indeed, his mention of the International Emergency Economic Powers Act (IEEPA) on Aug 23 2019 was a highly dangerous provocation. After the declaration of a national emergency, US federal law would then authorize the US President to order the American companies to stop doing business with China seen as an unusual and extraordinary threat to US national security.
The impact of such a decision would be an enormous blow for the world economy already hurt by an uncertain geopolitical horizon. But the US leader seems intent on fueling and manipulating Sinophobia in the belief that it will help get him reelected next year.
To understand the China policy of the current US administration, one needs to keep in mind its two major -- and wrong -- assumptions.
First, it is of the opinion that China's success owes everything to US generosity and benevolence.
Second, the administration assumes that a trade deal can be imposed on Beijing through a series of spectacular injunctions and mounting threats.
These do not accord with the reality. China is moving back into a position of centrality in global affairs thanks to its own efforts.
The US administration's increasingly aggressive China policy can create a situation in which there is less interconnection between the two countries, it could even mean a decoupling, but it can't undermine and stop the Chinese renaissance, a deep historical long-term trend largely independent from short term external variations.
In the series of tweets mentioning the IEEPA, Trump added a revealing -- and deeply false -- remark: "We don't need China", which is a baseless idea.
Reinforced by a groupthink phenomenon, especially since the departure of the chief economic advisor Gary Cohn, it carries with it a disgraceful Sinophobia and a refusal to conceive of a world in which power has been redistributed to a certain extent.
Truth, however, imposes itself. On all major global issues, China has become indispensable. For world peace, for economic, social and environmental progress, China is needed as never before.
The position on free trade expressed by the UK's Prime Minister Boris Johnson, the fact that the journalists covering the G7 were focusing on Beijing, the time spent on China at the final news conference given by the US and the French presidents, are evidence of China's importance in world affairs.
Beijing reacted wisely to the most recent series of tempestuous tweets from the US leader. Vice-Premier Liu He, on another occassion, called for calm on final day of the G7 meeting, which allowed the G7 leaders to reassure, at least temporarily, the markets and the analysts.
No matter the force of the tempest, it is the captain's capacity to remain calm which will increase the chance of reaching less dangerous waters.
China and the US must find a way to reach an agreement. In parallel, and as indicated by French President Emmanuel Macron, an important part of the long-term solution to the Sino-American tensions will be a reformed World Trade Organization.
We are clearly at a critical moment. Calm and vision should be our guides towards new forms of negotiated equilibrium.
The author is the founder of the Europe-China Forum (2002) and he authored the Limited Views On The Chinese Renaissance (2018).
The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
