Is China sincere?

Donald Trump recently tweeted that American cars exported to China have to pay 25  percent tariffs while Chinese cars exported to  the United States pay only 2.5 percent tariffs. He calls this imbalance as “stupid trade.” This is one example why Trump declaring trade war on China has gained a lot of support. Even known critics and Democrats are basically supporting Trump on his actions.

In a recent BOAO Forum, President Xi Jinping declared that China was entering a “new phase of openness.” He made the following pledges:

• China will lower tariffs on imported cars and allow increased foreign equity ownership in car companies;

• Foreign insurance and financial services companies will be allowed to expand;

• China will back more protection for intellectual properties;

• China will take steps to increase imports.

Xi Jinping was urging more “dialogue rather than confrontation.” He also said, in his speech: “The Cold War mentality and zero sum game are increasingly obsolete...Only by adhering to peaceful and working together can we truly achieve win-win results.... We live in a time with an overwhelming trend toward openness and connectivity.”

The speech seemed to be an obvious attempt to create an international image of China as an advocate of free trade and globalization in opposition to Trump’s protectionist rhetoric. The speech is completely the opposite of China’s present image as a country that has consistently violated international trade rules and intellectual property rules. China has often been accused of becoming a fast growing economy at the expense of the rest of the world. 

While there has not been enough time to elicit widespread international reactions, however, some initial reactions expressed skepticism, if not cynicism, about China’s sincerity and its intent to follow through on Xi Jinping’s pledges. Joerg Wuttke, former president of the European Chamber of Commerce in Beijing said: “People will say about the BOAO ‘Show me.’ We heard this in Davos last year.”

In the 2017 World Economic Forum in Davos, Switzerland, Xi Jinping gave a speech that said China was an advocate of globalization. Last November, China also declared that it would ease and eventually remove limits on foreign ownership of banks and financial firms. So far financial firms have not received any details on the implementation of this pledge.  

According to a Stratfor analyst: “To the Trump administration, the results of the investigation into China’s technology transfer practices are a sign that something extreme needs to be done to counteract what it views as China’s unfair behavior. Cooler heads could certainly prevail, but China hawks such as Robert Lighthizer and Peter Navarro [ i.e. Trump officials] believe that even if the tariffs end up damaging the US economy or threatening the very existence of the World Trade Organization (WTO), forcing China to change its behavior is worth the risk. For them the $100 billion increase is a strategic move; to respond in kind, China would be forced to increase tariffs on all its imports from the United States, which totalled just $135 billion in 2016 – and then some. The White House could then use that justification for implementing a blanket tariff against all Chinese imports.”

So far, Trump has shown little fear of the consequences of escalating a trade war with China. Xi Jinping’s Boao speech is not a new pledge but simply a repetition of what China has promised several times in the past but has not implemented. Beijing has also said that China is not afraid of a trade war. In fact, Dai Xianglong, a former governor of the People’s Bank of China said at the opening of the Boao forum: “If a trade conflict becomes a trade war, the US is more likely to be hurt worse by this than China.”

The two superpowers have signalled that they are willing to negotiate; but, if they cannot find common ground during the negotiations the resulting trade war will affect almost every nation in the world – including the Philippines which is part of the supply chain of both countries. The entire global economy could also  be put at risk of another global recession.

Coming tech war

Aside from the trade war, the United States and China are already at the start of another war – the technology warfare. China’s growing technological prowess is already posing a serious threat to American economic and military supremacy.

The principal battle front is on Artificial Intelligence or AI. In the civilian world, AI has practically unlimited uses. It already helps power smartphone applications such as visual and audio recognition software and digital personal assistants. AI algorithms will eventually take over processing and managing the glut of information. It will transform the health services industry, diagnosing and even treating various illnesses. It will also take over white collar jobs in the service industries.

AI algorithms will also evolve into military applications such as driving tanks, ships and even robotic soldiers. Drones are already being used to deliver explosives. Presently they are operated by remote control but eventually they could be utilized with autonomous technology seeking targets on their own using AI.

Summer creative writing classes and workshop for kids and teens

Young Writers’ Hangout on April 14, 21 & 28, May 12, 19 & 26 (1:30 pm-3 pm; independent sessions); Wonder of Words Workshop on May 7, 9, 11, 14, 16 & 18 (1:30-3:30 pm for 8-12 years old/ 4-6 pm for 13-17 years old) at Fully Booked BGC. For details and registration contact 0945-2273216 or [email protected].

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