Prof. ST Hsieh
Director, US-China Energy Industry Forum
October 20, 2022
The following quote is a typical US reader’s comment to the attached news report on global trade, especially trade with China.
The difference is that China has not posed any threat to the territory of Western nations nor done anything to try to undermine Western democracies. We must be very careful not to make enemies everywhere we go. The world cannot operate like this.
First of all, nations around the world have different endowments in terms of size of the territory, natural resources and population sizes etc. In principle, each nation should be treated equally with respect. But the respect must be mutual and sincere. The world is also dependent on fair global trade to make life better for everyone.
Secondly, global trade is carried out by various businesses and there are international organizations such as WTO where disputes could be settled without going to war. Of course, WTO is not perfect and should be improved timely by conscious.
Recently, “national security” has become the overriding catch phrase in global politics. Under “national security,” any nation can take any unilateral action against any foreign power, including severe trade restrictions. As such, instead of trade negotiation or business-like dialogues, binational trades quickly sunk into rapid firing “quid pro quo” actions. The result is endless and escalating hostility.
If nations engage each other and negotiate, there should not be any “political blackmail!” Of course, one should have confidence in globalization. The trouble now is there is way too much politics encroaching into trades. Politicians should leave the business to the private sector.
It is also noticeable that EU’s position on trading with China is opposite to Biden Administrations’ protectionism or isolationism approach toward China. Should Biden listen to EU leaders and reach a unified dealing with China? If US strong handed approach toward China, without getting EU, Australia on board, what is the chance of US prevailing against the rest of the world?
German foreign minister urges caution in China relationship
GEIR MOULSON Tue, October 18, 2022 at 2:50 AM
BERLIN (AP) — Germany must avoid repeating with China the mistakes that it made in its relationship with Russia over recent years, the German foreign minister said Tuesday.
Annalena Baerbock said Germany must face up to a “competition of systems” between countries that believe in international law and cooperation and authoritarian regimes.
“We must first of all learn from the mistakes of our Russia policy of recent decades,” Baerbock said at a foreign policy forum in Berlin organized by the Koerber Foundation think tank. “I say very clearly that one-sided economic dependence exposes us to political blackmail.”
“As far as Russia is concerned, that’s spilt milk now,” Baerbock said, acknowledging that Germany ignored warnings from eastern European partners about its dependence on Russian energy. “We must ensure that we don’t make such a mistake again, and that means that we will have to take account of this more strongly in our policy toward China.”
She noted that a “national security strategy” being drawn up by Chancellor Olaf Scholz’s government will include a German China strategy, which will be embedded in a European Union strategy.
German governments over the past two decades strengthened economic links with Russia — particularly in the energy sector, despite distaste in eastern Europe for gas pipeline projects linking Russia directly with Germany. Berlin has scrambled to find replacement gas supplies as relations nosedived following Russia’s invasion of Ukraine; Russia hasn’t delivered gas to Germany since the end of August.
German companies have invested heavily in China in recent years, and China is one of Germany’s biggest trading partners.
Scholz’s government has sounded a more cautious note toward Beijing than its predecessors since it took office in December. Scholz made his first Asian visit to Japan, rather than China. And Baerbock, whose Green party was in opposition for 16 years until last year, has sounded tougher on the issue.
Last week, Scholz told a conference of Germany’s important machinery industry that globalization was a success and “decoupling is the wrong answer.”
“We don’t need to decouple ourselves from a few countries; we must continue to do business with individual countries — and I say explicitly, also business with China,” he said. “But we must ensure that we also trade with the rest of the world and take into consideration the rest of Asia, Africa and South America.”
China to Remain a Key Trade Partner for Australia, Official Says
Swati Pandey Tue, October 18, 2022 at 9:07 PM
(Bloomberg) — China is an “important trading partner” for Australia and will remain so in the face of headwinds ranging from Covid lockdowns to supply-chain disruptions, a senior government official said Wednesday.
“It’s such an enormous economy. It will be almost unimaginable to think that that importance will decrease significantly,” said Elizabeth Bowes from the Department of Foreign Affairs and Trade.
Speaking at an Asia Society panel discussion in Melbourne, she highlighted that Australia’s exports to China are higher than this time last year, following record two-way trade of A$282 billion ($178 billion) in 2021.
Australia has been a rare beneficiary of Russia’s war on Ukraine. The invasion triggered a commodity squeeze that sent prices for coal and liquefied natural gas soaring, providing a windfall for the resource-rich economy.
That run is clouded by economic headwinds in China, the only country in the world still pursuing a Covid-Zero strategy, as well as a lack of resolution over trade bans and tariffs on Australian goods.
Ties between the two countries hit rock-bottom during the height of the pandemic in 2020 when Australia called for an independent inquiry into the origins of Covid-19 in China. Beijing responded swiftly, imposing punitive trade actions targeting Australian commodities from coal to barley, lobsters and wine.
“Those factors have highlighted the risks in market concentration and really highlighted the importance of diversity of markets and in products and services that Australia exports and imports,” Bowes said. “We’re looking at delivering new agreements. That is a very key plank of the government’s trade diversification agenda.”
Earlier this week, Australia announced a new green economy trade deal with Singapore, targeting sustainable agriculture and green shipping corridors.
This “could be a model for expanded agreements in the important area of environment for the future,” Wendy Cutler, vice president at the Asia Society Policy Institute, said on the same panel.