US President Donald Trump said on Twitter on Saturday that he had a "long and very good call" with Chinese President Xi Jinping and that a possible trade deal between the United States and China was progressing well.

As a partial shutdown of the US government entered its eighth day, with no quick end in sight, the Republican president was in Washington, sending out tweets attacking Democrats and talking up possibly improved relations with China.

The two nations have been in a trade war for much of 2018 that has seen the flow of hundreds of billions of dollars worth of goods between the world's two largest economies disrupted by tariffs.

Trump and Xi agreed to a ceasefire in the trade war, agreeing to hold off on imposing more tariffs for 90 days starting December 1 while they negotiate a deal to end the dispute following months of escalating tensions.

"Just had a long and very good call with President Xi of China," Trump wrote. "Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!"

Chinese state media also said Xi and Trump spoke on Saturday, and quoted Xi as saying that teams from both countries have been working to implement a consensus reached with Trump.

Chinese media also quoted Xi as saying that he hopes both sides can meet each other half way and reach an agreement that is mutually beneficial as soon as possible.

Having canceled his plans to travel to his estate in Florida for the holidays because of the government shutdown that started on December 22, Trump tweeted, "I am in the White House waiting for the Democrats to come on over and make a deal."

The Republican-controlled Congress was closed for the weekend and few lawmakers were in the capital.

The shutdown, affecting about one-quarter of the federal government including 800,000 or so workers, began when funding for several agencies expired.

Congress must pass legislation to restore that funding, but has not done so due to a dispute over Trump's demand that the bill include $5 billion in taxpayer money to help pay for a wall he wants to build along the US-Mexico border.

As a partial shutdown of the US government entered its eighth day, with no quick end in sight, the Republican president was in Washington, sending out tweets attacking Democrats and talking up possibly improved relations with China.

US President Donald Trump said on Twitter on Saturday that he had a "long and very good call" with Chinese President Xi Jinping and that a possible trade deal between the United States and China was progressing well. As a partial shutdown of the US government entered its eighth day, with no quick end in sight, the Republican president was in Washington, sending out tweets attacking Democrats and talking up possibly improved relations with China. The two nations have been in a trade war for much of 2018 that has seen the flow of hundreds of billions of dollars worth of goods between the world's two largest economies disrupted by tariffs. Trump and Xi agreed to a ceasefire in the trade war, agreeing to hold off on imposing more tariffs for 90 days starting December 1 while they negotiate a deal to end the dispute following months of escalating tensions. "Just had a long and very good call with President Xi of China," Trump wrote. "Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!" Chinese state media also said Xi and Trump spoke on Saturday, and quoted Xi as saying that teams from both countries have been working to implement a consensus reached with Trump. Chinese media also quoted Xi as saying that he hopes both sides can meet each other half way and reach an agreement that is mutually beneficial as soon as possible. Having canceled his plans to travel to his estate in Florida for the holidays because of the government shutdown that started on December 22, Trump tweeted, "I am in the White House waiting for the Democrats to come on over and make a deal." The Republican-controlled Congress was closed for the weekend and few lawmakers were in the capital. The shutdown, affecting about one-quarter of the federal government including 800,000 or so workers, began when funding for several agencies expired. Congress must pass legislation to restore that funding, but has not done so due to a dispute over Trump's demand that the bill include $5 billion in taxpayer money to help pay for a wall he wants to build along the US-Mexico border.

Big progress being made on Trade: Donald Trump after 'long call' with Chinese President Xi

China and the United States have made plans for face-to-face consultations over trade in January, the Chinese commerce ministry said on Thursday, as the world's two biggest economies advanced efforts to resolve a months-long trade war.

Consultations through "intensive" telephone calls will continue in the meantime, Gao Feng, spokesman at the commerce ministry, told reporters, adding that talks have been steadily moving forward despite the Christmas break in the United States.

"Even as the US side is in the Christmas holiday period, China and US&nbsp;economic and trade teams have been in close communication, and the consultations are progressing in an orderly manner as scheduled," Gao said, when asked about progress on trade negotiations.

Gao did not comment directly when asked to confirm a media report on a US&nbsp;trade delegation visit scheduled for the week of January&nbsp;7.

"The two sides have indeed made specific arrangements for face-to-face consultations in January in addition to continuing intensive telephone consultations," he said, without elaborating.

US&nbsp;and Chinese officials have spoken by phone in recent weeks, but a meeting next month would be the first in-person talks since US&nbsp;President Donald Trump met his Chinese counterpart, Xi Jinping, in Buenos Aires on December&nbsp;1.

Trump and Xi agreed to stop escalating tit-for-tat tariffs that have disrupted the flow of hundreds of billions of dollars of goods between the two nations. The two leaders also agreed to launch new talks while the United States delayed a planned January&nbsp;1 tariff increase until March.

In response, China has resumed purchases of US&nbsp;soybeans for the first time in six months, even though hefty tariffs on US&nbsp;cargoes remain in place.

Tariff suspension

China has also said it will suspend additional tariffs on US-made vehicles and auto parts for three months starting January 1, adding that it hopes both sides can speed up negotiations to remove all additional tariffs on each other's goods.

A US&nbsp;trade team will travel to Beijing the week of January&nbsp;7 to hold talks with Chinese officials, Bloomberg reported on Wednesday, citing two people familiar with the matter.

A person familiar with the matter told Reuters last week that talks were likely in early January.

In yet another reconciliatory sign, China issued on Tuesday a so-called "negative" list that specifies industries where investors - domestic or foreign - are either restricted or prohibited.

The unified list is seen as an effort to address concerns from Western investors that there is no level-playing field in China. Investment in key Chinese sectors, however, is still prohibited.

Draft investment law

On Wednesday, China unveiled the draft of a foreign investment law for public consultation. In it, China has proposed a ban on forced technology transfer and illegal government "interference" in foreign business operations, practices that have come under the spotlight during the trade war.

While China has frequently denied accusations of engaging in such practices, it has pledged to improve market access for foreign investors and better protect their rights in the face of growing complaints and reduced foreign investment.

In an apparent move to emphasize reciprocity, the draft law said China would reserve the right to retaliate against countries that discriminate against Chinese investment with "corresponding measures".

The draft will likely go through several readings before being submitted to China's parliament for formal approval, which could take another year or more.

Heaping some uncertainty in the way of the bilateral trade talks was the recent arrest of the chief financial officer of Huawei Technologies Co Ltd in Canada at the request of the United States.

US&nbsp;prosecutors accuse Meng Wanzhou of misleading multinational banks about Iran-linked transactions, putting the banks at risk of violating US&nbsp;sanctions. Meng, who is the daughter of Huawei's founder, has said she is innocent.

China and the United States have made plans for face-to-face consultations over trade in January, the Chinese commerce ministry said on Thursday, as the world's two biggest economies advanced efforts to resolve a months-long trade war.

China and the United States have made plans for face-to-face consultations over trade in January, the Chinese commerce ministry said on Thursday, as the world's two biggest economies advanced efforts to resolve a months-long trade war. Consultations through "intensive" telephone calls will continue in the meantime, Gao Feng, spokesman at the commerce ministry, told reporters, adding that talks have been steadily moving forward despite the Christmas break in the United States. "Even as the US side is in the Christmas holiday period, China and US economic and trade teams have been in close communication, and the consultations are progressing in an orderly manner as scheduled," Gao said, when asked about progress on trade negotiations. Gao did not comment directly when asked to confirm a media report on a US trade delegation visit scheduled for the week of January 7. "The two sides have indeed made specific arrangements for face-to-face consultations in January in addition to continuing intensive telephone consultations," he said, without elaborating. US and Chinese officials have spoken by phone in recent weeks, but a meeting next month would be the first in-person talks since US President Donald Trump met his Chinese counterpart, Xi Jinping, in Buenos Aires on December 1. Trump and Xi agreed to stop escalating tit-for-tat tariffs that have disrupted the flow of hundreds of billions of dollars of goods between the two nations. The two leaders also agreed to launch new talks while the United States delayed a planned January 1 tariff increase until March. In response, China has resumed purchases of US soybeans for the first time in six months, even though hefty tariffs on US cargoes remain in place. Tariff suspension China has also said it will suspend additional tariffs on US-made vehicles and auto parts for three months starting January 1, adding that it hopes both sides can speed up negotiations to remove all additional tariffs on each other's goods. A US trade team will travel to Beijing the week of January 7 to hold talks with Chinese officials, Bloomberg reported on Wednesday, citing two people familiar with the matter. A person familiar with the matter told Reuters last week that talks were likely in early January. In yet another reconciliatory sign, China issued on Tuesday a so-called "negative" list that specifies industries where investors - domestic or foreign - are either restricted or prohibited. The unified list is seen as an effort to address concerns from Western investors that there is no level-playing field in China. Investment in key Chinese sectors, however, is still prohibited. Draft investment law On Wednesday, China unveiled the draft of a foreign investment law for public consultation. In it, China has proposed a ban on forced technology transfer and illegal government "interference" in foreign business operations, practices that have come under the spotlight during the trade war. While China has frequently denied accusations of engaging in such practices, it has pledged to improve market access for foreign investors and better protect their rights in the face of growing complaints and reduced foreign investment. In an apparent move to emphasize reciprocity, the draft law said China would reserve the right to retaliate against countries that discriminate against Chinese investment with "corresponding measures". The draft will likely go through several readings before being submitted to China's parliament for formal approval, which could take another year or more. Heaping some uncertainty in the way of the bilateral trade talks was the recent arrest of the chief financial officer of Huawei Technologies Co Ltd in Canada at the request of the United States. US prosecutors accuse Meng Wanzhou of misleading multinational banks about Iran-linked transactions, putting the banks at risk of violating US sanctions. Meng, who is the daughter of Huawei's founder, has said she is innocent.

China says has made plans with US for face-to-face trade meeting in January

The US central bank sent a strong signal on Friday that it would be willing to reconsider expected <a href="http://www.wionews.com/business-economy/us-federal-reserve-hikes-interest-rates-wall-street-stocks-tumble-185385">interest rate hikes </a>amid new data showing President Donald Trump's multi-front trade wars are dragging on the economy and shaking up investors.

The message, from the senior Federal Reserve official with the closest links to US financial markets, sent the Dow Jones Industrial Average surging 300 points. But the index later turned negative once again, and closed with yet another steep decline, its worst week in 10 years.

"I think we are hearing something important for markets and that is a concern around risks to the economy and potential slowdown," New York Federal Reserve Bank President John Williams said Friday on CNBC.

He stressed that the Fed is listening to the fears about the risks and will "be ready to reassess and re-evaluate our views and our policy stance."

It was a remarkable comment coming just two days after the Fed raised the key borrowing rate on Wednesday and signalled it will continue to hike next year, albeit at a slower pace, with only two increases projected.

Economist Chris Low lambasted the Fed's "epic post-meeting communications bungle," and cited the "glaring omission" of the Fed failing to recognize a global manufacturing slowdown, and continuing to believe the labour market is the main factor behind inflation.

The Fed has continued to forecast strong growth, which would support their case for tightening monetary policy, but the expected inflation spurt and rise in wages have not materialized.&nbsp;

New data Friday showed the Fed's preferred inflation index slowed to 1.8 per cent in November, below the central bank's target.

"It's hard to imagine anyone would think it's acceptable to signal three rate hikes when inflation is below target," Low said, noting the Fed forecast see two hikes in 2019 and one in 2020.

Trump effect?&nbsp;

Williams tried to correct the market impression that two interest rate increases are set in stone for next year, highlighting a slight change of language in the policy statement issued Wednesday.&nbsp;

The Fed's November statement said rate increases were expected, while now it "judges that some further gradual" hikes are in store, which Williams said, "is not a commitment or promise in any way."

"Clearly the Fed is changing its tone and it's getting a little more dovish following the market reaction this week," said Adam Sarhan of 50 Park Investments.

"The Fed is blinking"

Of course, there were many who criticized the Fed for not raising interest rates fast enough in the past two years.

While the Fed continues to forecast solid growth, new government data released Friday revealed that falling exports and slower consumer spending and business investment are putting the brakes on economic growth in the second half of the year, while inflation is again falling.

US growth in the July-September quarter was slightly slower than previously reported, at 3.4 per cent, dragged down by the large drop in exports, the Commerce Department reported.

With hundreds of billions of dollars in goods hit by retaliatory tariffs, US exports fell by the largest amount since early 2009 at the height of the global financial crisis, according to the report, the third and final reading on third-quarter GDP.

Trump's aggressive trade policies, and especially the tariff retaliation from China, has impeded exports, with soybean sales nearly grinding to a halt.&nbsp;

The strong US dollar also has made American goods more expensive.

The dispute with China, even with a ceasefire declared until March 1 for negotiations, has created fears of slowing US and global growth, and caused stock markets to retreat, with Wall Street wiping out all of the 2018 gains.

Sluggish Q4&nbsp;

White House trade advisor Peter Navarro helped fuel the Wall Street downturn Friday with more hardline comments about China in an interview with Nikkei, saying Beijing is "trying to steal the future."

He also said two rate hikes by the Fed would be "two too many." &nbsp;

"We don't understand why the Fed is acting so contractionary, at a time when there's no inflation to worry about."

Gregory Daco of Oxford Economics said the data added to "evidence that business investment momentum continues to gradually cool."

Other data show fourth-quarter growth is shaping up to be even more sluggish.

Purchases of durable goods — big-ticket items like appliances, vehicles and machinery — rose in November compared to October, but much less than expected. That follows a big drop in October and will drag on GDP in the final quarter of 2018.

The US central bank sent a strong signal on Friday that it would be willing to reconsider expected interest rate hikes amid new data showing President Donald Trump's multi-front trade wars are dragging on the economy and shaking up investors.

The US central bank sent a strong signal on Friday that it would be willing to reconsider expected interest rate hikes amid new data showing President Donald Trump's multi-front trade wars are dragging on the economy and shaking up investors. The message, from the senior Federal Reserve official with the closest links to US financial markets, sent the Dow Jones Industrial Average surging 300 points. But the index later turned negative once again, and closed with yet another steep decline, its worst week in 10 years. "I think we are hearing something important for markets and that is a concern around risks to the economy and potential slowdown," New York Federal Reserve Bank President John Williams said Friday on CNBC. He stressed that the Fed is listening to the fears about the risks and will "be ready to reassess and re-evaluate our views and our policy stance." It was a remarkable comment coming just two days after the Fed raised the key borrowing rate on Wednesday and signalled it will continue to hike next year, albeit at a slower pace, with only two increases projected. Economist Chris Low lambasted the Fed's "epic post-meeting communications bungle," and cited the "glaring omission" of the Fed failing to recognize a global manufacturing slowdown, and continuing to believe the labour market is the main factor behind inflation. The Fed has continued to forecast strong growth, which would support their case for tightening monetary policy, but the expected inflation spurt and rise in wages have not materialized. New data Friday showed the Fed's preferred inflation index slowed to 1.8 per cent in November, below the central bank's target. "It's hard to imagine anyone would think it's acceptable to signal three rate hikes when inflation is below target," Low said, noting the Fed forecast see two hikes in 2019 and one in 2020. Trump effect? Williams tried to correct the market impression that two interest rate increases are set in stone for next year, highlighting a slight change of language in the policy statement issued Wednesday. The Fed's November statement said rate increases were expected, while now it "judges that some further gradual" hikes are in store, which Williams said, "is not a commitment or promise in any way." "Clearly the Fed is changing its tone and it's getting a little more dovish following the market reaction this week," said Adam Sarhan of 50 Park Investments. "The Fed is blinking" Of course, there were many who criticized the Fed for not raising interest rates fast enough in the past two years. While the Fed continues to forecast solid growth, new government data released Friday revealed that falling exports and slower consumer spending and business investment are putting the brakes on economic growth in the second half of the year, while inflation is again falling. US growth in the July-September quarter was slightly slower than previously reported, at 3.4 per cent, dragged down by the large drop in exports, the Commerce Department reported. With hundreds of billions of dollars in goods hit by retaliatory tariffs, US exports fell by the largest amount since early 2009 at the height of the global financial crisis, according to the report, the third and final reading on third-quarter GDP. Trump's aggressive trade policies, and especially the tariff retaliation from China, has impeded exports, with soybean sales nearly grinding to a halt. The strong US dollar also has made American goods more expensive. The dispute with China, even with a ceasefire declared until March 1 for negotiations, has created fears of slowing US and global growth, and caused stock markets to retreat, with Wall Street wiping out all of the 2018 gains. Sluggish Q4 White House trade advisor Peter Navarro helped fuel the Wall Street downturn Friday with more hardline comments about China in an interview with Nikkei, saying Beijing is "trying to steal the future." He also said two rate hikes by the Fed would be "two too many." "We don't understand why the Fed is acting so contractionary, at a time when there's no inflation to worry about." Gregory Daco of Oxford Economics said the data added to "evidence that business investment momentum continues to gradually cool." Other data show fourth-quarter growth is shaping up to be even more sluggish. Purchases of durable goods — big-ticket items like appliances, vehicles and machinery — rose in November compared to October, but much less than expected. That follows a big drop in October and will drag on GDP in the final quarter of 2018.

US Federal could rethink rate hikes as Trump trade wars drag on economy

The global economy suffered a jolt in 2018 as world's two biggest economies - US and China - got involved in a trade war. Both the countries accuse each other of putting unfair tariffs on goods produced in respective countries.

The first step was taken by US President Donald Trump who announced increased tariffs on more than 1,300 Chinese industrial and other products, nine per cent of its total imports from China last year. There was no need to convince Trump who has long criticised China's trade practices. It was, in fact, a recurrent theme in his 2016 election campaign.

In response to Trump administration tariffs on Chinese goods, Beijing imposed levies on $50 billion worth of American imports, 36.7 per cent of its total imports from US in 2017. Among them was a 25 per cent tariff on soybeans, the single most valuable US farm export. US growers sold $12 billion worth to China last year alone.

Trump further escalated the trade dispute, threatening to identify Chinese imports worth $100 billion for a tariff increase. Trump's negotiating style, honed in his years as a real estate developer, is to take extreme positions to force concessions from his opponents. So far that approach has had mixed results at home and abroad.

A temporary truce came when Trump met with his Chinese counterpart President Xi Jinping on the sidelines of the G-20 summit in Buenos Aires on December 1 and agreed to stop escalating tit-for-tat tariffs that have disrupted the flow of hundreds of billions of dollars of goods between the world's two biggest economies.

Trump and Xi agreed to launch new talks while the United States delayed a planned January 1 tariff increase until March 2.

Since then, Beijing has resumed buying US soybeans, cut tariffs on imports of cars from the United States, and told its state refiners to buy more US oil. China also issued guidance to local governments dropping references to its "Made in China 2025" high-tech industrial development goals amid reports it was looking to replace the program aimed at rivaling US dominance in industries such as aerospace, robotics, semiconductors, new energy vehicles and artificial intelligence.

Trump took those as signs that "China wants to make a big and very comprehensive deal".

While Beijing claims that Washington is the aggressor and is spurring global protectionism, China's trading partners have complained for years that it abuses World Trade Organisation (WTO) rules and propagates unfair policies at home that lock foreign firms out of some sectors as domestic champions are being nurtured.

It is China's huge trade surplus with the United States that has attracted most of the Trump administration's ire. China ran a record $375.2 billion trade surplus with the United States in 2017 as the overall US trade deficit surged 12 per cent to $566 billion.

The global economy suffered a jolt in 2018 as world's two biggest economies - US and China - got involved in a trade war. Both the countries accuse each other of putting unfair tariffs on goods produced in respective countries.

The global economy suffered a jolt in 2018 as world's two biggest economies - US and China - got involved in a trade war. Both the countries accuse each other of putting unfair tariffs on goods produced in respective countries. The first step was taken by US President Donald Trump who announced increased tariffs on more than 1,300 Chinese industrial and other products, nine per cent of its total imports from China last year. There was no need to convince Trump who has long criticised China's trade practices. It was, in fact, a recurrent theme in his 2016 election campaign. In response to Trump administration tariffs on Chinese goods, Beijing imposed levies on $50 billion worth of American imports, 36.7 per cent of its total imports from US in 2017. Among them was a 25 per cent tariff on soybeans, the single most valuable US farm export. US growers sold $12 billion worth to China last year alone. Trump further escalated the trade dispute, threatening to identify Chinese imports worth $100 billion for a tariff increase. Trump's negotiating style, honed in his years as a real estate developer, is to take extreme positions to force concessions from his opponents. So far that approach has had mixed results at home and abroad. A temporary truce came when Trump met with his Chinese counterpart President Xi Jinping on the sidelines of the G-20 summit in Buenos Aires on December 1 and agreed to stop escalating tit-for-tat tariffs that have disrupted the flow of hundreds of billions of dollars of goods between the world's two biggest economies. Trump and Xi agreed to launch new talks while the United States delayed a planned January 1 tariff increase until March 2. Since then, Beijing has resumed buying US soybeans, cut tariffs on imports of cars from the United States, and told its state refiners to buy more US oil. China also issued guidance to local governments dropping references to its "Made in China 2025" high-tech industrial development goals amid reports it was looking to replace the program aimed at rivaling US dominance in industries such as aerospace, robotics, semiconductors, new energy vehicles and artificial intelligence. Trump took those as signs that "China wants to make a big and very comprehensive deal". While Beijing claims that Washington is the aggressor and is spurring global protectionism, China's trading partners have complained for years that it abuses World Trade Organisation (WTO) rules and propagates unfair policies at home that lock foreign firms out of some sectors as domestic champions are being nurtured. It is China's huge trade surplus with the United States that has attracted most of the Trump administration's ire. China ran a record $375.2 billion trade surplus with the United States in 2017 as the overall US trade deficit surged 12 per cent to $566 billion.

Explaining the US-China trade war which grabbed spotlight in 2018

China should lower next year's growth target to 6.0-6.5 per cent as headwinds including <a href="http://www.wionews.com/business-economy/imf-says-trade-war-already-hurting-asia-may-cut-global-growth-forecasts-184777">a trade dispute with the United States</a> increases risks for the economy, according to government advisers' recommendations to top leaders who will meet to map out the 2019 economic agenda.

This week's annual Central Economic Work Conference, a closed-door gathering of top party leaders and policymakers, is being watched by investors for any fresh policy steps to ward off a sharper slowdown in the world's second-largest economy.

The economic conference is likely to convene on Wednesday, two policy insiders said, a day after an event marking the 40th anniversary of China's reform and opening up, where President Xi Jinping is due to make what the official Xinhua news agency described as an "important" speech.

The meeting will not result in any public announcement of economic targets, which are usually reserved for the opening of the parliamentary session in early March.

China's trade war with the United States is spurring some Chinese entrepreneurs, government advisers and think tanks to call for faster economic reforms and the freeing up of a private sector stifled by state controls.

Government advisers and think tanks, which are influential in the decision-making process but aren't empowered to execute policies, have recommended a growth target of 6.0-6.5 per cent for 2019, versus around 6.5 per cent in 2018.

"Next year's growth target could be 6.0-6.5 per cent as the economy is likely to slow from this year," a policy insider who advises the government, said on condition of anonymity.

The Chinese Academy of Social Science, a top government think tank, has forecast growth to slow to 6.3 per cent in 2019 - which would be the weakest since 1990, from an estimated 6.6 per cent in 2018.

Some advisers suggested the government should be more tolerant of weaker growth, pushing reforms and avoiding strong policy stimulus that could worsen the country's debt problems.

Still, a growth rate of 6.0 per cent for next year is seen as the bottom line, amid concerns about employment due to pressures on the economy both domestically and on the external front.

"The economy is expected to slow next year, but the situation won't be very serious if we can manage it well, because room for expanding domestic demand is relatively big," said one adviser.

The State Council Information Office did not immediately respond to Reuters' request for comment.

POLICY SUPPORT

Last week, a meeting of the Politburo - a top decision-making body of the ruling Communist Party - pledged to keep China's economic growth within a "reasonable range" next year.

Growth in <a href="http://www.wionews.com/business-economy/asian-markets-rise-ahead-of-key-meetings-in-china-and-us-184789">Asia's powerhouse economy</a> slowed to 6.5 per cent in the third quarter, the weakest pace since the global financial crisis. Indications are that momentum is likely to come off further in the current quarter and next year, with data last week showing surprising softness in November factory output and retail sales.

Although full-year growth is expected to come just above 6.5 per cent in 2018, government officials and China watchers have already warned of greater risks to the economy next year from trade frictions with the United States.

China's monetary conditions should be relatively easy to support its slowing economy but policy cannot be too loose as falls in domestic interest rates could hit the local currency, central bank chief Yi Gang said last week.

The central bank is likely to deliver more cuts in banks' reserve requirement ratios, to add to the four reductions this year, but it may not rush to cut benchmark interest rates that could hurt the yuan, policy insiders said.

The government has pledged to cut taxes more aggressively next year, spurring a debate among Chinese economists on whether Beijing should expand its fiscal deficit ratio beyond 3 per cent next year. 
&nbsp;

China should lower next year's growth target to 6.0-6.5 per cent as headwinds including a trade dispute with the United States increases risks for the economy, according to government advisers' recommendations to top leaders who will meet to map out the 2019 economic agenda.

China should lower next year's growth target to 6.0-6.5 per cent as headwinds including a trade dispute with the United States increases risks for the economy, according to government advisers' recommendations to top leaders who will meet to map out the 2019 economic agenda. This week's annual Central Economic Work Conference, a closed-door gathering of top party leaders and policymakers, is being watched by investors for any fresh policy steps to ward off a sharper slowdown in the world's second-largest economy. The economic conference is likely to convene on Wednesday, two policy insiders said, a day after an event marking the 40th anniversary of China's reform and opening up, where President Xi Jinping is due to make what the official Xinhua news agency described as an "important" speech. The meeting will not result in any public announcement of economic targets, which are usually reserved for the opening of the parliamentary session in early March. China's trade war with the United States is spurring some Chinese entrepreneurs, government advisers and think tanks to call for faster economic reforms and the freeing up of a private sector stifled by state controls. Government advisers and think tanks, which are influential in the decision-making process but aren't empowered to execute policies, have recommended a growth target of 6.0-6.5 per cent for 2019, versus around 6.5 per cent in 2018. "Next year's growth target could be 6.0-6.5 per cent as the economy is likely to slow from this year," a policy insider who advises the government, said on condition of anonymity. The Chinese Academy of Social Science, a top government think tank, has forecast growth to slow to 6.3 per cent in 2019 - which would be the weakest since 1990, from an estimated 6.6 per cent in 2018. Some advisers suggested the government should be more tolerant of weaker growth, pushing reforms and avoiding strong policy stimulus that could worsen the country's debt problems. Still, a growth rate of 6.0 per cent for next year is seen as the bottom line, amid concerns about employment due to pressures on the economy both domestically and on the external front. "The economy is expected to slow next year, but the situation won't be very serious if we can manage it well, because room for expanding domestic demand is relatively big," said one adviser. The State Council Information Office did not immediately respond to Reuters' request for comment. POLICY SUPPORT Last week, a meeting of the Politburo - a top decision-making body of the ruling Communist Party - pledged to keep China's economic growth within a "reasonable range" next year. Growth in Asia's powerhouse economy slowed to 6.5 per cent in the third quarter, the weakest pace since the global financial crisis. Indications are that momentum is likely to come off further in the current quarter and next year, with data last week showing surprising softness in November factory output and retail sales. Although full-year growth is expected to come just above 6.5 per cent in 2018, government officials and China watchers have already warned of greater risks to the economy next year from trade frictions with the United States. China's monetary conditions should be relatively easy to support its slowing economy but policy cannot be too loose as falls in domestic interest rates could hit the local currency, central bank chief Yi Gang said last week. The central bank is likely to deliver more cuts in banks' reserve requirement ratios, to add to the four reductions this year, but it may not rush to cut benchmark interest rates that could hurt the yuan, policy insiders said. The government has pledged to cut taxes more aggressively next year, spurring a debate among Chinese economists on whether Beijing should expand its fiscal deficit ratio beyond 3 per cent next year.

As trade war bites, China advisers recommend lowering 2019 growth target

By John J Stremlau

US President Donald Trump has finally approved a “New Africa Strategy”. His national security adviser, John Bolton, described the contents on December 13 at the conservative Heritage Foundation in Washington. He began positively, declaring that, "Lasting stability, prosperity, independence and security on the African continent are in the national security interest of the United States."

But he then went on to ignore Africa’s own efforts to address these broad challenges, including its multilateral initiatives. Instead, Bolton’s announcement was replete with rhetoric reminiscent of the Cold War.

The new strategy makes one thing clear: What really matters to Trump is not Africa but containing and countering China.

The reaction from an African perspective is likely bemusement rather than surprise. Trump has shown little interest or empathy towards Africa. And much enmity toward China. His Africa strategy ignores two decades of complex – but generally positive – reactions across sub-Saharan Africa to China becoming the region’s biggest trading partner and a major source of aid and investment.

Previous US administrations generally welcomed Chinese engagement in Africa. Bolton, however, alleged that " China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands."

But does it need to be this way? I would argue not. Africa offers China and America an opportunity to demonstrate to the world – and to each other – that their competition can be constructive with Africa playing a moderating influence by brokering an agreed trilateral agenda.

We need to explore ways to advance cooperation between Africa, China and the US as a confidence-building measure in relations between the US and China. This would obviously need to be designed for the primary benefit of African partners.

Testing trilateralism

Collaborative projects that involve the US and China, with Africa in the forefront, have been the focus of a Carter Centre project since 2014. The centre’s many successful programs in Africa, especially public health, have generated high-level trilateral policy interest. Since the Trump administration took over, these conversations have excluded his senior advisors. Nevertheless, work has continued. This has included recent developments which suggest headway is being made.

In early December the South African Institute of International Affairs hosted the troika that leads this project. The troika was represented by Seyoum Mesfin, Ethiopia’s former and longest-serving foreign minister, an ambassador to China, and regional mediator in Sudan; Zhong Jianhua, formerly China’s Special Representative on African affairs and to the Sudan conflicts; and Donald Booth, a former US ambassador to Liberia, Zambia, Ethiopia and special envoy to Sudan/South Sudan.

Three dozen African, Chinese and US scholars, as well as policy experts, contributed their analyses of previous and possible future areas for trilateral cooperation. They drew on some recent examples. These included efforts to combat piracy off the Horn of Africa and Gulf of Guinea as well as jointly developing a university campus in Liberia. Other projects have involved coordinated mediation between Sudan and South Sudan and mutually reinforcing actions to deal with the Ebola epidemic in West Africa.

Challenges ahead

Several priority areas for future tri-lateral cooperation were identified.

One was the recently constructed headquarters for the Centre for Disease Control and Prevention in Addis Ababa. Funded by China, the next priority for trilateral cooperation is to ensure the centre is equipped to provide better early warning and response to threats like Ebola.

Another priority area is expanding economic aid, trade and investment. This could be done through trilateral projects funded under China’s “Belt and Road” initiative and the US Build Act. The act was approved in October by a large bi-partisan majority of the US Congress.

A related issue is the huge loss of vital tax revenue to African governments due to huge “illicit financial flows”. These are estimated to exceed annual inflows of foreign assistance. The project will seek ways to encourage US and China to support the work of a panel set up by African Union and United Nations Economic Commission for Africa.

Two other broad areas for potential trilateral cooperation are sustainable agriculture and energy. Two initiatives started by the Obama Administration, with the support of Congress, have become popular in Africa. These are the “Feed the Future” and “Power Africa”.

Trump has long wanted to cut both. But his negative attitude isn’t shared by the US Congress, and perhaps even key members of his administration. Assistant Secretary of State for Africa, Tibor Nagy, summarised US-Africa policy before the House Foreign Affairs Committee on the same day Trump approved the new Africa strategy. Nagy’s comments reflected a different mindset. He spoke positively about the two Obama initiatives. He also didn’t seem alarmed by China’s growing presence.

At a time when many in Africa are debating how to build capable states without the undesirable aspects of either America’s “decadent” democracy or China’s “responsive” authoritarianism, engaging both should yield important insights for advancing collective self-reliance and development.

(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/trumps-africa-strategy-should-have-cast-china-as-a-regional-partner-not-a-global-adversary-108901">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp;

By John J Stremlau US President Donald Trump has finally approved a “New Africa Strategy”. His national security adviser, John Bolton, described the contents on December 13 at the conservative Heritage Foundation in Washington.

By John J Stremlau US President Donald Trump has finally approved a “New Africa Strategy”. His national security adviser, John Bolton, described the contents on December 13 at the conservative Heritage Foundation in Washington. He began positively, declaring that, "Lasting stability, prosperity, independence and security on the African continent are in the national security interest of the United States." But he then went on to ignore Africa’s own efforts to address these broad challenges, including its multilateral initiatives. Instead, Bolton’s announcement was replete with rhetoric reminiscent of the Cold War. The new strategy makes one thing clear: What really matters to Trump is not Africa but containing and countering China. The reaction from an African perspective is likely bemusement rather than surprise. Trump has shown little interest or empathy towards Africa. And much enmity toward China. His Africa strategy ignores two decades of complex – but generally positive – reactions across sub-Saharan Africa to China becoming the region’s biggest trading partner and a major source of aid and investment. Previous US administrations generally welcomed Chinese engagement in Africa. Bolton, however, alleged that " China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands." But does it need to be this way? I would argue not. Africa offers China and America an opportunity to demonstrate to the world – and to each other – that their competition can be constructive with Africa playing a moderating influence by brokering an agreed trilateral agenda. We need to explore ways to advance cooperation between Africa, China and the US as a confidence-building measure in relations between the US and China. This would obviously need to be designed for the primary benefit of African partners. Testing trilateralism Collaborative projects that involve the US and China, with Africa in the forefront, have been the focus of a Carter Centre project since 2014. The centre’s many successful programs in Africa, especially public health, have generated high-level trilateral policy interest. Since the Trump administration took over, these conversations have excluded his senior advisors. Nevertheless, work has continued. This has included recent developments which suggest headway is being made. In early December the South African Institute of International Affairs hosted the troika that leads this project. The troika was represented by Seyoum Mesfin, Ethiopia’s former and longest-serving foreign minister, an ambassador to China, and regional mediator in Sudan; Zhong Jianhua, formerly China’s Special Representative on African affairs and to the Sudan conflicts; and Donald Booth, a former US ambassador to Liberia, Zambia, Ethiopia and special envoy to Sudan/South Sudan. Three dozen African, Chinese and US scholars, as well as policy experts, contributed their analyses of previous and possible future areas for trilateral cooperation. They drew on some recent examples. These included efforts to combat piracy off the Horn of Africa and Gulf of Guinea as well as jointly developing a university campus in Liberia. Other projects have involved coordinated mediation between Sudan and South Sudan and mutually reinforcing actions to deal with the Ebola epidemic in West Africa. Challenges ahead Several priority areas for future tri-lateral cooperation were identified. One was the recently constructed headquarters for the Centre for Disease Control and Prevention in Addis Ababa. Funded by China, the next priority for trilateral cooperation is to ensure the centre is equipped to provide better early warning and response to threats like Ebola. Another priority area is expanding economic aid, trade and investment. This could be done through trilateral projects funded under China’s “Belt and Road” initiative and the US Build Act. The act was approved in October by a large bi-partisan majority of the US Congress. A related issue is the huge loss of vital tax revenue to African governments due to huge “illicit financial flows”. These are estimated to exceed annual inflows of foreign assistance. The project will seek ways to encourage US and China to support the work of a panel set up by African Union and United Nations Economic Commission for Africa. Two other broad areas for potential trilateral cooperation are sustainable agriculture and energy. Two initiatives started by the Obama Administration, with the support of Congress, have become popular in Africa. These are the “Feed the Future” and “Power Africa”. Trump has long wanted to cut both. But his negative attitude isn’t shared by the US Congress, and perhaps even key members of his administration. Assistant Secretary of State for Africa, Tibor Nagy, summarised US-Africa policy before the House Foreign Affairs Committee on the same day Trump approved the new Africa strategy. Nagy’s comments reflected a different mindset. He spoke positively about the two Obama initiatives. He also didn’t seem alarmed by China’s growing presence. At a time when many in Africa are debating how to build capable states without the undesirable aspects of either America’s “decadent” democracy or China’s “responsive” authoritarianism, engaging both should yield important insights for advancing collective self-reliance and development. (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Donald Trump’s Africa strategy should have cast China as a regional partner, not a global adversary

China's finance ministry said on Friday it will suspend additional tariffs on US-made vehicles and auto parts for three months starting January 1, 2019.

The government will suspend 25 per cent tariffs on 144 US vehicle and auto part items and 5 per cent tariffs on 67 auto items between January 1 and March 31, 2019, the ministry said in a statement on its website.

The Ministry of Finance also said it hopes China and the United States can speed up negotiations to remove all additional tariffs on each other's goods.

China's finance ministry said on Friday it will suspend additional tariffs on US-made vehicles and auto parts for three months starting January 1, 2019. The government will suspend 25 per cent tariffs on 144 US vehicle and auto part items and 5 per cent tariffs on 67 auto items between January 1 and March 31, 2019, the ministry said in a statement on its website.

China's finance ministry said on Friday it will suspend additional tariffs on US-made vehicles and auto parts for three months starting January 1, 2019. The government will suspend 25 per cent tariffs on 144 US vehicle and auto part items and 5 per cent tariffs on 67 auto items between January 1 and March 31, 2019, the ministry said in a statement on its website. The Ministry of Finance also said it hopes China and the United States can speed up negotiations to remove all additional tariffs on each other's goods.

China to suspend additional tariffs on US-made cars from January 1

Beijing appears to be easing its push on its "Made in China 2025" industrial policy, which has long irked Washington amid <a href="http://www.wionews.com/world/trade-negotiations-underway-between-chinese-us-work-teams-chinese-fm-183496">talks between the world's two largest economies </a>to de-escalate trade tensions.

In new guidance to local governments, it has dropped references to "Made in China 2025", an initiative intended to help China catch up with global rivals in key economic areas and promoted hard since it was unveiled in 2015.

The strategy is core to China's aim to transform itself into a global superpower by 2050 and be more competitive in sectors such as robotics, aerospace and clean-energy cars.

But its open efforts to deploy state support and resources to close a technology gap has provoked alarm in the West and blowback from the US administration.

In its 2016 guidance to local governments, the State Council, or cabinet, said local governments that promoted the implementation of "Made in China 2025" while encouraging industrial growth and manufacturing upgrading would be given priority support.

In its latest guidance reported by state media on Wednesday, references to "Made in China 2025" were omitted.

Local governments that have seen results in their promotion of stable industrial growth and upgrading will be given priority support, the state-backed China Information News said, citing a new document from the State Council.

US President Donald Trump and Chinese President Xi Jinping agreed at a December 1 meeting in Argentina to a truce that delayed by 90 days a planned January 1 US increase of tariffs to per cent&nbsp;from 10 per cent on $200 billion worth of Chinese goods.

The two sides are expected to negotiate over US demands for stronger Chinese protections for US intellectual property, an end to forced technology transfers and greater market access to China for US companies.

In the latest guidance to local governments, the State Council also called for more efforts to promote Chinese exports and attract foreign investment into the world's second-largest economy.

Beijing plans to replace the "Made in China 2025" initiative with a new one to play down China's bid to dominate manufacturing and will seek to be more open to participation by foreign companies, the Wall Street Journal reported on Wednesday, citing people briefed on the matter.

The new policy could be rolled out early next year, according to the Wall Street Journal report.

INFRASTRUCTURE, POLLUTION

In its guidance to local governments, Beijing also tweaked its priorities to focus more on infrastructure and fighting water pollution while slowing efforts to reduce overcapacity in coal and steel industries.

New infrastructure projects should focus on the construction of roads and waterways.

China last week reported far weaker than expected November exports and imports due to slower global and domestic demand, raising the possibility that authorities will take more measures to keep the country's growth rate from slipping too much.

The State Council said it would give "further support to local governments that achieve outstanding work on some key policies."

One area that will no longer be rewarded with additional funds is the effort to curb overcapacity in China's bloated steel and coal sectors.

It suggests that China, the world's top steel and coal producer, has achieved its planned reduction in overcapacity in these sectors.

China has trimmed 150 million tonnes of steel and 800 million tonnes of coal capacity in the past five years.

China still has around 908 million tonnes of steel capacity and 5.1 billion tonnes of coal capacity.

The State Council will also offer more support to cities, especially those that have relied on primary industries, to improve the environment. It specifically mentioned water pollution and efforts to clean up rural areas.

Beijing has been fighting to clean up the nation after years of breakneck economic growth took their toll on the environment, with its massive steel sector bearing the brunt of its vigorous campaign.

Beijing appears to be easing its push on its "Made in China 2025" industrial policy, which has long irked Washington amid talks between the world's two largest economies to de-escalate trade tensions.

Beijing appears to be easing its push on its "Made in China 2025" industrial policy, which has long irked Washington amid talks between the world's two largest economies to de-escalate trade tensions. In new guidance to local governments, it has dropped references to "Made in China 2025", an initiative intended to help China catch up with global rivals in key economic areas and promoted hard since it was unveiled in 2015. The strategy is core to China's aim to transform itself into a global superpower by 2050 and be more competitive in sectors such as robotics, aerospace and clean-energy cars. But its open efforts to deploy state support and resources to close a technology gap has provoked alarm in the West and blowback from the US administration. In its 2016 guidance to local governments, the State Council, or cabinet, said local governments that promoted the implementation of "Made in China 2025" while encouraging industrial growth and manufacturing upgrading would be given priority support. In its latest guidance reported by state media on Wednesday, references to "Made in China 2025" were omitted. Local governments that have seen results in their promotion of stable industrial growth and upgrading will be given priority support, the state-backed China Information News said, citing a new document from the State Council. US President Donald Trump and Chinese President Xi Jinping agreed at a December 1 meeting in Argentina to a truce that delayed by 90 days a planned January 1 US increase of tariffs to per cent from 10 per cent on $200 billion worth of Chinese goods. The two sides are expected to negotiate over US demands for stronger Chinese protections for US intellectual property, an end to forced technology transfers and greater market access to China for US companies. In the latest guidance to local governments, the State Council also called for more efforts to promote Chinese exports and attract foreign investment into the world's second-largest economy. Beijing plans to replace the "Made in China 2025" initiative with a new one to play down China's bid to dominate manufacturing and will seek to be more open to participation by foreign companies, the Wall Street Journal reported on Wednesday, citing people briefed on the matter. The new policy could be rolled out early next year, according to the Wall Street Journal report. INFRASTRUCTURE, POLLUTION In its guidance to local governments, Beijing also tweaked its priorities to focus more on infrastructure and fighting water pollution while slowing efforts to reduce overcapacity in coal and steel industries. New infrastructure projects should focus on the construction of roads and waterways. China last week reported far weaker than expected November exports and imports due to slower global and domestic demand, raising the possibility that authorities will take more measures to keep the country's growth rate from slipping too much. The State Council said it would give "further support to local governments that achieve outstanding work on some key policies." One area that will no longer be rewarded with additional funds is the effort to curb overcapacity in China's bloated steel and coal sectors. It suggests that China, the world's top steel and coal producer, has achieved its planned reduction in overcapacity in these sectors. China has trimmed 150 million tonnes of steel and 800 million tonnes of coal capacity in the past five years. China still has around 908 million tonnes of steel capacity and 5.1 billion tonnes of coal capacity. The State Council will also offer more support to cities, especially those that have relied on primary industries, to improve the environment. It specifically mentioned water pollution and efforts to clean up rural areas. Beijing has been fighting to clean up the nation after years of breakneck economic growth took their toll on the environment, with its massive steel sector bearing the brunt of its vigorous campaign.

Beijing eases back on 'Made in China 2025' amid trade talks with US

China on Wednesday said that trade negotiations are underway between Chinese and US work teams and China hopes that the two sides can work together to create the necessary conditions for achieving a good result.

Lu Kang, spokesman for China's Foreign Ministry, made the remarks when commenting on the ongoing trade negotiations between the two countries after Chinese President Xi Jinping and his US counterpart Donald Trump met in Buenos Aires, Argentina, on the sidelines of the G20 summit.

"According to the consensus reached by the two heads of state, work teams from both sides will step up consultations to resolve the differences between China and the US in the economic and trade field as soon as possible and achieve a result satisfactory to both sides. As far as I know, work teams of both sides are stepping up consultations now. We hope that the two sides can meet with each other halfway so as to create the necessary atmosphere and conditions for achieving a good result," said Lu.

Lu also mentioned that China's Vice Premier Liu He, US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer had talked on the phone recently, and the two sides have drawn a roadmap and a timetable for further stepping up the consultations.

China on Wednesday said that trade negotiations are underway between Chinese and US work teams and China hopes that the two sides can work together to create the necessary conditions for achieving a good result.

China on Wednesday said that trade negotiations are underway between Chinese and US work teams and China hopes that the two sides can work together to create the necessary conditions for achieving a good result. Lu Kang, spokesman for China's Foreign Ministry, made the remarks when commenting on the ongoing trade negotiations between the two countries after Chinese President Xi Jinping and his US counterpart Donald Trump met in Buenos Aires, Argentina, on the sidelines of the G20 summit. "According to the consensus reached by the two heads of state, work teams from both sides will step up consultations to resolve the differences between China and the US in the economic and trade field as soon as possible and achieve a result satisfactory to both sides. As far as I know, work teams of both sides are stepping up consultations now. We hope that the two sides can meet with each other halfway so as to create the necessary atmosphere and conditions for achieving a good result," said Lu. Lu also mentioned that China's Vice Premier Liu He, US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer had talked on the phone recently, and the two sides have drawn a roadmap and a timetable for further stepping up the consultations.

Trade negotiations underway between Chinese, US work teams: Chinese FM

India's bid to start trade with China in domestic currency has suffered a setback when China outrightly rejected the demand. The move could have not only helped India bridge the trade deficit with China but could also have acted as a booster for the depreciating rupee.

The trade deficit between the two Asian neighbours has ballooned to $63 billion in China's favour. This is over a nine-fold increase over the past decade, claimed a Reuters report.&nbsp;

India's export to China has improved in the last few years but there hasn't been any colossal change in the trends. It's export to China had grown by 13 per cent in FY17, by 31 per cent in FY18, and by around 17 per cent in the first half of FY19.&nbsp;

While India wants to supply more sugar, medicines, soymeal, rapeseed meal, and rice to China, the latter want to increase its export of dairy products, apples and pears.&nbsp;

The meeting between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of G20 Summit has not yielded anything good for India except a progress in talks.&nbsp;

China had imposed a ban on Soymeal import from India over quality issues in 2011. India is trying hard to get the ban removed. Also, the trade tariff truce between China and the US is good news for global markets but not for India.&nbsp;

India and China need to iron out their differences as neither of the two neighbours can afford to sit back comfortably amid&nbsp;uncertainty about the US trade policy.

However, bridging a trade deficit of this magnitude will not be an easy task for India especially when the Sino-US trade battle is seeing a temporary truce. The escalation of the issue may have forced China to look for alternatives like India. Nonetheless, the trade war is a temporary solution. China and India must work collectively to find a permanent solution to the persisting issues.

As of now, India is trying to catch a train which has just left the platform with China onboard.&nbsp; 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

India's bid to start trade with China in domestic currency has suffered a setback when China outrightly rejected the demand. The move could have not only helped India bridge the trade deficit with China but could also have acted as a booster for the depreciating rupee.

India's bid to start trade with China in domestic currency has suffered a setback when China outrightly rejected the demand. The move could have not only helped India bridge the trade deficit with China but could also have acted as a booster for the depreciating rupee. The trade deficit between the two Asian neighbours has ballooned to $63 billion in China's favour. This is over a nine-fold increase over the past decade, claimed a Reuters report. India's export to China has improved in the last few years but there hasn't been any colossal change in the trends. It's export to China had grown by 13 per cent in FY17, by 31 per cent in FY18, and by around 17 per cent in the first half of FY19. While India wants to supply more sugar, medicines, soymeal, rapeseed meal, and rice to China, the latter want to increase its export of dairy products, apples and pears. The meeting between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of G20 Summit has not yielded anything good for India except a progress in talks. China had imposed a ban on Soymeal import from India over quality issues in 2011. India is trying hard to get the ban removed. Also, the trade tariff truce between China and the US is good news for global markets but not for India. India and China need to iron out their differences as neither of the two neighbours can afford to sit back comfortably amid uncertainty about the US trade policy. However, bridging a trade deficit of this magnitude will not be an easy task for India especially when the Sino-US trade battle is seeing a temporary truce. The escalation of the issue may have forced China to look for alternatives like India. Nonetheless, the trade war is a temporary solution. China and India must work collectively to find a permanent solution to the persisting issues. As of now, India is trying to catch a train which has just left the platform with China onboard. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

India, China must take steps to bridge trade deficit

The United States has delivered Russia a 60-day ultimatum on Tuesday to come “clean” about what Washington says is a violation of the 1987 nuclear arms control treaty, saying it would be forced to start a six-month process of withdrawal if nothing changes.&nbsp;

In response, Putin, in televised comments, accused the United States of blaming Russia for violations as a pretext for Washington to exit the pact. A tripolar world is in the offing or appears to have already crystallised as the 21st century meanders on. The nature of this sparring suggests that some kind or sort of a putative confrontation is welling up between the United States and Russia.&nbsp;

Whether or not, this particular spat denotes into something ungainly might be beside the point. But, what can be culled from it is that world politics is or actually has moved beyond the post-cold war “unipolarity”. We might be witnessing the emergence or even crystallisation of a tripolar international system. (Polarity is a term that denotes the number of “poles” or power centres in the international system).

The United States, Russia and China appear to be the main contenders and competitors in the emerging international politics and the international system. The tripolar world that is emerging is unlike the system structure of bipolarity that was the defining feature of world politics after World War 3. This time around then instead of the two poles, the former Soviet Union and the United States which, obiter dictum, accorded some degree of stability to the system, there are three poles.

But, this is not the whole “ story” or picture.

&nbsp;The interesting feature of the tripolar system is the different trajectories of the three contenders and the structural context. Consider China first. The country “emerged” after its historic 1978 reforms which entailed a comprehensive modernisation of its economy, opening up to the world, ensconcing the country in the sinews of globalisation but, at the same time, retaining its political system and ideology thereof. All this laid the basis of China’s military modernisation and putative Great Power status.

Russia, after the disintegration of the Soviet Union, has been on a revanchist course. It has employed hybrid techniques to what it thinks is reclaiming its erstwhile Great Power status. The country, akin to a judo player, is punching above its weight with great success.

The United States, albeit still a power to reckon with, having a lead in almost all indices of power is in relative decline. And, with an “insurgent” in the White House, in the form of Donald Trump, who is upending the rules, norms and regimes of the post war liberal order, the country thinks that by being pugnacious, it can rejig world politics and international relations to its advantage.

This is the structural context and nature of international relations in the second decade of the 21st century.

The question now is: how will tripolarity pan out? Will there be great power conflict and war? Or, can countervailing factors dampen and ameliorate this potential conflict?

As the spat between the United States and Russia suggests, there might accrue militarisation of foreign policies of major states. This means military build-ups, intense security dilemmas and arms races. The world then might be armed to the teeth, so to speak. That there would be tension is the axiomatic corollary that flows from militarisation of world politics. Various flashpoints in the world, the Middle East, the Koreas and even South Asia would then become more visible and significant in the foreign policies of the troika of Russia, the United States and China. (The site of jostling, jockeying and contention would also include the Indian Ocean Region(IoR).

All in all, the world will be a more tense and fraught place with the likelihood of a major military confrontation looking on the horizon. Will or can there be redemption? Perhaps.

But, this would lie in the return of vigorous and astute diplomacy. However, a more important countervailing force to intense and militarised conflict would be “complex interdependence”, that is, the thick flows and webs of crisscrossing commercial and capital flows that would enmesh countries in a paradigm, coming out or opting out of which would be to the detriment of each. &nbsp;As of now, however, it would appear that complex interdependence is waning or even dissipating. The challenge then for diplomacy and statecraft is to build and weave together this paradigm together, for peace within and without. The world and its people do not need a conflagration that is either an echo of 1914 or 1945, albeit in a permutation and combination that is far deadlier. Let sobriety, proportion and peace prevail!

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

&nbsp;

The United States has delivered Russia a 60-day ultimatum on Tuesday to come “clean” about what Washington says is a violation of the 1987 nuclear arms control treaty, saying it would be forced to start a six-month process of withdrawal if nothing changes.

The United States has delivered Russia a 60-day ultimatum on Tuesday to come “clean” about what Washington says is a violation of the 1987 nuclear arms control treaty, saying it would be forced to start a six-month process of withdrawal if nothing changes. In response, Putin, in televised comments, accused the United States of blaming Russia for violations as a pretext for Washington to exit the pact. A tripolar world is in the offing or appears to have already crystallised as the 21st century meanders on. The nature of this sparring suggests that some kind or sort of a putative confrontation is welling up between the United States and Russia. Whether or not, this particular spat denotes into something ungainly might be beside the point. But, what can be culled from it is that world politics is or actually has moved beyond the post-cold war “unipolarity”. We might be witnessing the emergence or even crystallisation of a tripolar international system. (Polarity is a term that denotes the number of “poles” or power centres in the international system). The United States, Russia and China appear to be the main contenders and competitors in the emerging international politics and the international system. The tripolar world that is emerging is unlike the system structure of bipolarity that was the defining feature of world politics after World War 3. This time around then instead of the two poles, the former Soviet Union and the United States which, obiter dictum, accorded some degree of stability to the system, there are three poles. But, this is not the whole “ story” or picture. The interesting feature of the tripolar system is the different trajectories of the three contenders and the structural context. Consider China first. The country “emerged” after its historic 1978 reforms which entailed a comprehensive modernisation of its economy, opening up to the world, ensconcing the country in the sinews of globalisation but, at the same time, retaining its political system and ideology thereof. All this laid the basis of China’s military modernisation and putative Great Power status. Russia, after the disintegration of the Soviet Union, has been on a revanchist course. It has employed hybrid techniques to what it thinks is reclaiming its erstwhile Great Power status. The country, akin to a judo player, is punching above its weight with great success. The United States, albeit still a power to reckon with, having a lead in almost all indices of power is in relative decline. And, with an “insurgent” in the White House, in the form of Donald Trump, who is upending the rules, norms and regimes of the post war liberal order, the country thinks that by being pugnacious, it can rejig world politics and international relations to its advantage. This is the structural context and nature of international relations in the second decade of the 21st century. The question now is: how will tripolarity pan out? Will there be great power conflict and war? Or, can countervailing factors dampen and ameliorate this potential conflict? As the spat between the United States and Russia suggests, there might accrue militarisation of foreign policies of major states. This means military build-ups, intense security dilemmas and arms races. The world then might be armed to the teeth, so to speak. That there would be tension is the axiomatic corollary that flows from militarisation of world politics. Various flashpoints in the world, the Middle East, the Koreas and even South Asia would then become more visible and significant in the foreign policies of the troika of Russia, the United States and China. (The site of jostling, jockeying and contention would also include the Indian Ocean Region(IoR). All in all, the world will be a more tense and fraught place with the likelihood of a major military confrontation looking on the horizon. Will or can there be redemption? Perhaps. But, this would lie in the return of vigorous and astute diplomacy. However, a more important countervailing force to intense and militarised conflict would be “complex interdependence”, that is, the thick flows and webs of crisscrossing commercial and capital flows that would enmesh countries in a paradigm, coming out or opting out of which would be to the detriment of each. As of now, however, it would appear that complex interdependence is waning or even dissipating. The challenge then for diplomacy and statecraft is to build and weave together this paradigm together, for peace within and without. The world and its people do not need a conflagration that is either an echo of 1914 or 1945, albeit in a permutation and combination that is far deadlier. Let sobriety, proportion and peace prevail! (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

A Tripolar world portends a new Cold War

Indian foreign policy is in a sweet spot these days. Wooed by major powers of all hues, it can afford to work with everyone, even if at times the pulls and pressures seem contradictory.&nbsp;

This was reflected at the G20 where New Delhi managed to pull off two seemingly contradictory trilaterals. Modi met with United States President Donald Trump and Japanese Prime Minister Shinzo Abe (Japan, America and India, christened JAI) to underscore India’s firm commitment to make the Indo-Pacific a region for shared economic growth, prosperity and security.&nbsp;

The Indo-Pacific construct is now at the centre of strategic jockeying in the region and the three nations have been trying to define the exact scope of their engagement. Modi had explained India’s stand on the strategic Indo-Pacific region in his keynote address at the Shangri La Dialogue in Singapore in June.

&nbsp;“India does not see the Indo-Pacific Region as a strategy or as a club of limited members. Nor as a grouping that seeks to dominate,” he had said. But China’s rapid rise and the challenge it is posing to geopolitical stability is at the heart of the evolution of the Indo-Pacific and the trilateral in Argentina reinforced the desire of the three states to take it forward. Hours after the ‘JAI’ trilateral, Modi joined Chinese president Xi Jinping and Russian President Vladimir Putin for another trilateral – the ‘RIC’ - the second among the three countries after a gap of 12 years. The underlying rationale for this trilateral was quite different as the three nations discussed enhancing mutual cooperation at international forums. According to the Ministry of External Affairs, “They agreed on the importance of reform and strengthening of multilateral institutions that had benefitted the world, including the United Nations, WTO and well-established as well as new global financial institutions.”

While China is the one driving ‘JAI,’ it is the Trump Administration’s challenge to the global economic order that is largely behind India’s outreach to China and Russia. The fact that New Delhi managed to pull this off is a tribute to Modi’s astute investment in managing major power relations over the last few years. This is a period of fluid partnerships and Indian diplomacy will have to be nimble enough if her interests are to be preserved. Modi’s engagements at the G-20 underline that New Delhi is capable of managing this fluidity. India’s defence diplomacy is also being shaped by this reality. 
 
By the end of this year, India would have held military exercises with all P5 countries - US, Russia, China, France and the UK. So on one hand, there is the proposed military exercise with Russia and China, on the other 'Cope India’ between the Indian and US air forces has been restarted after a gap of nine years, showcasing “US and India’s efforts and commitment to a free and open Indo-Pacific region.”India and Russia conducted Indo-Russia Joint Military Exercise-Indra 2018 in Madhya Pradesh last week while Indo-UK Konkan naval exercise is currently underway, off Goa, which is focusing on Anti-Air warfare, Anti-Surface Warfare, Anti-Submarine Warfare, Visit Board Search and Seizure (VBSS) and Seamanship Evolutions.&nbsp;

The Japanese Air Self Defence Force (JASDF) is in India for a bilateral air exercise “SHINYUU Maitri-18” with the Indian Air Force (IAF). Defence minister Nirmala Sitharaman is visiting the US Indo-Pacific Command in Hawaii to chart the course for the first ever India-US tri-service military exercise off the Bay of Bengal in May-June, 2019. At the same time, the armies of India and China will be resuming their annual bilateral military exercise ‘Hand in Hand’ in December. 
 
India’s defence diplomacy has become truly ‘multivector’ and it is aimed at enhancing her strategic partnerships. It is a sign of India’s growing global profile that most powers want to engage with India on military and defence issues. The more partnerships India has, the better leverage it will have within diplomacy. But it is also important to recognise the challenges that come with this. Ultimately, India will have to enhance military interoperability with like-minded countries and that’s unlikely to happen if New Delhi will continue to keep its eggs in multiple baskets. It is good to be in a position where everyone wants to befriend us, but Indian policymakers should be aware of the fundamental challenge: which of these countries would come for help in face of an existential challenge?

(This article was originally published on DNA. Read the <a href="https://www.dnaindia.com/analysis/column-india-s-profile-is-attracting-engagement-on-military-issues-2692655">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Indian foreign policy is in a sweet spot these days. Wooed by major powers of all hues, it can afford to work with everyone, even if at times the pulls and pressures seem contradictory.

Indian foreign policy is in a sweet spot these days. Wooed by major powers of all hues, it can afford to work with everyone, even if at times the pulls and pressures seem contradictory. This was reflected at the G20 where New Delhi managed to pull off two seemingly contradictory trilaterals. Modi met with United States President Donald Trump and Japanese Prime Minister Shinzo Abe (Japan, America and India, christened JAI) to underscore India’s firm commitment to make the Indo-Pacific a region for shared economic growth, prosperity and security. The Indo-Pacific construct is now at the centre of strategic jockeying in the region and the three nations have been trying to define the exact scope of their engagement. Modi had explained India’s stand on the strategic Indo-Pacific region in his keynote address at the Shangri La Dialogue in Singapore in June. “India does not see the Indo-Pacific Region as a strategy or as a club of limited members. Nor as a grouping that seeks to dominate,” he had said. But China’s rapid rise and the challenge it is posing to geopolitical stability is at the heart of the evolution of the Indo-Pacific and the trilateral in Argentina reinforced the desire of the three states to take it forward. Hours after the ‘JAI’ trilateral, Modi joined Chinese president Xi Jinping and Russian President Vladimir Putin for another trilateral – the ‘RIC’ - the second among the three countries after a gap of 12 years. The underlying rationale for this trilateral was quite different as the three nations discussed enhancing mutual cooperation at international forums. According to the Ministry of External Affairs, “They agreed on the importance of reform and strengthening of multilateral institutions that had benefitted the world, including the United Nations, WTO and well-established as well as new global financial institutions.” While China is the one driving ‘JAI,’ it is the Trump Administration’s challenge to the global economic order that is largely behind India’s outreach to China and Russia. The fact that New Delhi managed to pull this off is a tribute to Modi’s astute investment in managing major power relations over the last few years. This is a period of fluid partnerships and Indian diplomacy will have to be nimble enough if her interests are to be preserved. Modi’s engagements at the G-20 underline that New Delhi is capable of managing this fluidity. India’s defence diplomacy is also being shaped by this reality. By the end of this year, India would have held military exercises with all P5 countries - US, Russia, China, France and the UK. So on one hand, there is the proposed military exercise with Russia and China, on the other 'Cope India’ between the Indian and US air forces has been restarted after a gap of nine years, showcasing “US and India’s efforts and commitment to a free and open Indo-Pacific region.”India and Russia conducted Indo-Russia Joint Military Exercise-Indra 2018 in Madhya Pradesh last week while Indo-UK Konkan naval exercise is currently underway, off Goa, which is focusing on Anti-Air warfare, Anti-Surface Warfare, Anti-Submarine Warfare, Visit Board Search and Seizure (VBSS) and Seamanship Evolutions. The Japanese Air Self Defence Force (JASDF) is in India for a bilateral air exercise “SHINYUU Maitri-18” with the Indian Air Force (IAF). Defence minister Nirmala Sitharaman is visiting the US Indo-Pacific Command in Hawaii to chart the course for the first ever India-US tri-service military exercise off the Bay of Bengal in May-June, 2019. At the same time, the armies of India and China will be resuming their annual bilateral military exercise ‘Hand in Hand’ in December. India’s defence diplomacy has become truly ‘multivector’ and it is aimed at enhancing her strategic partnerships. It is a sign of India’s growing global profile that most powers want to engage with India on military and defence issues. The more partnerships India has, the better leverage it will have within diplomacy. But it is also important to recognise the challenges that come with this. Ultimately, India will have to enhance military interoperability with like-minded countries and that’s unlikely to happen if New Delhi will continue to keep its eggs in multiple baskets. It is good to be in a position where everyone wants to befriend us, but Indian policymakers should be aware of the fundamental challenge: which of these countries would come for help in face of an existential challenge? (This article was originally published on DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

India’s profile is attracting engagement on military issues

<a href="http://www.wionews.com/world/china-vows-quick-trade-moves-as-us-sends-mixed-signals-181546">China </a>expressed confidence on Wednesday that it can reach a trade deal with the United States, despite fresh warnings from <a href="http://www.wionews.com/world/i-am-a-tariff-man-if-a-fair-deal-is-made-with-china-i-will-happily-sign-trump-181512">President Donald Trump</a> that he would revert to more tariffs if the two sides cannot resolve their differences.

The remarks by the Chinese Commerce Ministry follow a period of relative quiet from Beijing after Trump and Chinese leader Xi Jinping reached a temporary truce in their trade war at a meeting over dinner in Argentina on Saturday.

In a brief statement on its website, the ministry said China would try to work quickly to implement specific issues already agreed upon, as both sides "actively promote the work of negotiations within 90 days in accordance with a clear timetable and road map".

"We are confident in implementation," it said, calling the latest bilateral talks "very successful".

Trump, via Twitter, held out the possibility of an extension of the ceasefire but warned tariffs would be back on the table if the talks failed to bear fruit.

"The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina," Trump tweeted.

He said he would place "major tariffs" on Chinese goods imported into the United States if his administration is unable to reach an effective trade deal with Beijing.

"We are either going to have a REAL DEAL with China, or no deal at all - at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal - either now or into the future," Trump wrote in a post within minutes of the Commerce Ministry statement.

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We are either going to have a REAL DEAL with China, or no deal at all - at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal - either now or into the future....
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1070110615627333632?ref_src=twsrc%5Etfw">December 5, 2018</a></blockquote>
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The threat of further escalation in the trade war between the world's two largest economies has loomed large over financial markets and the global economy for much of the year, and investors initially greeted the ceasefire with relief.

But the mood has quickly soured on scepticism that the two sides will be able to reach a substantive deal on a host of highly divisive issues within the short negotiating period agreed.

Failure would raise the spectre of a major escalation in the trade battle, with fresh US tariff action and Chinese retaliation possibly as early as March.

The White House says China had committed to start buying more American products and lifting tariff and non-tariff barriers immediately, while beginning talks on structural changes with respect to forced technology transfers and intellectual property protection.

Sources told Reuters that Chinese oil trader Unipec plans to resume buying US crude by March after the Xi-Trump deal reduced the risk of tariffs on those imports. China's crude oil imports from the US had ground had to a halt.

MARKETS DOWN

Global financial markets tumbled on Tuesday as doubts over what could realistically be accomplished in the tight negotiating window added to concerns about fading global growth.

The benchmark Shanghai stock index slipped 0.2 per cent by midday on Wednesday.

"Despite a temporary de-escalation of hostilities following the G-20 summit, the relationship between the U.S. and China will remain contentious," Moody's Investors Service in a report.

"Narrow agreements and modest concessions in the ongoing trade dispute will not bridge the wide gulf in their respective economic, political and strategic interests."

Officials from the US and a number of other major economies have often criticised China for its slow approach to negotiations and not following through on commitments.

China has said comparatively little about the Trump-Xi agreement after senior Chinese officials briefed the media following the meeting, and there have been some differences between US and Chinese accounts of what the deal entails.

"Officials now face the difficult task of fleshing out a deal that is acceptable to the Chinese but also involves significant enough concessions not to be torpedoed by the China hawks in the Trump administration," Capital Economics said in a note this week.

"We wouldn't be surprised if no agreement can be reached within 90 days, with the higher tariff rate coming into force only a few months later than originally planned."

A Chinese official told Reuters officials were "waiting for the leaders to return" before publicising details.

President Xi and his most senior officials are due back in China on Thursday having visited Panama and Portugal since leaving Argentina.

On Wednesday, the Global Times tabloid, which is run by the Chinese Communist Party's main newspaper, said myriad statements from the Trump administration about the deal - including the agreement that China would buy $1.2 trillion in additional US goods - were designed to highlight or even exaggerate facets of the deal that benefitted the United States.

"Reaching an agreement within three months is a spur to not only China, but also the US If the two sides fail to reach a deal, all the White House promises will be invalid," it said.

"It will be a win-win situation if a deal is realised. But if not, more fights and talks will continue alternately for a longer while. Chinese society should maintain a calm attitude."

China expressed confidence on Wednesday that it can reach a trade deal with the United States, despite fresh warnings from President Donald Trump that he would revert to more tariffs if the two sides cannot resolve their differences.

China expressed confidence on Wednesday that it can reach a trade deal with the United States, despite fresh warnings from President Donald Trump that he would revert to more tariffs if the two sides cannot resolve their differences. The remarks by the Chinese Commerce Ministry follow a period of relative quiet from Beijing after Trump and Chinese leader Xi Jinping reached a temporary truce in their trade war at a meeting over dinner in Argentina on Saturday. In a brief statement on its website, the ministry said China would try to work quickly to implement specific issues already agreed upon, as both sides "actively promote the work of negotiations within 90 days in accordance with a clear timetable and road map". "We are confident in implementation," it said, calling the latest bilateral talks "very successful". Trump, via Twitter, held out the possibility of an extension of the ceasefire but warned tariffs would be back on the table if the talks failed to bear fruit. "The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina," Trump tweeted. He said he would place "major tariffs" on Chinese goods imported into the United States if his administration is unable to reach an effective trade deal with Beijing. "We are either going to have a REAL DEAL with China, or no deal at all - at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal - either now or into the future," Trump wrote in a post within minutes of the Commerce Ministry statement. We are either going to have a REAL DEAL with China, or no deal at all - at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal - either now or into the future.... — Donald J. Trump (@realDonaldTrump) December 5, 2018 × The threat of further escalation in the trade war between the world's two largest economies has loomed large over financial markets and the global economy for much of the year, and investors initially greeted the ceasefire with relief. But the mood has quickly soured on scepticism that the two sides will be able to reach a substantive deal on a host of highly divisive issues within the short negotiating period agreed. Failure would raise the spectre of a major escalation in the trade battle, with fresh US tariff action and Chinese retaliation possibly as early as March. The White House says China had committed to start buying more American products and lifting tariff and non-tariff barriers immediately, while beginning talks on structural changes with respect to forced technology transfers and intellectual property protection. Sources told Reuters that Chinese oil trader Unipec plans to resume buying US crude by March after the Xi-Trump deal reduced the risk of tariffs on those imports. China's crude oil imports from the US had ground had to a halt. MARKETS DOWN Global financial markets tumbled on Tuesday as doubts over what could realistically be accomplished in the tight negotiating window added to concerns about fading global growth. The benchmark Shanghai stock index slipped 0.2 per cent by midday on Wednesday. "Despite a temporary de-escalation of hostilities following the G-20 summit, the relationship between the U.S. and China will remain contentious," Moody's Investors Service in a report. "Narrow agreements and modest concessions in the ongoing trade dispute will not bridge the wide gulf in their respective economic, political and strategic interests." Officials from the US and a number of other major economies have often criticised China for its slow approach to negotiations and not following through on commitments. China has said comparatively little about the Trump-Xi agreement after senior Chinese officials briefed the media following the meeting, and there have been some differences between US and Chinese accounts of what the deal entails. "Officials now face the difficult task of fleshing out a deal that is acceptable to the Chinese but also involves significant enough concessions not to be torpedoed by the China hawks in the Trump administration," Capital Economics said in a note this week. "We wouldn't be surprised if no agreement can be reached within 90 days, with the higher tariff rate coming into force only a few months later than originally planned." A Chinese official told Reuters officials were "waiting for the leaders to return" before publicising details. President Xi and his most senior officials are due back in China on Thursday having visited Panama and Portugal since leaving Argentina. On Wednesday, the Global Times tabloid, which is run by the Chinese Communist Party's main newspaper, said myriad statements from the Trump administration about the deal - including the agreement that China would buy $1.2 trillion in additional US goods - were designed to highlight or even exaggerate facets of the deal that benefitted the United States. "Reaching an agreement within three months is a spur to not only China, but also the US If the two sides fail to reach a deal, all the White House promises will be invalid," it said. "It will be a win-win situation if a deal is realised. But if not, more fights and talks will continue alternately for a longer while. Chinese society should maintain a calm attitude."

China confident it can clinch trade pact with US, Trump demands 'real deal'

At the recently held G20 Summit, India’s participation in the Quad meeting and Prime Minister Narendra Modi's informal meetings with Chinese President Xi Jinping, Russian President Vladimir Putin, Japanese Prime Minister Shinzo Abe and US Vice President Mike Pence can be seen as an effort to build balanced and cordial relationships with the major global players.

India has a set of convergences and divergences of interests with China, USA and Russia. We have so far been able to keep these relations separate from one another.&nbsp;

India’s differences with China on certain aspects of Sino-Pak nexus, South China Sea row and India's entry into the Nuclear Suppliers Group (NSG) can also be viewed as a convergence of interests with the US.&nbsp;

Similarly, India’s differences with the US on trade, climate change, and CAATSA, in the context of Russia, can be seen as the convergence of interests with China.

The silver lining is that the US, being our strategic partner, will like to have India's support it in its military operations in case Pakistan does not serve its strategic interest. The US waiver on Chabahar port and import of Iranian oil for the next six months is a welcome step by the US towards India. &nbsp;

After India's suggestion to expand the scope and dimension of QUAD, opening it up to other affected countries, there is a general feeling amongst other QUAD members that India is perhaps getting softer towards China.&nbsp;

The reality is that India has an independent foreign policy. &nbsp;In the Indo-Pacific region, it stands with US, Japan and Australia in checking Chinese encroachment of global commons like the South China Sea. India seeks to enable seamless movement in international water and rule-based order.&nbsp;

India, therefore, has to maintain harmonious relations with all its strategic partners and neighbours to pursue its national interest. Despite such complexities, the silver lining is that the US, as well as China, want better relations with India.

Russia also will not like to lose the largest purchaser of its military hardware and a strategic partnership which stood the test of time even in ‘Heated Cold War’ era.

 The number of bilateral and trilateral meetings attended by India at the G20 Summit clearly explains the balanced diplomatic exercises carried out by India as per its national interest. Indian participation in two significant trilateral meetings - US-Japan-India and China-Russia-India clearly indicates the efforts required to balance relations with two separate groupings.&nbsp;

At G20, India flagged the issue of cooperation in dealing with the fugitive offenders and countering terrorism besides many other issues that represent India’s strategic interest. 
 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp;

At the recently held G20 Summit, India’s participation in the Quad meeting and Prime Minister Narendra Modi's informal meetings with Chinese President Xi Jinping, Russian President Vladimir Putin, Japanese Prime Minister Shinzo Abe and US Vice President Mike Pence can be seen as an effort to build balanced and cordial relationships with the major global players.

At the recently held G20 Summit, India’s participation in the Quad meeting and Prime Minister Narendra Modi's informal meetings with Chinese President Xi Jinping, Russian President Vladimir Putin, Japanese Prime Minister Shinzo Abe and US Vice President Mike Pence can be seen as an effort to build balanced and cordial relationships with the major global players. India has a set of convergences and divergences of interests with China, USA and Russia. We have so far been able to keep these relations separate from one another. India’s differences with China on certain aspects of Sino-Pak nexus, South China Sea row and India's entry into the Nuclear Suppliers Group (NSG) can also be viewed as a convergence of interests with the US. Similarly, India’s differences with the US on trade, climate change, and CAATSA, in the context of Russia, can be seen as the convergence of interests with China. The silver lining is that the US, being our strategic partner, will like to have India's support it in its military operations in case Pakistan does not serve its strategic interest. The US waiver on Chabahar port and import of Iranian oil for the next six months is a welcome step by the US towards India. After India's suggestion to expand the scope and dimension of QUAD, opening it up to other affected countries, there is a general feeling amongst other QUAD members that India is perhaps getting softer towards China. The reality is that India has an independent foreign policy. In the Indo-Pacific region, it stands with US, Japan and Australia in checking Chinese encroachment of global commons like the South China Sea. India seeks to enable seamless movement in international water and rule-based order. India, therefore, has to maintain harmonious relations with all its strategic partners and neighbours to pursue its national interest. Despite such complexities, the silver lining is that the US, as well as China, want better relations with India. Russia also will not like to lose the largest purchaser of its military hardware and a strategic partnership which stood the test of time even in ‘Heated Cold War’ era.  The number of bilateral and trilateral meetings attended by India at the G20 Summit clearly explains the balanced diplomatic exercises carried out by India as per its national interest. Indian participation in two significant trilateral meetings - US-Japan-India and China-Russia-India clearly indicates the efforts required to balance relations with two separate groupings. At G20, India flagged the issue of cooperation in dealing with the fugitive offenders and countering terrorism besides many other issues that represent India’s strategic interest. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

India displayed smart diplomacy at G20 Summit

The G-20 meeting is over, and there's good news and bad news for the Dow Jones Industrial Average and other stock market indexes, according to a Dow Jones Newswires report on Sunday.

Here's the good news following a Saturday night dinner between President Donald Trump and Chinese President Xi Jinping in Buenos Aires: The United States said it won't impose 25 per cent tariffs on Chinese goods in January, as it had planned, and China agreed to buy more US agricultural goods.

It's essentially a cease-fire, for now, in the trade war between the world's two largest economies.

The bad news is that this deal opened a 90-day window to negotiate a deal not just on trade but also on protecting intellectual property, ending the forced transfer of technology, and more.

If those negotiations aren't successful, then it's tariff time.

It's unclear how the market will react to the news, given last week's massive rally.

The S&amp;P 500's 4.8 per cent rise - its biggest in about seven years - was, in part, a response to Federal Reserve Chairman Jerome Powell's dovish tone.

But it was also a bet on a deal being reached.

The market, however, is forward-looking, and so the question will become whether the typical sell-the-news reaction kicks in.

But one thing is clear - the stakes in the negotiations between the US and China are huge.

Paul Ashworth, chief US economist at Capital Economics, notes that if talks fail, tariffs would rise on the $200 billion of goods already on the receiving end, and would be imposed on the remaining $250 billion that are, so far, penalty-free.

"This is very much a temporary pause," he writes.

And a high-stakes one at that.

The G-20 meeting is over, and there's good news and bad news for the Dow Jones Industrial Average and other stock market indexes, according to a Dow Jones Newswires report on Sunday.

The G-20 meeting is over, and there's good news and bad news for the Dow Jones Industrial Average and other stock market indexes, according to a Dow Jones Newswires report on Sunday. Here's the good news following a Saturday night dinner between President Donald Trump and Chinese President Xi Jinping in Buenos Aires: The United States said it won't impose 25 per cent tariffs on Chinese goods in January, as it had planned, and China agreed to buy more US agricultural goods. It's essentially a cease-fire, for now, in the trade war between the world's two largest economies. The bad news is that this deal opened a 90-day window to negotiate a deal not just on trade but also on protecting intellectual property, ending the forced transfer of technology, and more. If those negotiations aren't successful, then it's tariff time. It's unclear how the market will react to the news, given last week's massive rally. The S&P 500's 4.8 per cent rise - its biggest in about seven years - was, in part, a response to Federal Reserve Chairman Jerome Powell's dovish tone. But it was also a bet on a deal being reached. The market, however, is forward-looking, and so the question will become whether the typical sell-the-news reaction kicks in. But one thing is clear - the stakes in the negotiations between the US and China are huge. Paul Ashworth, chief US economist at Capital Economics, notes that if talks fail, tariffs would rise on the $200 billion of goods already on the receiving end, and would be imposed on the remaining $250 billion that are, so far, penalty-free. "This is very much a temporary pause," he writes. And a high-stakes one at that.

Trump and China called a truce in the trade war. Now what?

Two days after US President Trump agreed to<a href="http://www.wionews.com/world/trump-and-china-called-a-truce-in-the-trade-war-now-what-181070"> freeze tariffs against Chinese goods</a> during his meeting with President Xi at G20, the US president said he has a "strong and personal relationship" with the Chinese leader.

"He and I are the only two people that can bring about massive and very positive change, on trade and far beyond," he said, adding that a "solution" for "North Korea was a great thing for China and for everyone."

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President Xi and I have a very strong and personal relationship. He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations. A solution for North Korea is a great thing for China and ALL!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1069581524180324352?ref_src=twsrc%5Etfw">December 3, 2018</a></blockquote>
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The White House had said earlier that the President had agreed he will leave the tariffs on $200 billion worth of products at the 10 per cent rate and not raise it to $25 per cent.

According to White House, China also agreed to purchase "very substantial" amount of agricultural, energy, industrial, and other product from the United States to "reduce the trade imbalance between our two countries."

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Farmers will be a a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1069577273819443200?ref_src=twsrc%5Etfw">December 3, 2018</a></blockquote>
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President Trump and Xi had a marathon two and half hour meeting in which the two leaders decided to temporarily call truce for the next 90 days on the escalating trade war.

"Farmers will be a very big and fast beneficiary of our deal with China," the US president said in his tweet. "They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants," he asserted.

On the arms race, the president said: "I am certain that, at some time in the future, President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable arms race."

"The US spent $716 billion this year. Crazy!"

Trump and Xi have also agreed to "immediately" begin negotiations on "structural changes" on technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft.

"Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!" he said in an early morning tweet on Monday.

Further, the US president revealed that China had agreed to reduce and remove tariffs on cars coming into China. The US currently imposes 40 per cent tariffs, he informed.

Meanwhile, Treasury Secretary Steven Mnuchin said on Monday that the US will need to see "something concrete" from China on trade in the next 90 days to build a real agreement.

He said for the first time there was "a clear path" to reduce the US trade deficit with China to zero.

Global equity markets soared on Monday after China and the United States announced a breakthrough in the trade war. Frankfurt stocks, London's FTSE and the stock markets in Paris all gained after the announcement on Monday.

Hong Kong and Shanghai stocks also climbed as the tit-for-tat tariff war was halted for the next 90 days between the two world powers.

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/_3dQEsuLYcw" width="560"></iframe>

Two days after US President Trump agreed to freeze tariffs against Chinese goods during his meeting with President Xi at G20, the US president said he has a "strong and personal relationship" with the Chinese leader.

Two days after US President Trump agreed to freeze tariffs against Chinese goods during his meeting with President Xi at G20, the US president said he has a "strong and personal relationship" with the Chinese leader. "He and I are the only two people that can bring about massive and very positive change, on trade and far beyond," he said, adding that a "solution" for "North Korea was a great thing for China and for everyone." President Xi and I have a very strong and personal relationship. He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations. A solution for North Korea is a great thing for China and ALL! — Donald J. Trump (@realDonaldTrump) December 3, 2018 × The White House had said earlier that the President had agreed he will leave the tariffs on $200 billion worth of products at the 10 per cent rate and not raise it to $25 per cent. According to White House, China also agreed to purchase "very substantial" amount of agricultural, energy, industrial, and other product from the United States to "reduce the trade imbalance between our two countries." Farmers will be a a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU! — Donald J. Trump (@realDonaldTrump) December 3, 2018 × President Trump and Xi had a marathon two and half hour meeting in which the two leaders decided to temporarily call truce for the next 90 days on the escalating trade war. "Farmers will be a very big and fast beneficiary of our deal with China," the US president said in his tweet. "They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants," he asserted. On the arms race, the president said: "I am certain that, at some time in the future, President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable arms race." "The US spent $716 billion this year. Crazy!" Trump and Xi have also agreed to "immediately" begin negotiations on "structural changes" on technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft. "Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!" he said in an early morning tweet on Monday. Further, the US president revealed that China had agreed to reduce and remove tariffs on cars coming into China. The US currently imposes 40 per cent tariffs, he informed. Meanwhile, Treasury Secretary Steven Mnuchin said on Monday that the US will need to see "something concrete" from China on trade in the next 90 days to build a real agreement. He said for the first time there was "a clear path" to reduce the US trade deficit with China to zero. Global equity markets soared on Monday after China and the United States announced a breakthrough in the trade war. Frankfurt stocks, London's FTSE and the stock markets in Paris all gained after the announcement on Monday. Hong Kong and Shanghai stocks also climbed as the tit-for-tat tariff war was halted for the next 90 days between the two world powers.

Certain will talk to Xi, Putin about halting arms race some time in the future: Trump

The G20 Summit 2018, besides its normal proceedings, will be remembered for a large number of bilateral and trilateral meetings on the sidelines, which seem to be even more significant than the main purpose of the meet.&nbsp;

There were some high profile bilateral meetings like US-China in the context of trade war. Meanwhile, US–Russia meeting (scheduling of which saw many flip-flops) finally could not take place due to Ukraine crisis&nbsp;and ongoing investigations into alleged Russia's involvement in the US elections.&nbsp;

The two trilateral meetings involving US-Japan-India and China-Russia-India were also very significant because of the peculiarity of Indian position in both the meetings. One of the reasons for this phenomenon is that the world has become more interconnected, hence even bilateral relations between global powers impact the world directly or indirectly.&nbsp;

For an instance, when a large number of countries including US allies, strategic and trade partners joined The Asian Infrastructure Investment Bank (AIIB), against the wishes of the US, it was quite evident that a time has come when many countries will like to have alternate sources of funding other than west dominated IMF or Japan-led Asian Development Bank (ADB). Similarly, when China exhibited aggressive design of converting atolls into artificial islands ignoring international laws, a group of democratic countries huddled together to form 'the QUAD' with a potential to counterbalance such moves.

The international relationships and strategic interests of most countries in the interlinked world today are so interwoven, that it is difficult to count countries only in one grouping; hence, many new issue based groupings have emerged in last few decades. &nbsp; &nbsp;

In the exuberance of pursuing ‘America First’ policy, in the last few years, the US has been highly critical of some of its allies, strategic and trade partners. In some cases, it used threatening gestures, while some others were slapped with sanctions. The policy got a major jolt when America literally threatened everyone to support their decision of shifting embassy to Jerusalem, but many countries junked the threat and voted as per their own perception. Pulling out of the Paris Accord for Climate Change, Iran Nuclear deal, TPP are some more examples when many of US allies were not on the same page with the Trump Administration.&nbsp;

The last G7 Summit was not a pleasant experience for the US allies due to alleged self-centred economic approach of America. The NATO allies are also relatively lesser confident of the US-backing and keep waiting for next surprise from Trump Administration. Under these circumstances, Is Trump's Concept of ‘With US’ or ‘Against the US’ is outdated in the interlinked world?&nbsp;

On the other hand, Chinese after announcing Belt and Road Initiative (BRI) in 2013, with the elevation of President Xi Jinping from ‘Chairman of everything’ to ‘Core’ and ‘Leader for life’, exhibited its expeditionary design starting from the South China Sea to land grabbing. With its fast growth, it tried to showcase that its methodology of governance was better than the democratic model. Its ‘Incremental Encroachment Strategy’ in Doklam and the South China Sea, exhibited Chinese ambitions exceeding beyond peaceful growth to the arena of global strategic dominance; hence it started facing opposition from a group of democratic countries.

In the case of Russia also, we find Germany, a US ally, drawing gas from them. Furthermore, Russia and China helped out North Korea with fuel and essentialities immediately after Singapore Summit between President Trump and North Korean leader Kim Jong-un. Russia - a strategic partner of India supplies military hardware to Pakistan. A cross-pollination of relations is therefore quite evident.&nbsp;

The time has come when most countries want to manage their international relations as per their own national interests and do not want their strategic choices to be dictated by others. It is also a fact that as the world becoming more interconnected, the trend of issue-based relationships is increasing. 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

The G20 Summit 2018, besides its normal proceedings, will be remembered for a large number of bilateral and trilateral meetings on the sidelines, which seem to be even more significant than the main purpose of the meet.

The G20 Summit 2018, besides its normal proceedings, will be remembered for a large number of bilateral and trilateral meetings on the sidelines, which seem to be even more significant than the main purpose of the meet. There were some high profile bilateral meetings like US-China in the context of trade war. Meanwhile, US–Russia meeting (scheduling of which saw many flip-flops) finally could not take place due to Ukraine crisis and ongoing investigations into alleged Russia's involvement in the US elections. The two trilateral meetings involving US-Japan-India and China-Russia-India were also very significant because of the peculiarity of Indian position in both the meetings. One of the reasons for this phenomenon is that the world has become more interconnected, hence even bilateral relations between global powers impact the world directly or indirectly. For an instance, when a large number of countries including US allies, strategic and trade partners joined The Asian Infrastructure Investment Bank (AIIB), against the wishes of the US, it was quite evident that a time has come when many countries will like to have alternate sources of funding other than west dominated IMF or Japan-led Asian Development Bank (ADB). Similarly, when China exhibited aggressive design of converting atolls into artificial islands ignoring international laws, a group of democratic countries huddled together to form 'the QUAD' with a potential to counterbalance such moves. The international relationships and strategic interests of most countries in the interlinked world today are so interwoven, that it is difficult to count countries only in one grouping; hence, many new issue based groupings have emerged in last few decades. In the exuberance of pursuing ‘America First’ policy, in the last few years, the US has been highly critical of some of its allies, strategic and trade partners. In some cases, it used threatening gestures, while some others were slapped with sanctions. The policy got a major jolt when America literally threatened everyone to support their decision of shifting embassy to Jerusalem, but many countries junked the threat and voted as per their own perception. Pulling out of the Paris Accord for Climate Change, Iran Nuclear deal, TPP are some more examples when many of US allies were not on the same page with the Trump Administration. The last G7 Summit was not a pleasant experience for the US allies due to alleged self-centred economic approach of America. The NATO allies are also relatively lesser confident of the US-backing and keep waiting for next surprise from Trump Administration. Under these circumstances, Is Trump's Concept of ‘With US’ or ‘Against the US’ is outdated in the interlinked world? On the other hand, Chinese after announcing Belt and Road Initiative (BRI) in 2013, with the elevation of President Xi Jinping from ‘Chairman of everything’ to ‘Core’ and ‘Leader for life’, exhibited its expeditionary design starting from the South China Sea to land grabbing. With its fast growth, it tried to showcase that its methodology of governance was better than the democratic model. Its ‘Incremental Encroachment Strategy’ in Doklam and the South China Sea, exhibited Chinese ambitions exceeding beyond peaceful growth to the arena of global strategic dominance; hence it started facing opposition from a group of democratic countries. In the case of Russia also, we find Germany, a US ally, drawing gas from them. Furthermore, Russia and China helped out North Korea with fuel and essentialities immediately after Singapore Summit between President Trump and North Korean leader Kim Jong-un. Russia - a strategic partner of India supplies military hardware to Pakistan. A cross-pollination of relations is therefore quite evident. The time has come when most countries want to manage their international relations as per their own national interests and do not want their strategic choices to be dictated by others. It is also a fact that as the world becoming more interconnected, the trend of issue-based relationships is increasing. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

The importance of strategic balance in an interconnected world

By Tony Walker

The United States and China have arrived at a temporary truce in a trade conflict that was threatening to further destabilise world equity markets, entrench a global slowdown and cause more damage to a rules-based international order.

Agreement by US President Donald Trump and his Chinese counterpart, Xi Jinping, to allow further negotiations before threatened tariff increases on Chinese imports coming into effect, is a welcome development.

However, this is a temporary respite, a short-term fix, not a long-term solution to myriad trade and other tensions that have put the US and China at odds with each other.

For their own purposes and in their own interests, Trump and Xi have come away from the Argentine capital with a deal that papers over differences that extend from China’s activities in the South China Sea to its mercantilist trade policies.

As far as we know, China’s ruthless assertion of its sovereignty over disputed waters in the South China Sea was not a material subject for discussion in Buenos Aires except, possibly, in passing.

China’s rise and America’s relative decline ensure these global economic superpowers will continue to bump up against each other.

So, what was achieved and what are the prospects for an accord reached on the sidelines of the G20?

In their efforts to lower trade tensions and prevent a further erosion of global confidence, Trump and Xi agreed to a 90-day extension on the imposition of additional US tariffs on some $200 billion of Chinese imports.

Trump had threatened to increase tariffs from 10 per cent to 25 per cent on an initial batch of Chinese imports from January 1. He had also flagged his intention to impose levies on another $267 billion worth of imports if progress was not made in resolving broad-based trade differences.

A joint statement laid out a timeline for continuing negotiations. It reads:

"Both parties agree that they will endeavour to have this transaction completed within the next 90 days. If, at the end of this period of time, the parties are unable to reach an agreement, the 10 per cent tariffs will be raised to 25 percent."

In return for these temporary concessions, China agreed to:

"… purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between the two countries. China has agreed to start purchasing agricultural product immediately."

China also agreed to crack down on sales of Fentanyl by making it a controlled substance. The US is battling an opioid crisis in which Fentanyl is a lethal component.

In retaliation for US trade actions, China had imposed duties on US$110 billion of imports. A principal component of this is soybeans, effectively killing one of America’s more lucrative export markets.

Trump has been under huge pressure from his Mid-Western rural heartland over a collapse in the Chinese market for American agricultural products.

The two sides also agreed to address structural problems in the trading relationship. These extend to five areas – forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft.

These are highly complex issues and unlikely to be resolved in the short term, if at all.

In the wash-up of the Xi-Trump discussions, it appears China has got more out of the deal than the US – at least for now. It has secured a stay of execution for the implementation of tariff increases and forestalled, for the time being, tariffs on an additional bloc of Chinese exports.

In return, it has agreed to buy unspecified quantities of US products and to talk about differences.

Trump’s willingness to compromise after months of bombast reflects pressures from a shellshocked grain-producing constituency and alarm on Wall Street at prospects of a full-blown trade war.

From Beijing’s perspective, China has demonstrated that its growing economic heft has enabled it to avoid the appearance of yielding to US pressure.

If not a “win-win” for China – as Chinese officials are fond of saying – it is certainly not a “lose-lose”.

In a statement at odds with months of fire-breathing rhetoric over China’s allegedly perfidious trade practices, Trump hailed his understanding with Xi. He said: "This was an amazing and productive meeting with unlimited possibilities for both the US and China."

For their part, Chinese officials were more circumspect.

Foreign Minister Wang Yi said the talks were conducted in a “friendly and candid atmosphere”. The presidents: "Agreed that the two sides can and must get bilateral relations right… China is willing to increase imports in accordance with the needs of its domestic market and the people’s needs."

Impetus for a face-saving deal in Buenos Aires has been prompted by growing concerns about the global economy. The signs of a slowdown are clear. Trade volumes had begun to moderate in the third quarter, heightening worries of a global retrenchment.

On the sidelines of the G20, the International Monetary Fund’s managing director, Christine Lagarde, noted:

"Pressures on emerging markets have been rising and trade tensions have begun to have a negative impact, increasing downside risks."

In its October Outlook statement, the IMF warned about threats to global growth due to trade disturbances.

In their final communique, G20 leaders danced around contentious issues on trade to accommodate American objections to having the word “protectionism” inserted in the document.

In the end, participants settled on the need for reform of the World Trade Organisation to describe a world trading system that is falling short of its objectives. Washington has been agitating for a review of the WTO to strengthen its dispute resolution and appeal procedures.

The US has also objected to a continuing description of China as a developing country, with concessions that enable it to take advantage of less developed country status in its access to global markets.

On climate change, Washington separated itself from the other G20 members. All, except the US, reaffirmed their commitment to the Paris Agreement. The US announced in 2017 it was pulling out of Paris.

Foreign policy specialists will be sceptical about a de-escalation of trade hostilities given the range of issues bedevilling the US-China relationship.

Reflecting a hardening of US attitudes towards China, and in contrast to the optimism that had prevailed for much of the past two decades, Ely Ratner in Foreign Affairs notes:

"Even if tariffs are put on hold, the United States will continue to restructure the US-China economic relationship through investment restrictions, export controls, and sustained law enforcement actions against Chinese industrial and cyber-espionage."

"At the same time, there are no serious prospects for Washington and Beijing to resolve other important areas of dispute, including the South China Sea, human rights and the larger contest over the norms, rules and institutions that govern relations in Asia."

A stiffening view in the US towards China is shared more or less across the board. In those circumstances, a temporary ceasefire in Buenos Aires is unlikely to be sustained.

 
(Tony Walker is Adjunct Professor, School of Communications, La Trobe University)

(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/g20-summit-bring-a-truce-in-us-china-trade-relations-but-its-likely-to-be-temporary-108017">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

By Tony Walker The United States and China have arrived at a temporary truce in a trade conflict that was threatening to further destabilise world equity markets, entrench a global slowdown and cause more damage to a rules-based international order.

By Tony Walker The United States and China have arrived at a temporary truce in a trade conflict that was threatening to further destabilise world equity markets, entrench a global slowdown and cause more damage to a rules-based international order. Agreement by US President Donald Trump and his Chinese counterpart, Xi Jinping, to allow further negotiations before threatened tariff increases on Chinese imports coming into effect, is a welcome development. However, this is a temporary respite, a short-term fix, not a long-term solution to myriad trade and other tensions that have put the US and China at odds with each other. For their own purposes and in their own interests, Trump and Xi have come away from the Argentine capital with a deal that papers over differences that extend from China’s activities in the South China Sea to its mercantilist trade policies. As far as we know, China’s ruthless assertion of its sovereignty over disputed waters in the South China Sea was not a material subject for discussion in Buenos Aires except, possibly, in passing. China’s rise and America’s relative decline ensure these global economic superpowers will continue to bump up against each other. So, what was achieved and what are the prospects for an accord reached on the sidelines of the G20? In their efforts to lower trade tensions and prevent a further erosion of global confidence, Trump and Xi agreed to a 90-day extension on the imposition of additional US tariffs on some $200 billion of Chinese imports. Trump had threatened to increase tariffs from 10 per cent to 25 per cent on an initial batch of Chinese imports from January 1. He had also flagged his intention to impose levies on another $267 billion worth of imports if progress was not made in resolving broad-based trade differences. A joint statement laid out a timeline for continuing negotiations. It reads: "Both parties agree that they will endeavour to have this transaction completed within the next 90 days. If, at the end of this period of time, the parties are unable to reach an agreement, the 10 per cent tariffs will be raised to 25 percent." In return for these temporary concessions, China agreed to: "… purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between the two countries. China has agreed to start purchasing agricultural product immediately." China also agreed to crack down on sales of Fentanyl by making it a controlled substance. The US is battling an opioid crisis in which Fentanyl is a lethal component. In retaliation for US trade actions, China had imposed duties on US$110 billion of imports. A principal component of this is soybeans, effectively killing one of America’s more lucrative export markets. Trump has been under huge pressure from his Mid-Western rural heartland over a collapse in the Chinese market for American agricultural products. The two sides also agreed to address structural problems in the trading relationship. These extend to five areas – forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft. These are highly complex issues and unlikely to be resolved in the short term, if at all. In the wash-up of the Xi-Trump discussions, it appears China has got more out of the deal than the US – at least for now. It has secured a stay of execution for the implementation of tariff increases and forestalled, for the time being, tariffs on an additional bloc of Chinese exports. In return, it has agreed to buy unspecified quantities of US products and to talk about differences. Trump’s willingness to compromise after months of bombast reflects pressures from a shellshocked grain-producing constituency and alarm on Wall Street at prospects of a full-blown trade war. From Beijing’s perspective, China has demonstrated that its growing economic heft has enabled it to avoid the appearance of yielding to US pressure. If not a “win-win” for China – as Chinese officials are fond of saying – it is certainly not a “lose-lose”. In a statement at odds with months of fire-breathing rhetoric over China’s allegedly perfidious trade practices, Trump hailed his understanding with Xi. He said: "This was an amazing and productive meeting with unlimited possibilities for both the US and China." For their part, Chinese officials were more circumspect. Foreign Minister Wang Yi said the talks were conducted in a “friendly and candid atmosphere”. The presidents: "Agreed that the two sides can and must get bilateral relations right… China is willing to increase imports in accordance with the needs of its domestic market and the people’s needs." Impetus for a face-saving deal in Buenos Aires has been prompted by growing concerns about the global economy. The signs of a slowdown are clear. Trade volumes had begun to moderate in the third quarter, heightening worries of a global retrenchment. On the sidelines of the G20, the International Monetary Fund’s managing director, Christine Lagarde, noted: "Pressures on emerging markets have been rising and trade tensions have begun to have a negative impact, increasing downside risks." In its October Outlook statement, the IMF warned about threats to global growth due to trade disturbances. In their final communique, G20 leaders danced around contentious issues on trade to accommodate American objections to having the word “protectionism” inserted in the document. In the end, participants settled on the need for reform of the World Trade Organisation to describe a world trading system that is falling short of its objectives. Washington has been agitating for a review of the WTO to strengthen its dispute resolution and appeal procedures. The US has also objected to a continuing description of China as a developing country, with concessions that enable it to take advantage of less developed country status in its access to global markets. On climate change, Washington separated itself from the other G20 members. All, except the US, reaffirmed their commitment to the Paris Agreement. The US announced in 2017 it was pulling out of Paris. Foreign policy specialists will be sceptical about a de-escalation of trade hostilities given the range of issues bedevilling the US-China relationship. Reflecting a hardening of US attitudes towards China, and in contrast to the optimism that had prevailed for much of the past two decades, Ely Ratner in Foreign Affairs notes: "Even if tariffs are put on hold, the United States will continue to restructure the US-China economic relationship through investment restrictions, export controls, and sustained law enforcement actions against Chinese industrial and cyber-espionage." "At the same time, there are no serious prospects for Washington and Beijing to resolve other important areas of dispute, including the South China Sea, human rights and the larger contest over the norms, rules and institutions that govern relations in Asia." A stiffening view in the US towards China is shared more or less across the board. In those circumstances, a temporary ceasefire in Buenos Aires is unlikely to be sustained. (Tony Walker is Adjunct Professor, School of Communications, La Trobe University) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

G20 summit brings a truce in US-China trade relations

The United States said Saturday that it agreed in a long-awaited summit with China to suspend new tariffs for 90 days as the two powers seek to end a trade war.

The White House said a threatened increase of tariffs on $200 billion worth of Chinese goods from 10 to 25 percent, which was set to take effect on January 1, would be put off for 90 days.&nbsp;

"If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent," a White House statement said after <a href="http://www.wionews.com/world/at-g20-dinner-trump-calls-relationship-with-xi-very-special-180799">dinner talks between President Donald Trump and his counterpart Xi Jinping</a> on the sidelines of a G20 summit in Buenos Aires.

Trump, who in recent months has harshly criticized China and accused it of meddling in US elections, in the statement called his meeting with Xi "amazing and productive."

China earlier confirmed the outlines of the arrangement, saying that officials of the world's two largest economies would get to work on resolving a range of trade disputes.

The White House said that China has also agreed to step up purchases "immediately" of an unspecified amount of US agricultural goods.&nbsp;

Amid the trade tensions, China has sharply curtailed its purchases of US soybeans and other produce, dealing a significant blow to farmers, a major support base for Trump.

In what the White House called a "wonderful humanitarian gesture," the White House said that Xi would crack down on fentanyl, the opioid painkiller largely made in China that is behind an epidemic of US overdoses.

The White House said that China would subject fentanyl makers to the "maximum penalty under the law." China is the world's leading executioner, with drug offenses subject to the death penalty.

The United States said Saturday that it agreed in a long-awaited summit with China to suspend new tariffs for 90 days as the two powers seek to end a trade war. The White House said a threatened increase of tariffs on $200 billion worth of Chinese goods from 10 to 25 percent, which was set to take effect on January 1, would be put off for 90 days.

The United States said Saturday that it agreed in a long-awaited summit with China to suspend new tariffs for 90 days as the two powers seek to end a trade war. The White House said a threatened increase of tariffs on $200 billion worth of Chinese goods from 10 to 25 percent, which was set to take effect on January 1, would be put off for 90 days. "If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent," a White House statement said after dinner talks between President Donald Trump and his counterpart Xi Jinping on the sidelines of a G20 summit in Buenos Aires. Trump, who in recent months has harshly criticized China and accused it of meddling in US elections, in the statement called his meeting with Xi "amazing and productive." China earlier confirmed the outlines of the arrangement, saying that officials of the world's two largest economies would get to work on resolving a range of trade disputes. The White House said that China has also agreed to step up purchases "immediately" of an unspecified amount of US agricultural goods. Amid the trade tensions, China has sharply curtailed its purchases of US soybeans and other produce, dealing a significant blow to farmers, a major support base for Trump. In what the White House called a "wonderful humanitarian gesture," the White House said that Xi would crack down on fentanyl, the opioid painkiller largely made in China that is behind an epidemic of US overdoses. The White House said that China would subject fentanyl makers to the "maximum penalty under the law." China is the world's leading executioner, with drug offenses subject to the death penalty.

US says it is suspending new China tariffs for 90 days

US President Donald Trump said <a href="http://www.wionews.com/world/ahead-of-g20-meeting-with-xi-trump-says-billions-of-dollar-pouring-into-us-due-to-tariffs-on-china-180279">Thursday a trade deal with Beijing</a> was "close" but added he might prefer not to reach one, cooling hopes for a breakthrough at a summit this week.

Trump and Chinese President Xi Jinping are due to meet during the Group of 20 summit in Argentina, which begins Friday.

"I think we are very close to doing something with China but I don't know that I want to do it," Trump told reporters at the White House before departing for Buenos Aires.

Trump has slapped punishing tariffs on more than $250 billion in Chinese imports so far this year, demanding that Beijing end allegedly unfair trade practices and reverse industrial policies criticized by other major economies.

US officials in recent days have also renewed their criticism of Beijing in advance of the Xi-Trump meeting.

Markets are hoping a deal can be reached before the end of the year, when US duty rates are due to increase significantly.

Trump on Thursday also reiterated that US tariffs were generating tax revenues: "What we have right now is billions and billions of dollars coming into the United States in the form of taxes," he said.

Economists and critics of the president's trade policies point out duties are paid by importers and thus constitute a tax on US industry and consumers that is not paid by China.

Trump also said he believed Beijing was hoping to strike a deal.

"I think China wants to make a deal. I am open to making a deal but frankly I like the deal that we have right now," he said.

Wall Street extended early losses following Trump's remarks, with the Dow Jones Industrial Average 0.6 per cent lower shortly after 1600 GMT. 
&nbsp;

US President Donald Trump said Thursday a trade deal with Beijing was "close" but added he might prefer not to reach one, cooling hopes for a breakthrough at a summit this week.

US President Donald Trump said Thursday a trade deal with Beijing was "close" but added he might prefer not to reach one, cooling hopes for a breakthrough at a summit this week. Trump and Chinese President Xi Jinping are due to meet during the Group of 20 summit in Argentina, which begins Friday. "I think we are very close to doing something with China but I don't know that I want to do it," Trump told reporters at the White House before departing for Buenos Aires. Trump has slapped punishing tariffs on more than $250 billion in Chinese imports so far this year, demanding that Beijing end allegedly unfair trade practices and reverse industrial policies criticized by other major economies. US officials in recent days have also renewed their criticism of Beijing in advance of the Xi-Trump meeting. Markets are hoping a deal can be reached before the end of the year, when US duty rates are due to increase significantly. Trump on Thursday also reiterated that US tariffs were generating tax revenues: "What we have right now is billions and billions of dollars coming into the United States in the form of taxes," he said. Economists and critics of the president's trade policies point out duties are paid by importers and thus constitute a tax on US industry and consumers that is not paid by China. Trump also said he believed Beijing was hoping to strike a deal. "I think China wants to make a deal. I am open to making a deal but frankly I like the deal that we have right now," he said. Wall Street extended early losses following Trump's remarks, with the Dow Jones Industrial Average 0.6 per cent lower shortly after 1600 GMT.

Close to doing deal with China but I don't know I want to do it, says Trump ahead of meeting with Xi

China is going to this week's G-20 summit hoping for a deal to ease a damaging trade war with the United States, Beijing's ambassador to Washington said on Tuesday, while warning of dire consequences if US hardliners try to separate the world's two largest economies.

Speaking to Reuters before heading to join Chinese President Xi Jinping's delegation at the Group of 20 summit in Buenos Aires, Cui Tiankai said China and the United States had a shared responsibility to cooperate in the interests of the global economy.

Asked whether he thought hardliners in the White House were seeking to separate the closely linked US and Chinese economies, Cui said he did not think it was possible or helpful to do so, adding: "I don't know if people really realise the possible consequences - the impact, the negative impact - if there is such a decoupling."

He drew parallels to the tariff wars of the 1930s among industrial countries, which contributed to a collapse of global trade and heightened tensions in the years before World War Two.

“The lessons of history are still there. In the last century, we had two world wars, and in between them, the Great Depression. I don’t think anybody should really try to have a repetition of history. These things should never happen again, so people have to act in a responsible way."

Asked whether he thought the current tensions, which have seen the two sides impose tit-for-tat tariffs on hundreds of billions of dollars of goods, could degenerate into all-out conflict, Cui called the outcome "unimaginable" and the two countries should do everything to prevent it.

Cui said China did not want to have a trade war and sought a negotiated solution to the impasse stemming from US President Donald Trump's demands for far-reaching Chinese concessions to correct a $375 billion goods trade deficit with China.

"We are against any trade war," the ambassador said, but added that China would "fight to safeguard our own interests."

"We believe that the key to a negotiated solution to the trade issues is a balanced approach to the concerns of both sides and honestly so far I have not seen sufficient response from the US side to our concerns."

"We cannot accept that one side would put forward a number of demands and the other side just has to satisfy all these things."

White House chief economist Larry Kudlow said on Tuesday that Trump was open to a trade deal with China but was prepared to hike tariffs on Chinese imports if there is no breakthrough on long-standing trade irritants during a planned dinner on Saturday in Buenos Aires with Xi.

TREASURY DEBT

Cui said he did not believe Beijing was seriously considering using its massive US Treasury debt holdings as a trade war weapon, citing concerns that such a move would destabilise financial markets.

"This is very dangerous, this is like playing with fire," he said when asked if China would consider selling Treasuries or reducing purchases should trade tensions worsen.

Trade and economic analysts have often said China could slow its purchases of US Treasuries or sell off its holdings to pressure Washington into a deal.

China is the largest foreign holder of US Treasury debt, with $1.15 trillion on September. 30, according to the latest Treasury data, compared with $1.19 trillion a year earlier. As of Monday, there was about $15.97 trillion of total public Treasury debt outstanding.

Cui said China's Treasury holdings were a good example of the economic interdependence between the United States and China.

He said Trump and Xi had "a very good working relationship and personal friendship" formed in three previous face-to-face meetings, including two formal summits, and that had been shown by a long phone conversation in early November.

White House insiders say there remain substantial differences within the Trump administration over how far to push China.

The division groups on one side anti-China hardliner and trade adviser Peter Navarro, US Trade Representative Robert Lighthizer and those who favour a complete re-evaluation of the relationship. On the other side are pragmatists led by Kudlow and Treasury Secretary Steven Mnuchin, concerned about the harm deepening friction could do to the US economy and markets.

China is going to this week's G-20 summit hoping for a deal to ease a damaging trade war with the United States, Beijing's ambassador to Washington said on Tuesday, while warning of dire consequences if US hardliners try to separate the world's two largest economies.

China is going to this week's G-20 summit hoping for a deal to ease a damaging trade war with the United States, Beijing's ambassador to Washington said on Tuesday, while warning of dire consequences if US hardliners try to separate the world's two largest economies. Speaking to Reuters before heading to join Chinese President Xi Jinping's delegation at the Group of 20 summit in Buenos Aires, Cui Tiankai said China and the United States had a shared responsibility to cooperate in the interests of the global economy. Asked whether he thought hardliners in the White House were seeking to separate the closely linked US and Chinese economies, Cui said he did not think it was possible or helpful to do so, adding: "I don't know if people really realise the possible consequences - the impact, the negative impact - if there is such a decoupling." He drew parallels to the tariff wars of the 1930s among industrial countries, which contributed to a collapse of global trade and heightened tensions in the years before World War Two. “The lessons of history are still there. In the last century, we had two world wars, and in between them, the Great Depression. I don’t think anybody should really try to have a repetition of history. These things should never happen again, so people have to act in a responsible way." Asked whether he thought the current tensions, which have seen the two sides impose tit-for-tat tariffs on hundreds of billions of dollars of goods, could degenerate into all-out conflict, Cui called the outcome "unimaginable" and the two countries should do everything to prevent it. Cui said China did not want to have a trade war and sought a negotiated solution to the impasse stemming from US President Donald Trump's demands for far-reaching Chinese concessions to correct a $375 billion goods trade deficit with China. "We are against any trade war," the ambassador said, but added that China would "fight to safeguard our own interests." "We believe that the key to a negotiated solution to the trade issues is a balanced approach to the concerns of both sides and honestly so far I have not seen sufficient response from the US side to our concerns." "We cannot accept that one side would put forward a number of demands and the other side just has to satisfy all these things." White House chief economist Larry Kudlow said on Tuesday that Trump was open to a trade deal with China but was prepared to hike tariffs on Chinese imports if there is no breakthrough on long-standing trade irritants during a planned dinner on Saturday in Buenos Aires with Xi. TREASURY DEBT Cui said he did not believe Beijing was seriously considering using its massive US Treasury debt holdings as a trade war weapon, citing concerns that such a move would destabilise financial markets. "This is very dangerous, this is like playing with fire," he said when asked if China would consider selling Treasuries or reducing purchases should trade tensions worsen. Trade and economic analysts have often said China could slow its purchases of US Treasuries or sell off its holdings to pressure Washington into a deal. China is the largest foreign holder of US Treasury debt, with $1.15 trillion on September. 30, according to the latest Treasury data, compared with $1.19 trillion a year earlier. As of Monday, there was about $15.97 trillion of total public Treasury debt outstanding. Cui said China's Treasury holdings were a good example of the economic interdependence between the United States and China. He said Trump and Xi had "a very good working relationship and personal friendship" formed in three previous face-to-face meetings, including two formal summits, and that had been shown by a long phone conversation in early November. White House insiders say there remain substantial differences within the Trump administration over how far to push China. The division groups on one side anti-China hardliner and trade adviser Peter Navarro, US Trade Representative Robert Lighthizer and those who favour a complete re-evaluation of the relationship. On the other side are pragmatists led by Kudlow and Treasury Secretary Steven Mnuchin, concerned about the harm deepening friction could do to the US economy and markets.

Trade war: China envoy warns of dire consequences if US hardliners get their way

By Greg Raymond 
 
There is no evidence that China has ever contemplated using its nuclear weapons to coerce another state. Instead, China has maintained a “no first use policy” on nuclear weapons. Surprising as it may sound to many, China wants to build an image of itself as a responsible power.

But the fact remains that China could threaten to use those weapons to force the Australian government into, say, ceasing its patrols of the South China Sea, regardless of the much-debated US “nuclear umbrella” in East Asia.

This is the reality that Australian defence planners have lived with for some 50 years. Australian defence force planning has long accepted the premise that our self-reliance needs to be viewed within an alliance context. As recently as 2009, the government plainly conceded that the Australian Defence Force was not expected to deal with a situation:

…where we were under threat from a major power whose military capabilities were simply beyond our capacity to resist.

In such a situation, we don’t expect to be alone.

This point is important to bear in mind when we consider recent discussions of a “Plan B” to strengthen Australia’s defence posture.

Commentators have suggested recently that Australia’s strategic risk is increasing and the A$195 billion defence spending plan announced in the 2016 Defence White Paper is now insufficient.

Australian taxpayers would certainly be interested to know why a plan that doubles our submarine fleet, significantly expands our navy and adds 100 of the most advanced and expensive combat aircraft ever invented would now be seen as insufficient.

The answer lies in the shifting strategic landscape in the Asia-Pacific region, which has led to greater concerns about China’s long-term intentions and rising tensions between China and the US. So what exactly has changed? 
 
China’s recent activities in the region

Since the last Defence White Paper in 2016, Australian defence observers have been alarmed by four things:

<ol>
	<li>China’s rejection of the Permanent Court of Arbitration’s ruling that deemed its nine-dash line claim in the South China Sea illegal 
	&nbsp;</li>
	<li>China’s conversion of its South China Sea artificial islands into military bases, which was largely complete by the end of 2016, despite a pledge President Xi Jinping gave then-President Barack Obama that China had “no intention to militarise” the islands 
	&nbsp;</li>
	<li>Reports in April of this year that China was establishing partnerships with Pacific nations like Vanuatu for potential future military bases and other arrangements&nbsp; 
	&nbsp;</li>
	<li>The election of Donald Trump as US president and the uncertainty this has brought to the region due to his disparaging of traditional alliances and disdain for multilateral institutions</li>
</ol>

These events have occurred against a backdrop of China’s rapidly expanding global footprint. This includes the establishment of its first overseas military base in Djibouti on the Horn of Africa, and its growing access to regional ports such as the controversial Hambantota port in Sri Lanka, which the Sri Lankan government ceded to Beijing on a 99-year lease.

These regional shifts have also come amid growing illiberalism in China, evidence of increasing Chinese intelligence and influence operations in Australia (especially the Dastyari affair) and bullying behaviour from Chinese officials in their meetings with Australian politicians.

In addition, Trump appears to mark a significant break with the strategic priorities of previous US administrations. He’s threatened to walk away from America’s support for the traditional allies and global trade institutions that have characterised US foreign policy since the Second World War. This has put unprecedented distance between the United States and Australia, which as a middle power needs healthy global institutions.

But in China, it’s different. The Trump administration and importantly, the US security apparatus, share Australia’s darkening view of China to the point we may now be seeing a new Cold War developing in the region.

Case in point: the recent announcement of US participation in the development of a joint naval base with Australia on Papua New Guinea’s Manus Island. This is clear evidence of the US’s new willingness to compete with China and a signal the US wants to dispel the uncertainty left in the region in the wake of Obama’s problematic “pivot” to Asia.

Assessing the risks for Australia 
 
In assessing whether Australia needs a steep increase in its defence spending, there are two questions we must ask: Firstly, what regional developments could the 2016 Defence White Paper not have anticipated? And of these, which equate to risks that increased defence spending can obviate?

Our defence planners have been well aware since at least 2009 of China’s gradually modernising defence forces and steadily growing navy. China’s moves toward a blue-water fleet, including new carriers and cruisers, were also well understood in 2016.

While the artificial islands in the South China Sea were still being built, their eventual militarisation was also anticipated by Australian defence leaders, despite China’s protestations to the contrary.

But even knowing all of this, Australia’s defence planners essentially decided in the 2016 White Paper to continue with the “Force 2030” force structure they envisaged in 2009. There have been some additions like shore-based anti-ship missiles, but our plan has largely been focused on enablers – that is, the capability to make the force operate with greater certainty, precision and coordination. Importantly, this White Paper did not envisage Australia fighting China on its own.

Of the strategic developments involving China since 2016 – from the revelations of its influence operations to its new-found interest in the Pacific – the question defence planners should now be asking is whether any undermine the fundamental judgements of the 2016 White Paper. Do they point to a need to radically change Australia’s defence posture?

Combating China’s illicit influence in Australia is being dealt with through our stronger foreign influence laws. Offsetting China’s influence in the Pacific will be best undertaken through Australia’s aid and diplomatic programmes.

This leaves the big question of the role of the US in the Asia-Pacific region – the most critical of defence planning factors. Will Australia be left on its own in the foreseeable future?

And here we must observe that despite Trump’s anti-alliance rhetoric, the American force posture in the Western Pacific actually remains unchanged. There have been no base closures and no force draw-downs as of yet from the bases encircling China in Guam, Japan and South Korea, though Trump has threatened this.

Moreover, the hardening US view against China means a likely strengthening of its Asia-Pacific posture under the new National Security Statement, the cardinal US security policy document.

In fact, the US is now expanding its presence in the region with the announcement of the new joint naval base on Manus Island. The US also recently put its nuclear deterrence guarantee to Australia in writing for the first time in history. And the American Marine build-up in Darwin continues.

Although China’s military advances are making the task of possibly defeating its navy more challenging, the fact remains that it will be a long time before it’s able to start a war with the US confident of victory. The US also seems unwilling to leave China to dominate Asia.

In these circumstances, would China use its forces against other countries in the region, like Australia, without the US getting involved? In my view, it could not.

Therefore, while every responsible government should continue to assess defence planning and ensure appropriate levels of readiness, the case for a sharply increased defence spending plan is not at this point compelling. 
 
(Greg Raymond is Research fellow, Australian National University)

(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/with-china-us-tensions-on-the-rise-does-australia-need-a-new-defence-strategy-106515">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

&nbsp;

By Greg Raymond There is no evidence that China has ever contemplated using its nuclear weapons to coerce another state. Instead, China has maintained a “no first use policy” on nuclear weapons.

By Greg Raymond There is no evidence that China has ever contemplated using its nuclear weapons to coerce another state. Instead, China has maintained a “no first use policy” on nuclear weapons. Surprising as it may sound to many, China wants to build an image of itself as a responsible power. But the fact remains that China could threaten to use those weapons to force the Australian government into, say, ceasing its patrols of the South China Sea, regardless of the much-debated US “nuclear umbrella” in East Asia. This is the reality that Australian defence planners have lived with for some 50 years. Australian defence force planning has long accepted the premise that our self-reliance needs to be viewed within an alliance context. As recently as 2009, the government plainly conceded that the Australian Defence Force was not expected to deal with a situation: …where we were under threat from a major power whose military capabilities were simply beyond our capacity to resist. In such a situation, we don’t expect to be alone. This point is important to bear in mind when we consider recent discussions of a “Plan B” to strengthen Australia’s defence posture. Commentators have suggested recently that Australia’s strategic risk is increasing and the A$195 billion defence spending plan announced in the 2016 Defence White Paper is now insufficient. Australian taxpayers would certainly be interested to know why a plan that doubles our submarine fleet, significantly expands our navy and adds 100 of the most advanced and expensive combat aircraft ever invented would now be seen as insufficient. The answer lies in the shifting strategic landscape in the Asia-Pacific region, which has led to greater concerns about China’s long-term intentions and rising tensions between China and the US. So what exactly has changed? China’s recent activities in the region Since the last Defence White Paper in 2016, Australian defence observers have been alarmed by four things: China’s rejection of the Permanent Court of Arbitration’s ruling that deemed its nine-dash line claim in the South China Sea illegal China’s conversion of its South China Sea artificial islands into military bases, which was largely complete by the end of 2016, despite a pledge President Xi Jinping gave then-President Barack Obama that China had “no intention to militarise” the islands Reports in April of this year that China was establishing partnerships with Pacific nations like Vanuatu for potential future military bases and other arrangements The election of Donald Trump as US president and the uncertainty this has brought to the region due to his disparaging of traditional alliances and disdain for multilateral institutions These events have occurred against a backdrop of China’s rapidly expanding global footprint. This includes the establishment of its first overseas military base in Djibouti on the Horn of Africa, and its growing access to regional ports such as the controversial Hambantota port in Sri Lanka, which the Sri Lankan government ceded to Beijing on a 99-year lease. These regional shifts have also come amid growing illiberalism in China, evidence of increasing Chinese intelligence and influence operations in Australia (especially the Dastyari affair) and bullying behaviour from Chinese officials in their meetings with Australian politicians. In addition, Trump appears to mark a significant break with the strategic priorities of previous US administrations. He’s threatened to walk away from America’s support for the traditional allies and global trade institutions that have characterised US foreign policy since the Second World War. This has put unprecedented distance between the United States and Australia, which as a middle power needs healthy global institutions. But in China, it’s different. The Trump administration and importantly, the US security apparatus, share Australia’s darkening view of China to the point we may now be seeing a new Cold War developing in the region. Case in point: the recent announcement of US participation in the development of a joint naval base with Australia on Papua New Guinea’s Manus Island. This is clear evidence of the US’s new willingness to compete with China and a signal the US wants to dispel the uncertainty left in the region in the wake of Obama’s problematic “pivot” to Asia. Assessing the risks for Australia In assessing whether Australia needs a steep increase in its defence spending, there are two questions we must ask: Firstly, what regional developments could the 2016 Defence White Paper not have anticipated? And of these, which equate to risks that increased defence spending can obviate? Our defence planners have been well aware since at least 2009 of China’s gradually modernising defence forces and steadily growing navy. China’s moves toward a blue-water fleet, including new carriers and cruisers, were also well understood in 2016. While the artificial islands in the South China Sea were still being built, their eventual militarisation was also anticipated by Australian defence leaders, despite China’s protestations to the contrary. But even knowing all of this, Australia’s defence planners essentially decided in the 2016 White Paper to continue with the “Force 2030” force structure they envisaged in 2009. There have been some additions like shore-based anti-ship missiles, but our plan has largely been focused on enablers – that is, the capability to make the force operate with greater certainty, precision and coordination. Importantly, this White Paper did not envisage Australia fighting China on its own. Of the strategic developments involving China since 2016 – from the revelations of its influence operations to its new-found interest in the Pacific – the question defence planners should now be asking is whether any undermine the fundamental judgements of the 2016 White Paper. Do they point to a need to radically change Australia’s defence posture? Combating China’s illicit influence in Australia is being dealt with through our stronger foreign influence laws. Offsetting China’s influence in the Pacific will be best undertaken through Australia’s aid and diplomatic programmes. This leaves the big question of the role of the US in the Asia-Pacific region – the most critical of defence planning factors. Will Australia be left on its own in the foreseeable future? And here we must observe that despite Trump’s anti-alliance rhetoric, the American force posture in the Western Pacific actually remains unchanged. There have been no base closures and no force draw-downs as of yet from the bases encircling China in Guam, Japan and South Korea, though Trump has threatened this. Moreover, the hardening US view against China means a likely strengthening of its Asia-Pacific posture under the new National Security Statement, the cardinal US security policy document. In fact, the US is now expanding its presence in the region with the announcement of the new joint naval base on Manus Island. The US also recently put its nuclear deterrence guarantee to Australia in writing for the first time in history. And the American Marine build-up in Darwin continues. Although China’s military advances are making the task of possibly defeating its navy more challenging, the fact remains that it will be a long time before it’s able to start a war with the US confident of victory. The US also seems unwilling to leave China to dominate Asia. In these circumstances, would China use its forces against other countries in the region, like Australia, without the US getting involved? In my view, it could not. Therefore, while every responsible government should continue to assess defence planning and ensure appropriate levels of readiness, the case for a sharply increased defence spending plan is not at this point compelling. (Greg Raymond is Research fellow, Australian National University) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

With China-US tensions on the rise, does Australia need a new defence strategy?

The World Trade Organisation (WTO) has agreed to hear complaints from a range of countries over United States’ steel and aluminium tariffs, as well as complaints from Washington over retaliatory duties. The August trade body’s Dispute Settlement Body(DBS) will establish panels to review US President Donald Trump's decision to hit a long line of countries with tariffs of 25 per cent on steel and 10 per cent on aluminium. In more senses than one, this is unalloyed good news.&nbsp;

The reasons pertain to the very nature of the WTO, the international trade and economics architecture which accrued from long and painful deliberations and negotiations post the Second World War and the extent global governance architecture and their survival.

It may be pointed out here that Donald Trump in his schemata and diagnosis of what plagued America, has opted for a narrow mercantilism and the protectionism that it entails, to “make America great again(MAGA). This approach as axiomatically entailed a confrontational stance not only with countries as diverse as China, Mexico, Canada and the European Union but also constitutes an assault on the intergovernmental and global governance architecture in place. 
&nbsp; 
The WTO, whose precursor was the General Agreement on Trade and Tariffs (GATT), has been a positive enabler of and for global trade, so much so that after the inception of the GATT and the then WTO world trade demonstrated a stupendous increase, even more than world output.&nbsp;

While economists continue to debate, contend and even quibble over the contribution of freer trade to economic growth and development, it has been empirically demonstrated that over the past six decades or so, there has been an unprecedented decline in global poverty rates. This decline has been attributed to the freeing of trade in goods and, to an extent, services. The WTO and its precursor have been central to these sanguine developments. However, there has also been a corresponding increase in inequality in many countries, especially in the Western world, including the United States. The reasons accrue not merely from the nature of trade and trade opening but the political economy and inadequate policy grids to deal with freer trade and its immediate consequences.

The WTO not only brought freed trade but also brought countries closer and enmeshed these into a complex interdependence paradigm which has been held to be an antidote to political conflicts and even war. But, enter Trump, and his version of trade and trade policy, there has been a veritable assault not only on international relations and world order in place after the Second Great War but also on intergovernmental organizations like the WTO. If Trump succeeds in decimating this order, world politics and economics will devolve into a zero-sum game where states and nations will seek to take advantage over other states, among other things. This zero-sum competition will have spillover political consequences with global and local conflicts looming on the horizon.&nbsp;

The corollary effect would also be felt on globalisation (which has already been impeded) and will be supplanted by deglobalisation. Added up, the world will be actually poorer, in the expansive sense and definition of the term. Even the United States will not be immune to negative structural winds from deglobalisation and shrinkage of world trade. While there might be immediate “windfalls” to reap, in the long term, the country will also be stung. 
&nbsp; 
With no one to turn to for dispute resolution, the zero-sum conflict between constituent states of the international system, would not merely fracture the international trading system but also its apex bodies like the WTO, leading to anarchy in the economic, trade and financial domains.&nbsp;

However, now with the putative activism of the WTO’s &nbsp;Dispute Settlement Body (DSB), there are reasons for hope. The world trade architecture might be salvaged and its institutions might occupy “pride of place” over visceral and reflexive mercantilism and protectionism. In the ultimate analysis, as history demonstrates, trade cannot entirely be the solvent of political conflicts but it can, to a large extent, dissipate these. The Japanese trading state might serve as a classic example of trade and trade policy ameliorating the worst instincts of a given nation. 
 
Alarmingly, if the WTO does not step up or is actually ignored, the zero-sum economic competition could take an uglier form and shape, with political divisions and conflicts supplanting these. Saving the WTO and making it central to trade and its concomitants is then not only an economic imperative but also a political and a moral one.

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp;

The World Trade Organisation (WTO) has agreed to hear complaints from a range of countries over United States’ steel and aluminium tariffs, as well as complaints from Washington over retaliatory duties.

The World Trade Organisation (WTO) has agreed to hear complaints from a range of countries over United States’ steel and aluminium tariffs, as well as complaints from Washington over retaliatory duties. The August trade body’s Dispute Settlement Body(DBS) will establish panels to review US President Donald Trump's decision to hit a long line of countries with tariffs of 25 per cent on steel and 10 per cent on aluminium. In more senses than one, this is unalloyed good news. The reasons pertain to the very nature of the WTO, the international trade and economics architecture which accrued from long and painful deliberations and negotiations post the Second World War and the extent global governance architecture and their survival. It may be pointed out here that Donald Trump in his schemata and diagnosis of what plagued America, has opted for a narrow mercantilism and the protectionism that it entails, to “make America great again(MAGA). This approach as axiomatically entailed a confrontational stance not only with countries as diverse as China, Mexico, Canada and the European Union but also constitutes an assault on the intergovernmental and global governance architecture in place. The WTO, whose precursor was the General Agreement on Trade and Tariffs (GATT), has been a positive enabler of and for global trade, so much so that after the inception of the GATT and the then WTO world trade demonstrated a stupendous increase, even more than world output. While economists continue to debate, contend and even quibble over the contribution of freer trade to economic growth and development, it has been empirically demonstrated that over the past six decades or so, there has been an unprecedented decline in global poverty rates. This decline has been attributed to the freeing of trade in goods and, to an extent, services. The WTO and its precursor have been central to these sanguine developments. However, there has also been a corresponding increase in inequality in many countries, especially in the Western world, including the United States. The reasons accrue not merely from the nature of trade and trade opening but the political economy and inadequate policy grids to deal with freer trade and its immediate consequences. The WTO not only brought freed trade but also brought countries closer and enmeshed these into a complex interdependence paradigm which has been held to be an antidote to political conflicts and even war. But, enter Trump, and his version of trade and trade policy, there has been a veritable assault not only on international relations and world order in place after the Second Great War but also on intergovernmental organizations like the WTO. If Trump succeeds in decimating this order, world politics and economics will devolve into a zero-sum game where states and nations will seek to take advantage over other states, among other things. This zero-sum competition will have spillover political consequences with global and local conflicts looming on the horizon. The corollary effect would also be felt on globalisation (which has already been impeded) and will be supplanted by deglobalisation. Added up, the world will be actually poorer, in the expansive sense and definition of the term. Even the United States will not be immune to negative structural winds from deglobalisation and shrinkage of world trade. While there might be immediate “windfalls” to reap, in the long term, the country will also be stung. With no one to turn to for dispute resolution, the zero-sum conflict between constituent states of the international system, would not merely fracture the international trading system but also its apex bodies like the WTO, leading to anarchy in the economic, trade and financial domains. However, now with the putative activism of the WTO’s Dispute Settlement Body (DSB), there are reasons for hope. The world trade architecture might be salvaged and its institutions might occupy “pride of place” over visceral and reflexive mercantilism and protectionism. In the ultimate analysis, as history demonstrates, trade cannot entirely be the solvent of political conflicts but it can, to a large extent, dissipate these. The Japanese trading state might serve as a classic example of trade and trade policy ameliorating the worst instincts of a given nation. Alarmingly, if the WTO does not step up or is actually ignored, the zero-sum economic competition could take an uglier form and shape, with political divisions and conflicts supplanting these. Saving the WTO and making it central to trade and its concomitants is then not only an economic imperative but also a political and a moral one. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Trade conflict: World Trade Organisation's primacy must be restored

China "very badly" wants to <a href="http://www.wionews.com/world/china-hasnt-altered-its-unfair-market-distorting-trade-practices-says-ustr-ahead-of-trump-xi-meet-178468">have a trade deal with the US</a>, President Trump has said ahead of a meeting with his Chinese counterpart Xi Jinping in Argentina on the sidelines of the G-20 Summit.

China and the US are currently locked in an ongoing trade war as each country has introduced tariffs on goods traded between each other. Trump has promised to fix China's "longtime abuse of the broken international system and unfair practices".&nbsp;

Over the past six months, Trump has imposed additional trade tariffs on import of Chinese products worth $250 billion. He said another tariff of equal amount is in the pipeline.

Trump and Xi are scheduled to meet on the sidelines of the G-20 summit in Argentina on November 30 and December 1.&nbsp;

President Trump said that the US was doing very well with China.

"We're doing very well with China. China wants to make a deal very badly. They might not say that to you, but they want to make it very badly," Trump told reporters at the White House before leaving for his personal Mar-a-Lago resort in Florida to spend Thanksgiving holidays.

He said that the US will impose another $250 billion on China if there is no deal.

"I have another $250 billion worth of tariffs to put on if we don't make a deal. Believe me, I'll be putting them on because China has been ripping off our country for many, many years. And they don't rip us off with me," Trump said.

He said that the US economy is doing quite well.

"I'd like to see the Fed with a lower interest rate. I think the rate is too high. I think we have much more of a Fed problem than we have a problem with anyone else," he said. 
Trump also said that he made a great deal with Canada and Mexico.

Referring to Mexico, he said: "I appreciate the help that Mexico is giving us at the border. You see that people are not coming through. All of the fistfights and the fighting that you see are done on the Mexico side. They're not coming in here. But I appreciate what Mexico is doing. They can do more, but I appreciate what they're doing ". 
&nbsp;

China "very badly" wants to have a trade deal with the US, President Trump has said ahead of a meeting with his Chinese counterpart Xi Jinping in Argentina on the sidelines of the G-20 Summit.

China "very badly" wants to have a trade deal with the US, President Trump has said ahead of a meeting with his Chinese counterpart Xi Jinping in Argentina on the sidelines of the G-20 Summit. China and the US are currently locked in an ongoing trade war as each country has introduced tariffs on goods traded between each other. Trump has promised to fix China's "longtime abuse of the broken international system and unfair practices". Over the past six months, Trump has imposed additional trade tariffs on import of Chinese products worth $250 billion. He said another tariff of equal amount is in the pipeline. Trump and Xi are scheduled to meet on the sidelines of the G-20 summit in Argentina on November 30 and December 1. President Trump said that the US was doing very well with China. "We're doing very well with China. China wants to make a deal very badly. They might not say that to you, but they want to make it very badly," Trump told reporters at the White House before leaving for his personal Mar-a-Lago resort in Florida to spend Thanksgiving holidays. He said that the US will impose another $250 billion on China if there is no deal. "I have another $250 billion worth of tariffs to put on if we don't make a deal. Believe me, I'll be putting them on because China has been ripping off our country for many, many years. And they don't rip us off with me," Trump said. He said that the US economy is doing quite well. "I'd like to see the Fed with a lower interest rate. I think the rate is too high. I think we have much more of a Fed problem than we have a problem with anyone else," he said. Trump also said that he made a great deal with Canada and Mexico. Referring to Mexico, he said: "I appreciate the help that Mexico is giving us at the border. You see that people are not coming through. All of the fistfights and the fighting that you see are done on the Mexico side. They're not coming in here. But I appreciate what Mexico is doing. They can do more, but I appreciate what they're doing ".

I have another $250 billion worth of tariffs, China wants to make a deal very badly, says Trump

The Trump administration on <a href="http://www.wionews.com/business-economy/full-blown-us-china-trade-war-will-slow-global-growth-by-less-than-1-imf-170313">Tuesday said that China has</a> failed to alter its "unfair" practices at the heart of the US-China trade conflict, adding to tensions ahead of a high-stakes meeting later this month between US&nbsp;President Donald Trump and Chinese President Xi Jinping.

The findings were issued in an update of the US&nbsp;Trade Representative's "Section 301" investigation into China's intellectual property and technology transfer policies, which sparked US&nbsp;tariffs on $50 billion worth of Chinese goods that later ballooned to $250 billion.

"We completed this update as part of this Administration's strengthened monitoring and enforcement effort," USTR Robert Lighthizer said in a statement. "This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation."

In the update, USTR said it had found that China had not responded "constructively" to the initial section 301 reports and failed to take any substantive actions to address US&nbsp;concerns. It added that China had made clear it would not change its policies in response to the initial investigation.

USTR said that China was continuing its policy and practice of conducting and supporting cyber-enabled theft of US&nbsp;intellectual property and was continuing discriminatory technology licensing restrictions.

The update said that despite the relaxation of some foreign ownership restrictions, "the Chinese government has persisted in using foreign investment restrictions to require or pressure the transfer of technology from US&nbsp;companies to Chinese entities."

The report comes as the Trump administration and top Chinese officials are discussing possible ways out of their trade war and negotiating details of the Trump-Xi meeting on the sidelines of the G20 leaders summit in Buenos Aires at the end of November.

But acrimonious trade rhetoric between the governments of the world's two largest economies has been increasing in recent days, spilling over into an Asia-Pacific Economic Cooperation (APEC) summit last weekend.

A top Chinese diplomat said on Tuesday that the failure of APEC officials to agree on a communique from the summit was a result of certain countries "excusing" protectionism, a veiled criticism of Washington's tariffs.

US vice president Mike Pence had said on Saturday that the United States would not back down from the trade dispute, and might even double tariffs, unless Beijing bowed to US&nbsp;demands.

The Trump administration on Tuesday said that China has failed to alter its "unfair" practices at the heart of the US-China trade conflict, adding to tensions ahead of a high-stakes meeting later this month between US President Donald Trump and Chinese President Xi Jinping.

The Trump administration on Tuesday said that China has failed to alter its "unfair" practices at the heart of the US-China trade conflict, adding to tensions ahead of a high-stakes meeting later this month between US President Donald Trump and Chinese President Xi Jinping. The findings were issued in an update of the US Trade Representative's "Section 301" investigation into China's intellectual property and technology transfer policies, which sparked US tariffs on $50 billion worth of Chinese goods that later ballooned to $250 billion. "We completed this update as part of this Administration's strengthened monitoring and enforcement effort," USTR Robert Lighthizer said in a statement. "This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation." In the update, USTR said it had found that China had not responded "constructively" to the initial section 301 reports and failed to take any substantive actions to address US concerns. It added that China had made clear it would not change its policies in response to the initial investigation. USTR said that China was continuing its policy and practice of conducting and supporting cyber-enabled theft of US intellectual property and was continuing discriminatory technology licensing restrictions. The update said that despite the relaxation of some foreign ownership restrictions, "the Chinese government has persisted in using foreign investment restrictions to require or pressure the transfer of technology from US companies to Chinese entities." The report comes as the Trump administration and top Chinese officials are discussing possible ways out of their trade war and negotiating details of the Trump-Xi meeting on the sidelines of the G20 leaders summit in Buenos Aires at the end of November. But acrimonious trade rhetoric between the governments of the world's two largest economies has been increasing in recent days, spilling over into an Asia-Pacific Economic Cooperation (APEC) summit last weekend. A top Chinese diplomat said on Tuesday that the failure of APEC officials to agree on a communique from the summit was a result of certain countries "excusing" protectionism, a veiled criticism of Washington's tariffs. US vice president Mike Pence had said on Saturday that the United States would not back down from the trade dispute, and might even double tariffs, unless Beijing bowed to US demands.

China hasn't altered its unfair, market-distorting trade practices, says USTR ahead of Trump, Xi meet

The year 2018 has been an exceptional year for India-US economic relations. Trade tensions triggered by protectionist measures taken by the US Administration following the show of aggressive intent by President Donald Trump against the major economies, has left India in a piquant situation.

While several of those targeted have either adopted retaliatory measures or have decided to concede ground to the largest economic power, India seems to have been caught between the imperatives of maintaining a policy of non-confrontation with its strategic partner, on the one hand, and to protect the interests of domestic manufacturing industry, especially when the industry is facing some of the most serious challenges.

In March, President Trump announced his decision to block imports by imposing “reciprocal tax” against countries using tariffs on American products. The objective was to trigger the revival of the American manufacturing sector. Through a Presidential Proclamation, import tariffs of 25 per cent and 10 per cent were imposed on steel and aluminium, by invoking the provisions of Section 232 of the Trade Expansion Act of 1962. This provision allows the Administration to take measures to protect domestic industries for “national defence” and “national security”.

India was among the countries adversely affected by increased import tariffs on steel and aluminium. Indian exporters faced an additional burden of $241 million arising from the proposed import duties, which was nearly 20 per cent of their export realisations in calendar year 2017.

Until 2015-16, the United States was one of the largest markets for the Indian industry, with an export share of above 8 per cent. In the subsequent years, exports declined precipitously, and the export share dipped to less than half in the subsequent years.

With its exports to one of the world’s largest steel markets already on a down-hill, Indian steel industry, thus faced an uncertain future.

Like most affected countries, India tried to initiate negotiations with the US government by announcing retaliatory measures. In May, India submitted a notification in the WTO, indicating that tariffs on 20 products imported from the US would be increased.

Included in this list were agricultural products like soya beans and palmolein, and the American icon, Harley Davidson motorcycles. In a later notification in June, India increased the list to 30 products, but subsequently, Harley Davidson was taken off the list.

Although the increase in import duties were to take effect from August 4, this action was deferred, presumably because of the two-by-two dialogue between India and the US, which was held in the third week of August.

While India’s position has been to find a negotiated solution to the trade frictions, the US Administration has adopted an aggressive stance towards India and other trade partners, which was underlined by President Trump.

Yet another evidence of this stance was the increase in anti-dumping actions against India in 2018. Until mid-November, the US Customs and Border Protection had taken anti-dumping actions against 27 products exported by India, the highest in recent years.

Interestingly, a majority of these products included those from the iron and steel industry. This shows that the injury to the Indian industry that began with the tariff hikes in March, was heightened by the anti-dumping action.

The most recent of US actions against India was the Presidential Proclamation of October 30 (Proclamation 9813) “To Modify the List of Products Eligible for Duty-Free Treatment Under the Generalized System of Preferences”.

This Proclamation gave a list of products from the developing countries, which would not receive duty-free access into the United States market from November 1, 2018, that they had hitherto enjoyed under the Generalized System of Preferences (GSP).

The GSP was introduced in 1971 after the second session of the United Nations Conference on Trade and Development (UNCTAD) had unanimously adopted it in 1968. Under the GSP, developing countries’ exports were granted duty-free access by the developed countries. Developed countries thus granted unilateral trade concessions to the developing countries for increasing their exports.

The US Trade Administration annually reviews the GSP preferences, examining whether exports from developing countries conform to Competitive Need Limitations (CNL).

A developing country can lose its GSP benefits on any product if the CNLs are exceeded. Two measures are adopted for assessing CNLs: import of a product from a beneficiary developing country accounts for 50 per cent or more of the total imports of the product; or imports exceed a certain dollar value, which was set at $180 million in 2017.

Enforcement of CNLs is subject to waivers, the main being the de minimis waiver. This waiver sets a floor for the value of imported products below which CNLs cannot be enforced. In 2017, the floor was set at $23.5 million.

In its current year’s review, the US identified 94 products from 16 countries, which would lose GSP benefits from November 1, 2018. This list included 50 products imported from India, by far the largest number for any GSP beneficiary.

The list of products targeting imports from India are all relatively low-value products; more than half of the 50 products had import values of less than $1 million in 2017.

The product with the highest import value in 2017, hand-loomed carpet and other textile floor coverings, was just $10.3 million, way below the CNL threshold of $180 million. The Indian products for which US has withdrawn GSP benefits, clearly qualify for de minimis waiver, since their import values were below the threshold of $23.5 million in 2017.

It is time that the government of India protects the interests of the domestic manufacturing industry from the increasingly protectionist American Administration.

(This article was originally published on DNA. Read the <a href="https://www.dnaindia.com/analysis/column-battling-against-us-protectionism-2687311">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

The year 2018 has been an exceptional year for India-US economic relations. Trade tensions triggered by protectionist measures taken by the US Administration following the show of aggressive intent by President Donald Trump against the major economies, has left India in a piquant situation.

The year 2018 has been an exceptional year for India-US economic relations. Trade tensions triggered by protectionist measures taken by the US Administration following the show of aggressive intent by President Donald Trump against the major economies, has left India in a piquant situation. While several of those targeted have either adopted retaliatory measures or have decided to concede ground to the largest economic power, India seems to have been caught between the imperatives of maintaining a policy of non-confrontation with its strategic partner, on the one hand, and to protect the interests of domestic manufacturing industry, especially when the industry is facing some of the most serious challenges. In March, President Trump announced his decision to block imports by imposing “reciprocal tax” against countries using tariffs on American products. The objective was to trigger the revival of the American manufacturing sector. Through a Presidential Proclamation, import tariffs of 25 per cent and 10 per cent were imposed on steel and aluminium, by invoking the provisions of Section 232 of the Trade Expansion Act of 1962. This provision allows the Administration to take measures to protect domestic industries for “national defence” and “national security”. India was among the countries adversely affected by increased import tariffs on steel and aluminium. Indian exporters faced an additional burden of $241 million arising from the proposed import duties, which was nearly 20 per cent of their export realisations in calendar year 2017. Until 2015-16, the United States was one of the largest markets for the Indian industry, with an export share of above 8 per cent. In the subsequent years, exports declined precipitously, and the export share dipped to less than half in the subsequent years. With its exports to one of the world’s largest steel markets already on a down-hill, Indian steel industry, thus faced an uncertain future. Like most affected countries, India tried to initiate negotiations with the US government by announcing retaliatory measures. In May, India submitted a notification in the WTO, indicating that tariffs on 20 products imported from the US would be increased. Included in this list were agricultural products like soya beans and palmolein, and the American icon, Harley Davidson motorcycles. In a later notification in June, India increased the list to 30 products, but subsequently, Harley Davidson was taken off the list. Although the increase in import duties were to take effect from August 4, this action was deferred, presumably because of the two-by-two dialogue between India and the US, which was held in the third week of August. While India’s position has been to find a negotiated solution to the trade frictions, the US Administration has adopted an aggressive stance towards India and other trade partners, which was underlined by President Trump. Yet another evidence of this stance was the increase in anti-dumping actions against India in 2018. Until mid-November, the US Customs and Border Protection had taken anti-dumping actions against 27 products exported by India, the highest in recent years. Interestingly, a majority of these products included those from the iron and steel industry. This shows that the injury to the Indian industry that began with the tariff hikes in March, was heightened by the anti-dumping action. The most recent of US actions against India was the Presidential Proclamation of October 30 (Proclamation 9813) “To Modify the List of Products Eligible for Duty-Free Treatment Under the Generalized System of Preferences”. This Proclamation gave a list of products from the developing countries, which would not receive duty-free access into the United States market from November 1, 2018, that they had hitherto enjoyed under the Generalized System of Preferences (GSP). The GSP was introduced in 1971 after the second session of the United Nations Conference on Trade and Development (UNCTAD) had unanimously adopted it in 1968. Under the GSP, developing countries’ exports were granted duty-free access by the developed countries. Developed countries thus granted unilateral trade concessions to the developing countries for increasing their exports. The US Trade Administration annually reviews the GSP preferences, examining whether exports from developing countries conform to Competitive Need Limitations (CNL). A developing country can lose its GSP benefits on any product if the CNLs are exceeded. Two measures are adopted for assessing CNLs: import of a product from a beneficiary developing country accounts for 50 per cent or more of the total imports of the product; or imports exceed a certain dollar value, which was set at $180 million in 2017. Enforcement of CNLs is subject to waivers, the main being the de minimis waiver. This waiver sets a floor for the value of imported products below which CNLs cannot be enforced. In 2017, the floor was set at $23.5 million. In its current year’s review, the US identified 94 products from 16 countries, which would lose GSP benefits from November 1, 2018. This list included 50 products imported from India, by far the largest number for any GSP beneficiary. The list of products targeting imports from India are all relatively low-value products; more than half of the 50 products had import values of less than $1 million in 2017. The product with the highest import value in 2017, hand-loomed carpet and other textile floor coverings, was just $10.3 million, way below the CNL threshold of $180 million. The Indian products for which US has withdrawn GSP benefits, clearly qualify for de minimis waiver, since their import values were below the threshold of $23.5 million in 2017. It is time that the government of India protects the interests of the domestic manufacturing industry from the increasingly protectionist American Administration. (This article was originally published on DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Battling against US protectionism

The <a href="http://www.wionews.com/world/us-legislation-to-urge-possible-china-sanctions-over-xinjiang-crackdown-177217">United States</a> is facing a national security and military crisis and could lose in a war against Russia or China, a bipartisan congressional panel warned in a report Wednesday.

Congress had tasked the National Defense Strategy Commission to look at President Donald Trump's sweeping National Defense Strategy (NDS), which highlights a new era of "Great Power competition" with Moscow and Beijing.

The panel, run by a dozen former top Democratic and Republican officials, found that just as the US military faced budget cuts and diminishing military advantages, authoritarian nations like China and Russia are pursuing buildups aimed "at neutralizing US strengths."

"America's military superiority -- the hard-power backbone of its global influence and national security -- has eroded to a dangerous degree," the commission said.

In their report, the panel found America's focus on counter-insurgency operations this century resulted in it slipping in other warfighting areas such as missile defence, cyber and space operations, and anti-surface and anti-submarine warfare.

"Many of the skills necessary to plan for and conduct military operations against capable adversaries -- especially China and Russia -- have atrophied," the report states.

It lambasts "political dysfunction and decisions made by both major political parties," especially budget control measures implemented in 2011.

"The convergence of these trends has created a crisis of national security for the United States," the report notes.

While the NDS points the Pentagon in the right direction, it "too often rests on questionable assumptions and weak analysis." "It leaves unanswered critical questions regarding how the United States will meet the challenges of a more dangerous world," the report found.

The commission also said that across Asia and Europe, American influence is being steadily eroded and military balances have shifted in "decidedly adverse" ways that have raised the risk of conflict.

"The US military could suffer unacceptably high casualties and loss of major capital assets in its next conflict," the commission found.

"It might struggle to win, or perhaps lose, a war against China or Russia.&nbsp;

The United States is particularly at risk of being overwhelmed should its military be forced to fight on two or more fronts simultaneously."&nbsp;

Though the Pentagon this year has a budget of more than $700 billion, far more than Russia and China combined, the commission said the sum is still "clearly insufficient" to meet the goals laid out in the NDS.

Commissioners made a series of recommendations including a 3-5 per cent annual increase in the defence budget.&nbsp;

The United States is facing a national security and military crisis and could lose in a war against Russia or China, a bipartisan congressional panel warned in a report Wednesday.

The United States is facing a national security and military crisis and could lose in a war against Russia or China, a bipartisan congressional panel warned in a report Wednesday. Congress had tasked the National Defense Strategy Commission to look at President Donald Trump's sweeping National Defense Strategy (NDS), which highlights a new era of "Great Power competition" with Moscow and Beijing. The panel, run by a dozen former top Democratic and Republican officials, found that just as the US military faced budget cuts and diminishing military advantages, authoritarian nations like China and Russia are pursuing buildups aimed "at neutralizing US strengths." "America's military superiority -- the hard-power backbone of its global influence and national security -- has eroded to a dangerous degree," the commission said. In their report, the panel found America's focus on counter-insurgency operations this century resulted in it slipping in other warfighting areas such as missile defence, cyber and space operations, and anti-surface and anti-submarine warfare. "Many of the skills necessary to plan for and conduct military operations against capable adversaries -- especially China and Russia -- have atrophied," the report states. It lambasts "political dysfunction and decisions made by both major political parties," especially budget control measures implemented in 2011. "The convergence of these trends has created a crisis of national security for the United States," the report notes. While the NDS points the Pentagon in the right direction, it "too often rests on questionable assumptions and weak analysis." "It leaves unanswered critical questions regarding how the United States will meet the challenges of a more dangerous world," the report found. The commission also said that across Asia and Europe, American influence is being steadily eroded and military balances have shifted in "decidedly adverse" ways that have raised the risk of conflict. "The US military could suffer unacceptably high casualties and loss of major capital assets in its next conflict," the commission found. "It might struggle to win, or perhaps lose, a war against China or Russia. The United States is particularly at risk of being overwhelmed should its military be forced to fight on two or more fronts simultaneously." Though the Pentagon this year has a budget of more than $700 billion, far more than Russia and China combined, the commission said the sum is still "clearly insufficient" to meet the goals laid out in the NDS. Commissioners made a series of recommendations including a 3-5 per cent annual increase in the defence budget.

US could lose in war with China or Russia, bipartisan congressional panel warns

By Stephen Chan

As China and the US continue their trade war, what will be the outcome for Africa?

This trade war should not be seen in isolation, and the new year will bring a changed world. China and Russia will cooperate as the new Silk Road begins to join Asia and Europe with a transport and communications corridor Marco Polo could not even imagine.

Russia, Turkey and Iran – once unlikely partners in the Syrian conflict – will form a new Middle East axis to rival that of the US, Israel and Saudi Arabia, with none of the latent instabilities of the latter with its Zionist and Islamic ingredients.

And the US, under Donald Trump, is likely to continue to view Africa – in all but name – as that collection of “shit hole” countries derided by the American president at his undiplomatic, offensive and unthinking worst.

After two years without one, the US will have a permanent assistant secretary of state for Africa – the highest State Department official with an Africa portfolio. Tibor Nagy also comes with a sound reputation as a seasoned diplomat. But will he have any clout on Capitol Hill? And can any official be effective in a State Department that Trump and the former US secretary of state, Rex Tillerson, have slashed and burned?

May’s dancing and used clothes

If the US doesn’t care much for Africa, neither really does the UK. Theresa May’s dismal efforts at dancing on her Africa tour summed up a clumsy view of what the continent needs.

The UK posture is summed up by the position of minister of state for Africa – now held by Harriet Baldwin – with responsibilities in two departments: the Foreign Office and International Development. These are two very different departments and the joint position is both a money-saving device – two ministers for the price of one – and also a confusion of policy as to how the UK should approach Africa. Indeed, perhaps the beleaguered minister’s main responsibility is the search for new UK trading partners in the wake of Brexit.

The US approach to Africa, meanwhile, was summed up in measures launched between May and September 2018: basically, the suspension by the US of trade benefits to Rwanda because of Rwanda’s refusal to import &nbsp;used clothes from the US. In continental terms, the sums are tiny, but the principle enunciated by Rwandan president, Paul Kagame, was stark.

If the volume of used clothes continues or increases, there can be no development of a Rwandan textile industry. In effect, the US is dumping textiles on Rwanda in much the same way as it once dumped grain so cheaply that African farmers could not even begin to compete and agriculture could not develop. For Trump, in his trade wars not just with China but with the world, blue collar manufacturing in his heartland is more important than good relations with anyone.

For a populist president this is dangerous but perhaps understandable. But who has drawn first blood in this US-China standoff? Chinese economic growth has slowed – but only to 6.5 per cent a year, a growth figure for which most other countries would die. The value of the Chinese yuan against the dollar seems destined to fall, but Chinese reserves, divided almost equally between foreign and domestic reserves, of about $60-$70 trillion, are more than enough to weather the storms to come. Added to what the Chinese did during the US financial crisis of 2007 to 2010 – buying up huge quantities of US toxic debt – China has far more leverage on the US economy than the US has on China’s.

China and Africa 
 
For Africa, it means business with China remains a reality. This relationship has, however, taken on two key new characteristics of late. The first is that China expects its loans to be repaid. Indeed, there is no doubt that a new fiscal propriety is now expected by the Chinese.

The second, very closely connected development – and one which curiously seems not to have been noticed or taken seriously by African leaders – is that increasingly Chinese liquidity is made available not on a state-to-state basis but on a Chinese bank to African state basis.

They may be Chinese state banks – but a bank is a bank, and a bank needs to ensure its loans are repaid and its lending to assets ratio is robust. The use of banks reflects a global Chinese turn to the creation of international and regional banks and funds, most noticeable in Asia-Pacific. The Chinese capitalise these regional funds to the tune of about $50 billion a time. But this means the beginning of a new Chinese global financial infrastructure that seems deliberately designed to rival the IMF and the World Bank. It’s not just a trade war but a war over who will control the world’s financial flows in the long term.

For Africa, the choice is between growth with borrowed liquidity and growth without – the latter being very difficult. Investment doesn’t come out of anything, so wise spending of borrowed liquidity is key. It cannot be just for standby budgetary support without product and without exportable value – which is why the Chinese turned down Zimbabwe’s desperate pleas for exactly that.

An uncertain future 
 
The future will embroil Africa even more in the trade wars to come. What Africa needs to do is to industrialise – to add manufacturing to its raw materials. The long-awaited oil refinery in Nigeria is the perfect example. How a significant oil-producing country could spend so many years exporting crude and then reimporting it as a refined product beggars description. The revenue streams would have always been greater if it had been exported refined.

Trouble is, African industry will create jobs in Africa but take away blue collar jobs elsewhere. And the West won’t like that.

But what about China? African governments must navigate the attractions of the quick fix via Chinese loans, and seek the development of long-term industrial capacity. Or will the next decade be another of missed opportunities – with trade wars steamrollering an Africa whose response will be to plunge again deeper and deeper into debt?

(Stephen Chan is Professor of World Politics, SOAS, University of London)

This article was originally published on The Conversation. Read the <a href="https://theconversation.com/will-us-china-trade-war-ruin-africa-or-offer-new-opportunities-national-leaders-must-decide-106499">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

&nbsp;

By Stephen Chan As China and the US continue their trade war, what will be the outcome for Africa? This trade war should not be seen in isolation, and the new year will bring a changed world.

By Stephen Chan As China and the US continue their trade war, what will be the outcome for Africa? This trade war should not be seen in isolation, and the new year will bring a changed world. China and Russia will cooperate as the new Silk Road begins to join Asia and Europe with a transport and communications corridor Marco Polo could not even imagine. Russia, Turkey and Iran – once unlikely partners in the Syrian conflict – will form a new Middle East axis to rival that of the US, Israel and Saudi Arabia, with none of the latent instabilities of the latter with its Zionist and Islamic ingredients. And the US, under Donald Trump, is likely to continue to view Africa – in all but name – as that collection of “shit hole” countries derided by the American president at his undiplomatic, offensive and unthinking worst. After two years without one, the US will have a permanent assistant secretary of state for Africa – the highest State Department official with an Africa portfolio. Tibor Nagy also comes with a sound reputation as a seasoned diplomat. But will he have any clout on Capitol Hill? And can any official be effective in a State Department that Trump and the former US secretary of state, Rex Tillerson, have slashed and burned? May’s dancing and used clothes If the US doesn’t care much for Africa, neither really does the UK. Theresa May’s dismal efforts at dancing on her Africa tour summed up a clumsy view of what the continent needs. The UK posture is summed up by the position of minister of state for Africa – now held by Harriet Baldwin – with responsibilities in two departments: the Foreign Office and International Development. These are two very different departments and the joint position is both a money-saving device – two ministers for the price of one – and also a confusion of policy as to how the UK should approach Africa. Indeed, perhaps the beleaguered minister’s main responsibility is the search for new UK trading partners in the wake of Brexit. The US approach to Africa, meanwhile, was summed up in measures launched between May and September 2018: basically, the suspension by the US of trade benefits to Rwanda because of Rwanda’s refusal to import used clothes from the US. In continental terms, the sums are tiny, but the principle enunciated by Rwandan president, Paul Kagame, was stark. If the volume of used clothes continues or increases, there can be no development of a Rwandan textile industry. In effect, the US is dumping textiles on Rwanda in much the same way as it once dumped grain so cheaply that African farmers could not even begin to compete and agriculture could not develop. For Trump, in his trade wars not just with China but with the world, blue collar manufacturing in his heartland is more important than good relations with anyone. For a populist president this is dangerous but perhaps understandable. But who has drawn first blood in this US-China standoff? Chinese economic growth has slowed – but only to 6.5 per cent a year, a growth figure for which most other countries would die. The value of the Chinese yuan against the dollar seems destined to fall, but Chinese reserves, divided almost equally between foreign and domestic reserves, of about $60-$70 trillion, are more than enough to weather the storms to come. Added to what the Chinese did during the US financial crisis of 2007 to 2010 – buying up huge quantities of US toxic debt – China has far more leverage on the US economy than the US has on China’s. China and Africa For Africa, it means business with China remains a reality. This relationship has, however, taken on two key new characteristics of late. The first is that China expects its loans to be repaid. Indeed, there is no doubt that a new fiscal propriety is now expected by the Chinese. The second, very closely connected development – and one which curiously seems not to have been noticed or taken seriously by African leaders – is that increasingly Chinese liquidity is made available not on a state-to-state basis but on a Chinese bank to African state basis. They may be Chinese state banks – but a bank is a bank, and a bank needs to ensure its loans are repaid and its lending to assets ratio is robust. The use of banks reflects a global Chinese turn to the creation of international and regional banks and funds, most noticeable in Asia-Pacific. The Chinese capitalise these regional funds to the tune of about $50 billion a time. But this means the beginning of a new Chinese global financial infrastructure that seems deliberately designed to rival the IMF and the World Bank. It’s not just a trade war but a war over who will control the world’s financial flows in the long term. For Africa, the choice is between growth with borrowed liquidity and growth without – the latter being very difficult. Investment doesn’t come out of anything, so wise spending of borrowed liquidity is key. It cannot be just for standby budgetary support without product and without exportable value – which is why the Chinese turned down Zimbabwe’s desperate pleas for exactly that. An uncertain future The future will embroil Africa even more in the trade wars to come. What Africa needs to do is to industrialise – to add manufacturing to its raw materials. The long-awaited oil refinery in Nigeria is the perfect example. How a significant oil-producing country could spend so many years exporting crude and then reimporting it as a refined product beggars description. The revenue streams would have always been greater if it had been exported refined. Trouble is, African industry will create jobs in Africa but take away blue collar jobs elsewhere. And the West won’t like that. But what about China? African governments must navigate the attractions of the quick fix via Chinese loans, and seek the development of long-term industrial capacity. Or will the next decade be another of missed opportunities – with trade wars steamrollering an Africa whose response will be to plunge again deeper and deeper into debt? (Stephen Chan is Professor of World Politics, SOAS, University of London) This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Will US-China trade war ruin Africa or offer new opportunities?

WION Dispatch: US-China dialogue amid trade tensions; top officials to meet ahead of Xi-Trump meet

The US-China trade war is the "stupidest thing in the world," <a href="http://www.wionews.com/business-economy/full-blown-us-china-trade-war-will-slow-global-growth-by-less-than-1-imf-170313">Alibaba e-commerce tycoon Jack Ma declared </a>at an import fair that China opened Monday partly to counter foreign criticism of its trade policies.

Ma, who recently took back an earlier pledge to create a million jobs in the US - blaming the trade war launched by Donald Trump - made the comments in a panel discussion at the massive expo in Shanghai.

"(The) trade war is the most stupidest thing in this world," the Alibaba founder said, without mentioning Trump by name.

"Trade is to form ... peace. Trade is to communicate...nobody can stop free trade."

President Xi Jinping opened the China International Import Expo earlier Monday with a vague pledge to widen access to his country's economy, as Beijing faces growing impatience from trading partners.

But he also delivered a veiled rebuke to Trumpism, decrying "protectionism", "isolationism" and "the law of the jungle".

Ma, the billionaire owner of China's largest online shopping portal, made the headline-grabbing job-creation promise to Trump last year, when Beijing was still courting the then-newly elected president.&nbsp;

But Ma told official news agency Xinhua in September that the trade war had "destroyed the premise the promise was made on."&nbsp;

Anger over the trade surpluses that China enjoys has triggered growing foreign criticism and the worsening commercial conflict with Washington, which has seen both sides impose punitive tariffs on hundreds of billions of dollars worth of goods.

Beijing has touted the first annual import expo as a sign of its willingness to take in more imports and thereby reduce the surpluses.

Ma, who announced in September that he would step aside in a year's time to focus on philanthropy, said China's plans to remake itself as an importing nation would provoke resistance from vested interests.

"For my understanding, it's the greatest challenge for China. It’s a great opportunity for the world," he said.

The shift will "fundamentally change ... the whole infrastructure of business and (the) ecosystem. It’s going to be a huge pain to a lot of businesses, but it’s also going to be a good opportunity for a lot of consumers."

The US-China trade war is the "stupidest thing in the world," Alibaba e-commerce tycoon Jack Ma declared at an import fair that China opened Monday partly to counter foreign criticism of its trade policies.

The US-China trade war is the "stupidest thing in the world," Alibaba e-commerce tycoon Jack Ma declared at an import fair that China opened Monday partly to counter foreign criticism of its trade policies. Ma, who recently took back an earlier pledge to create a million jobs in the US - blaming the trade war launched by Donald Trump - made the comments in a panel discussion at the massive expo in Shanghai. "(The) trade war is the most stupidest thing in this world," the Alibaba founder said, without mentioning Trump by name. "Trade is to form ... peace. Trade is to communicate...nobody can stop free trade." President Xi Jinping opened the China International Import Expo earlier Monday with a vague pledge to widen access to his country's economy, as Beijing faces growing impatience from trading partners. But he also delivered a veiled rebuke to Trumpism, decrying "protectionism", "isolationism" and "the law of the jungle". Ma, the billionaire owner of China's largest online shopping portal, made the headline-grabbing job-creation promise to Trump last year, when Beijing was still courting the then-newly elected president. But Ma told official news agency Xinhua in September that the trade war had "destroyed the premise the promise was made on." Anger over the trade surpluses that China enjoys has triggered growing foreign criticism and the worsening commercial conflict with Washington, which has seen both sides impose punitive tariffs on hundreds of billions of dollars worth of goods. Beijing has touted the first annual import expo as a sign of its willingness to take in more imports and thereby reduce the surpluses. Ma, who announced in September that he would step aside in a year's time to focus on philanthropy, said China's plans to remake itself as an importing nation would provoke resistance from vested interests. "For my understanding, it's the greatest challenge for China. It’s a great opportunity for the world," he said. The shift will "fundamentally change ... the whole infrastructure of business and (the) ecosystem. It’s going to be a huge pain to a lot of businesses, but it’s also going to be a good opportunity for a lot of consumers."

Trade war stupidest thing in the world: Alibaba founder Jack Ma

The <a href="http://www.wionews.com/world/the-trump-china-trade-war-how-will-it-end-171248">US-China tariff slugfest</a> has for months triggered warnings that it could impact global economic growth, and recent data indicates the trade tension is indeed beginning to bite.

Manufacturing gauges in several export-reliant Asian countries, as well as China, weakened in October as gloom deepens over the trade outlook.

China's official Purchasing Managers' Index (PMI), which measures factory activity, came in at 50.2 in October, down from 50.8 the previous month, the latest sign of weakness in the world's second-largest economy amid the trade war and a domestic debt problem.

But China's troubles are bad for the rest of the region, and the world, analysts said.

Asian exporting countries from South Korea to Malaysia saw PMI decreases in October, according to indices compiled by Nikkei/IHS Markit.

Taiwan saw its steepest falls in production and new business in just over three years, purchasing activity by companies fell for the first time since May 2016, and firms anticipate lower factory output in the next 12 months, Nikkei/IHS Markit said.

"Taiwan is feeling the effects of this trade war because China is the factory for many companies in Taiwan. When the estuary is blocked, you feel the effects," said Sun Ming-te of the Taiwan Institute of Economic Research.

Paying the price 
South Korea's PMI slipped to 51.0 in October from 51.3 in September, while a separate Korean business sentiment index for manufacturing sank to its lowest level in two years.

China is South Korea's largest trading partner, absorbing a quarter of Korean exports.

"The situation may get worse next year due to a prolonged trade war between the US and China, growing default risks at debt-plagued Chinese firms and a slowing global economy that reduces demand for our exports," said c, an analyst at the Korea Institute of Finance.

Southeast Asian manufacturers were feeling the effects too, with PMI in Malaysia and Thailand slipping below the 50-point level, which indicates contraction in the sector.

It was Malaysia's lowest PMI since July and Thailand's lowest in two years.

In an AFP interview last week, Malaysian Prime Minister Mahathir Mohamad complained that US President Donald Trump -- who has accused various trading partners of "ripping off" America -- "seems to be withdrawing from all commitments overseas".

Mahathir, 93, said that hurts everyone, including the US.

"We want to remain friendly with the US, and we want to continue trading with the US," Mahathir said.

"But the trade war that is going on between the US and China is damaging for us. We have to pay a price for that."

Vietnam or bust 
The International Monetary Fund warned at its annual meeting last month that the trade friction and other threats would hobble the world economy, lowering its growth forecasts for 2018 and 2019.

The Eurozone posted disappointing PMI figures in October, though due largely to factors other than trade tension.

But not everyone feels the shock yet, with Japan's manufacturing looking solid last month.

Trump, meanwhile, faces little pressure to tame his trade rhetoric at home, with a rosy US outlook marked by rising wages and low unemployment.

And even in Asia, there will be some winners as conflict re-aligns trading patterns, economists noted.

Vietnam, in particular, looks to gain as foreign manufacturers relocate out of China to escape the trade war crossfire and what many say is an increasingly unfair playing field for foreign companies in China.

Vietnam PMI climbed from a ten-month low of 51.5 in September to 53.9 last month.

"The hard data on exports and industrial production in recent months haven't been that great. The latest survey nonetheless shows how Vietnam is weathering the US-China trade war better than its ASEAN peers," Miguel Chanco, senior economist at Pantheon Macroeconomics, told AFP.

"If the trade war escalates, Vietnam will be one of the prime destinations for export-oriented firms looking to move out of China."

The US-China tariff slugfest has for months triggered warnings that it could impact global economic growth, and recent data indicates the trade tension is indeed beginning to bite.

The US-China tariff slugfest has for months triggered warnings that it could impact global economic growth, and recent data indicates the trade tension is indeed beginning to bite. Manufacturing gauges in several export-reliant Asian countries, as well as China, weakened in October as gloom deepens over the trade outlook. China's official Purchasing Managers' Index (PMI), which measures factory activity, came in at 50.2 in October, down from 50.8 the previous month, the latest sign of weakness in the world's second-largest economy amid the trade war and a domestic debt problem. But China's troubles are bad for the rest of the region, and the world, analysts said. Asian exporting countries from South Korea to Malaysia saw PMI decreases in October, according to indices compiled by Nikkei/IHS Markit. Taiwan saw its steepest falls in production and new business in just over three years, purchasing activity by companies fell for the first time since May 2016, and firms anticipate lower factory output in the next 12 months, Nikkei/IHS Markit said. "Taiwan is feeling the effects of this trade war because China is the factory for many companies in Taiwan. When the estuary is blocked, you feel the effects," said Sun Ming-te of the Taiwan Institute of Economic Research. Paying the price South Korea's PMI slipped to 51.0 in October from 51.3 in September, while a separate Korean business sentiment index for manufacturing sank to its lowest level in two years. China is South Korea's largest trading partner, absorbing a quarter of Korean exports. "The situation may get worse next year due to a prolonged trade war between the US and China, growing default risks at debt-plagued Chinese firms and a slowing global economy that reduces demand for our exports," said c, an analyst at the Korea Institute of Finance. Southeast Asian manufacturers were feeling the effects too, with PMI in Malaysia and Thailand slipping below the 50-point level, which indicates contraction in the sector. It was Malaysia's lowest PMI since July and Thailand's lowest in two years. In an AFP interview last week, Malaysian Prime Minister Mahathir Mohamad complained that US President Donald Trump -- who has accused various trading partners of "ripping off" America -- "seems to be withdrawing from all commitments overseas". Mahathir, 93, said that hurts everyone, including the US. "We want to remain friendly with the US, and we want to continue trading with the US," Mahathir said. "But the trade war that is going on between the US and China is damaging for us. We have to pay a price for that." Vietnam or bust The International Monetary Fund warned at its annual meeting last month that the trade friction and other threats would hobble the world economy, lowering its growth forecasts for 2018 and 2019. The Eurozone posted disappointing PMI figures in October, though due largely to factors other than trade tension. But not everyone feels the shock yet, with Japan's manufacturing looking solid last month. Trump, meanwhile, faces little pressure to tame his trade rhetoric at home, with a rosy US outlook marked by rising wages and low unemployment. And even in Asia, there will be some winners as conflict re-aligns trading patterns, economists noted. Vietnam, in particular, looks to gain as foreign manufacturers relocate out of China to escape the trade war crossfire and what many say is an increasingly unfair playing field for foreign companies in China. Vietnam PMI climbed from a ten-month low of 51.5 in September to 53.9 last month. "The hard data on exports and industrial production in recent months haven't been that great. The latest survey nonetheless shows how Vietnam is weathering the US-China trade war better than its ASEAN peers," Miguel Chanco, senior economist at Pantheon Macroeconomics, told AFP. "If the trade war escalates, Vietnam will be one of the prime destinations for export-oriented firms looking to move out of China."

Trump's trade war begins to bite — in Asia

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