China is not seeking to replace or to confront the United States as the world's top technological power,&nbsp;a foreign ministry spokesperson said Friday.

Responding to a litany of recent accusations from the Trump administration, Hua Chunying said China will fight back against "malicious slander" and attacks from Washington.

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''China's long-term economic growth fundamentals have remained unchanged after withstanding the impact of the novel coronavirus outbreak, despite what critics say is an increasingly aggressive foreign policy that looks to expand Chinese influence in the military, technology, economic and other spheres,'' Chunying said Friday at a regular press briefing.

"As an independent sovereign state, China has the right to safeguard its own sovereignty, security and development interests, to defend the achievements made by the Chinese people with hard work, to refuse any bullying and injustice against China, and to fight back against malicious slander and attacks by the US&nbsp;against China," Hua added.

Also read:&nbsp;<a href="https://www.wionews.com/world/us-attorney-general-blasts-american-firms-for-kowtowing-to-beijing-313919">US attorney general blasts American firms for 'kowtowing' to Beijing</a>

Her comments came in response to a speech Thursday by US Attorney General William Barr blasted American firms with Chinese links for 'kowtowing' to Beijing.

Barr took aim at Hollywood companies, including Walt Disney Co on Thursday as well as large technology firms like Apple, Alphabet's Google and Microsoft Corp over company actions with China.

"Corporations such as Google, Microsoft, Yahoo, and Apple have shown themselves all too willing to collaborate with the (Chinese Communist party)," Barr said.

He added that Hollywood has routinely caved into pressure and censored their films "to appease the Chinese Communist Party."

"I suspect Walt Disney would be disheartened to see how the company he founded deals with the foreign dictatorships of our day," Barr said in a speech at the Gerald R. Ford Presidential Museum in Michigan.

Barr chided US companies for being too willing to take steps to ensure access to the large Chinese market.

In recent months, US-China ties have dipped to their lowest ebb in decades, strained over issues ranging from the global coronavirus pandemic and China's massive trade surpluses, to Beijing’s suppression of pro-democracy protests in Hong Kong, its military buildup in the South China Sea and treatment of minority Muslims.

China is not seeking to replace or to confront the United States as the world's top technological power, a foreign ministry spokesperson said Friday. Responding to a litany of recent accusations from the Trump administration, Hua Chunying said China will fight back against "malicious slander" and attacks from Washington.

China is not seeking to replace or to confront the United States as the world's top technological power, a foreign ministry spokesperson said Friday. Responding to a litany of recent accusations from the Trump administration, Hua Chunying said China will fight back against "malicious slander" and attacks from Washington. ''China's long-term economic growth fundamentals have remained unchanged after withstanding the impact of the novel coronavirus outbreak, despite what critics say is an increasingly aggressive foreign policy that looks to expand Chinese influence in the military, technology, economic and other spheres,'' Chunying said Friday at a regular press briefing. "As an independent sovereign state, China has the right to safeguard its own sovereignty, security and development interests, to defend the achievements made by the Chinese people with hard work, to refuse any bullying and injustice against China, and to fight back against malicious slander and attacks by the US against China," Hua added. Also read: US attorney general blasts American firms for 'kowtowing' to Beijing Her comments came in response to a speech Thursday by US Attorney General William Barr blasted American firms with Chinese links for 'kowtowing' to Beijing. Barr took aim at Hollywood companies, including Walt Disney Co on Thursday as well as large technology firms like Apple, Alphabet's Google and Microsoft Corp over company actions with China. "Corporations such as Google, Microsoft, Yahoo, and Apple have shown themselves all too willing to collaborate with the (Chinese Communist party)," Barr said. He added that Hollywood has routinely caved into pressure and censored their films "to appease the Chinese Communist Party." "I suspect Walt Disney would be disheartened to see how the company he founded deals with the foreign dictatorships of our day," Barr said in a speech at the Gerald R. Ford Presidential Museum in Michigan. Barr chided US companies for being too willing to take steps to ensure access to the large Chinese market. In recent months, US-China ties have dipped to their lowest ebb in decades, strained over issues ranging from the global coronavirus pandemic and China's massive trade surpluses, to Beijing’s suppression of pro-democracy protests in Hong Kong, its military buildup in the South China Sea and treatment of minority Muslims.

Not trying to replace US as world's top technological power, says China

US President Donald Trump's economic adviser Larry Kudlow has said that TikTok may cut off ties to its Chinese parent and become a 100 per cent American company to circumvent demands to ban it as India has done. 
 
"I think TikTok is going to pull out of the holding company which is China-run and operate as an independent American company," he told reporters at the White House on Thursday.

Also read:&nbsp;<a href="https://www.wionews.com/world/us-attorney-general-blasts-american-firms-for-kowtowing-to-beijing-313919">US attorney general blasts American firms for 'kowtowing' to Beijing</a>

The US has not made a final decision on whether to ban it, which has been suggested by Secretary of State Mike Pompeo, he said. 
 
TikTok being divested by ByteDance Technology Company "is a much better solution than banning or pushing away", said Kudlow, who is the Director of the National Economic Council.

Also read|&nbsp;<a href="https://www.wionews.com/world/trump-administration-action-on-risks-posed-by-tiktok-likely-in-weeks-white-house-313604">Trump administration action on risks posed by TikTok likely 'in weeks': White House</a>

He said that its services will be located in the US and "it will become an hundred per cent American company". 
 
If it becomes a US company without Chinese links, India may have to reconsider the ban on the short video app wildly popular in the country. 
 
India banned TikTok along with 58 other Chinese apps on June 29 citing threats to its defence and national security. 
 
The ban came after a deadly clash between Indian and Chinese troops along the Line of Actual Control in Ladakh. 
 
Under Beijing's National Security Law, all Chinese companies have to provide intelligence requested by the government, creating risks for users and their countries. 
 
India was TikTok's biggest market outside of China, where it operates as Douyin. There were about 200 million users in India and over 300 million downloads. The United States comes next with over 30 million users for the app.

US President Donald Trump's economic adviser Larry Kudlow has said that TikTok may cut off ties to its Chinese parent and become a 100 per cent American company to circumvent demands to ban it as India has done.

US President Donald Trump's economic adviser Larry Kudlow has said that TikTok may cut off ties to its Chinese parent and become a 100 per cent American company to circumvent demands to ban it as India has done. "I think TikTok is going to pull out of the holding company which is China-run and operate as an independent American company," he told reporters at the White House on Thursday. Also read: US attorney general blasts American firms for 'kowtowing' to Beijing The US has not made a final decision on whether to ban it, which has been suggested by Secretary of State Mike Pompeo, he said. TikTok being divested by ByteDance Technology Company "is a much better solution than banning or pushing away", said Kudlow, who is the Director of the National Economic Council. Also read| Trump administration action on risks posed by TikTok likely 'in weeks': White House He said that its services will be located in the US and "it will become an hundred per cent American company". If it becomes a US company without Chinese links, India may have to reconsider the ban on the short video app wildly popular in the country. India banned TikTok along with 58 other Chinese apps on June 29 citing threats to its defence and national security. The ban came after a deadly clash between Indian and Chinese troops along the Line of Actual Control in Ladakh. Under Beijing's National Security Law, all Chinese companies have to provide intelligence requested by the government, creating risks for users and their countries. India was TikTok's biggest market outside of China, where it operates as Douyin. There were about 200 million users in India and over 300 million downloads. The United States comes next with over 30 million users for the app.

TikTok may leave Chinese parent company to avoid US ban: Trump adviser

Beijing hit back Tuesday at the US branding of Chinese pursuits in the South China Sea as illegal, saying the accusation was "unjustified' and a bid to sabotage regional peace.

"We advise the US side to earnestly honor its commitment of not taking sides on the issue of territorial sovereignty, respect regional countries’ efforts for a peaceful and stable South China Sea and stop its attempts to disrupt and sabotage regional peace and stability," the Chinese embassy in Washington said in a statement.

Also read:&nbsp;<a href="https://www.wionews.com/world/us-navy-warship-again-challenges-beijings-south-china-sea-claims-301746">US Navy warship again challenges Beijing's South China Sea claims</a>

Earlier,&nbsp;US&nbsp;Secretary of State Mike Pompeo said in a statement that ''China has offered no coherent legal basis for its ambitions in the South China Sea and for years has been using intimidation against other Southeast Asian coastal states.''

"We are making clear: Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them," said Pompeo, a prominent China hawk within the Trump administration.

Also read| <a href="https://www.wionews.com/world/china-military-exercises-in-south-china-sea-will-further-destabilise-the-situation-pentagon-310335">China military exercises in South China Sea will 'further destabilise' the situation: Pentagon</a>

The US&nbsp;has long opposed China's expansive territorial claims on the South China Sea, sending warships regularly through the strategic waterway to demonstrate freedom of navigation there. Monday's comments reflect a harsher tone.

"The world will not allow Beijing to treat the South China Sea as its maritime empire," Pompeo said.

The relationship between the United States and China has grown increasingly tense over the past six months over Beijing's handling of the coronavirus pandemic, its tightened grip on Hong Kong and its crackdown on China's Uighur Muslim community.

China claims 90% of the potentially energy-rich South China Sea, but Brunei, Malaysia, the Philippines, Taiwan and Vietnam also lay claim to parts of it, through which about $3 trillion of trade passes each year. Beijing has built bases atop atolls in the region but says its intentions are peaceful.

Beijing routinely outlines the scope of its claims with reference to the so-called nine-dashed line that encompasses about nine-tenths of the 3.5-million-square-kilometer South China Sea on Chinese maps.

"This is basically the first time we have called it illegitimate," said Chris Johnson, an analyst with the Center for Strategic and International Studies. "It's "fine to put out a statement, but what you going to do about it?"

Beijing hit back Tuesday at the US branding of Chinese pursuits in the South China Sea as illegal, saying the accusation was "unjustified' and a bid to sabotage regional peace.

Beijing hit back Tuesday at the US branding of Chinese pursuits in the South China Sea as illegal, saying the accusation was "unjustified' and a bid to sabotage regional peace. "We advise the US side to earnestly honor its commitment of not taking sides on the issue of territorial sovereignty, respect regional countries’ efforts for a peaceful and stable South China Sea and stop its attempts to disrupt and sabotage regional peace and stability," the Chinese embassy in Washington said in a statement. Also read: US Navy warship again challenges Beijing's South China Sea claims Earlier, US Secretary of State Mike Pompeo said in a statement that ''China has offered no coherent legal basis for its ambitions in the South China Sea and for years has been using intimidation against other Southeast Asian coastal states.'' "We are making clear: Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them," said Pompeo, a prominent China hawk within the Trump administration. Also read| China military exercises in South China Sea will 'further destabilise' the situation: Pentagon The US has long opposed China's expansive territorial claims on the South China Sea, sending warships regularly through the strategic waterway to demonstrate freedom of navigation there. Monday's comments reflect a harsher tone. "The world will not allow Beijing to treat the South China Sea as its maritime empire," Pompeo said. The relationship between the United States and China has grown increasingly tense over the past six months over Beijing's handling of the coronavirus pandemic, its tightened grip on Hong Kong and its crackdown on China's Uighur Muslim community. China claims 90% of the potentially energy-rich South China Sea, but Brunei, Malaysia, the Philippines, Taiwan and Vietnam also lay claim to parts of it, through which about $3 trillion of trade passes each year. Beijing has built bases atop atolls in the region but says its intentions are peaceful. Beijing routinely outlines the scope of its claims with reference to the so-called nine-dashed line that encompasses about nine-tenths of the 3.5-million-square-kilometer South China Sea on Chinese maps. "This is basically the first time we have called it illegitimate," said Chris Johnson, an analyst with the Center for Strategic and International Studies. "It's "fine to put out a statement, but what you going to do about it?"

China says Pompeo's South China Sea illegal claim 'unjustified'

Eye on Taiwan: Now, China puts stealth fighter jet J-20B in mass production

China is willing to resume talks at all levels in all fields as long as the United States is ready, said Chinese State Counsellor&nbsp;and foreign minister&nbsp;Wang&nbsp;Yi&nbsp;when he addressed the China-US&nbsp;Think Tanks and Media Online Forum via videolink on Thursday.

In his address, he talked about problems with the current US strategy towards China, questioning its basis and accusing the U.S. of making up "China Threats".

Also read:&nbsp;<a href="https://www.wionews.com/world/us-china-war-of-words-escalates-over-covid-19-origin-296648">US-China war of words escalates over COVID-19 origin</a>

Wang said "the current China policy of the US&nbsp;is based on ill-informed strategic miscalculation, and is fraught with emotions and whims and McCarthyist bigotry. Its suspicion about China, which is totally uncalled-for, has reached a point of paranoia.''

''It seems as if every Chinese investment is politically driven, every Chinese student is a spy, and every cooperation initiative is a scheme with a hidden agenda. If the US&nbsp;lacks confidence, openness and inclusiveness to such an extent, and chooses to conjure up 'China Threats' of various kinds, its paranoia may turn into self-fulfilling prophecies at the end of the day," he added.

Also read:&nbsp;<a href="https://www.wionews.com/world/chinese-foreign-minister-says-us-china-nearing-brink-of-new-cold-war-300709">Chinese foreign minister says US, China nearing 'brink of new Cold War'</a>

Wang&nbsp;stressed that communication channels are still open and China would like to resume all dialogue mechanisms with the United States.&nbsp;He also made&nbsp;three proposals on bringing China-US&nbsp;relations back on track.

"First, to activate and open all the channels of dialogue," said&nbsp;Wang. He said only communication can dispel falsehoods and only dialogue can prevent miscalculation, reaffirming that China's door to dialogue remains open.

As long as the US&nbsp;is ready, China can resume and restart the dialogue mechanisms at all levels and in all areas, he said.

All issues can be put on the table, and all differences can be addressed properly through dialogue, said&nbsp;Wang.

"Second, to review and agree on the lists of interactions and third is&nbsp;to focus and cooperate on COVID-19 response," he added.

The foreign minister said that, given the inter-connectedness and complicated issues, it is useful for the two sides to sit down, run over them, and draw up the following three lists, that is, a list of cooperation areas, a list of dialogues and a list of issues that need proper management. He said that in the face of the virus, cooperation should be the first-order priority.

China is ready to share with the United States information about COVID-19 prevention and containment as well as its response experience, he said, adding that China is ready to have closer exchanges with the United States on diagnostics and therapeutics, vaccines and economic recovery.

The United States should immediately stop its acts of politicization and stigmatization and work with China to promote a global response to save more lives and take up the international responsibilities as two major powers in the world.

Washington and Beijing have been at loggerheads over the handling of the coronavirus outbreak, China's actions in the former British colony of Hong Kong, a long-running trade dispute, and frictions over Taiwan and the South China Sea.

On Wednesday, US&nbsp;Secretary of State Mike Pompeo said the world should not permit China's "bullying" to take place, highlighting the country's territorial disputes with India, Vietnam, and Japan.

The forum was held to build mutual respect, trust and cooperation between China and the US&nbsp;with more than 30 top diplomats and experts from across the world participating in it online.

China is willing to resume talks at all levels in all fields as long as the United States is ready, said Chinese State Counsellor and foreign minister Wang Yi when he addressed the China-US Think Tanks and Media Online Forum via videolink on Thursday.

China is willing to resume talks at all levels in all fields as long as the United States is ready, said Chinese State Counsellor and foreign minister Wang Yi when he addressed the China-US Think Tanks and Media Online Forum via videolink on Thursday. In his address, he talked about problems with the current US strategy towards China, questioning its basis and accusing the U.S. of making up "China Threats". Also read: US-China war of words escalates over COVID-19 origin Wang said "the current China policy of the US is based on ill-informed strategic miscalculation, and is fraught with emotions and whims and McCarthyist bigotry. Its suspicion about China, which is totally uncalled-for, has reached a point of paranoia.'' ''It seems as if every Chinese investment is politically driven, every Chinese student is a spy, and every cooperation initiative is a scheme with a hidden agenda. If the US lacks confidence, openness and inclusiveness to such an extent, and chooses to conjure up 'China Threats' of various kinds, its paranoia may turn into self-fulfilling prophecies at the end of the day," he added. Also read: Chinese foreign minister says US, China nearing 'brink of new Cold War' Wang stressed that communication channels are still open and China would like to resume all dialogue mechanisms with the United States. He also made three proposals on bringing China-US relations back on track. "First, to activate and open all the channels of dialogue," said Wang. He said only communication can dispel falsehoods and only dialogue can prevent miscalculation, reaffirming that China's door to dialogue remains open. As long as the US is ready, China can resume and restart the dialogue mechanisms at all levels and in all areas, he said. All issues can be put on the table, and all differences can be addressed properly through dialogue, said Wang. "Second, to review and agree on the lists of interactions and third is to focus and cooperate on COVID-19 response," he added. The foreign minister said that, given the inter-connectedness and complicated issues, it is useful for the two sides to sit down, run over them, and draw up the following three lists, that is, a list of cooperation areas, a list of dialogues and a list of issues that need proper management. He said that in the face of the virus, cooperation should be the first-order priority. China is ready to share with the United States information about COVID-19 prevention and containment as well as its response experience, he said, adding that China is ready to have closer exchanges with the United States on diagnostics and therapeutics, vaccines and economic recovery. The United States should immediately stop its acts of politicization and stigmatization and work with China to promote a global response to save more lives and take up the international responsibilities as two major powers in the world. Washington and Beijing have been at loggerheads over the handling of the coronavirus outbreak, China's actions in the former British colony of Hong Kong, a long-running trade dispute, and frictions over Taiwan and the South China Sea. On Wednesday, US Secretary of State Mike Pompeo said the world should not permit China's "bullying" to take place, highlighting the country's territorial disputes with India, Vietnam, and Japan. The forum was held to build mutual respect, trust and cooperation between China and the US with more than 30 top diplomats and experts from across the world participating in it online.

Ready to share COVID-19 experience with US: Chinese foreign minister Wang Yi

The Federal Bureau of Investigation (FBI) Director Christopher Wray on Tuesday said that China is taking advantage of America's open system while preserving its own closed system.

<a href="https://www.wionews.com/world/heres-how-chinas-spy-racket-is-bigger-than-the-cold-war-308878">Also read: Here's how China's spy racket is bigger than the cold war!</a> 
 
During remarks at an event hosted by the Hudson Institute, FBI Director Chris Wray said China's leaders believe they are in a "generational fight" to make China the "world's only superpower by any means necessary."

"Greatest long-term threat to our nation’s information and intellectual property, and to our economic vitality, is the counterintelligence and economic espionage threat from China. It’s a threat to our economic security—and by extension, to our national security." Chris Wray said.&nbsp;

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/chinese-professor-convicted-for-economic-espionage-in-the-us-309106/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

He added that Beijing uses a diverse set of methods to achieve its goals, including economic espionage, intelligence gathering, pushing for censorship at universities, and "malign foreign influence," referring to covert and coercive attempts to make powerful people advocate for China's interests in the US.

"All these seemingly inconsequential pressures add up to a policymaking environment in which Americans find themselves held over a barrel by the Chinese Communist Party," Wray said.

Talking about economic espionage he said that it’s the people of the United States who are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history. If you are an American adult, it is more likely than not that China has stolen your personal data. 
 
(With inputs from agencies)

The Federal Bureau of Investigation (FBI) Director Christopher Wray on Tuesday said that China is taking advantage of America's open system while preserving its own closed system.

The Federal Bureau of Investigation (FBI) Director Christopher Wray on Tuesday said that China is taking advantage of America's open system while preserving its own closed system. Also read: Here's how China's spy racket is bigger than the cold war! During remarks at an event hosted by the Hudson Institute, FBI Director Chris Wray said China's leaders believe they are in a "generational fight" to make China the "world's only superpower by any means necessary." "Greatest long-term threat to our nation’s information and intellectual property, and to our economic vitality, is the counterintelligence and economic espionage threat from China. It’s a threat to our economic security—and by extension, to our national security." Chris Wray said. He added that Beijing uses a diverse set of methods to achieve its goals, including economic espionage, intelligence gathering, pushing for censorship at universities, and "malign foreign influence," referring to covert and coercive attempts to make powerful people advocate for China's interests in the US. "All these seemingly inconsequential pressures add up to a policymaking environment in which Americans find themselves held over a barrel by the Chinese Communist Party," Wray said. Talking about economic espionage he said that it’s the people of the United States who are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history. If you are an American adult, it is more likely than not that China has stolen your personal data. (With inputs from agencies)

China aims to become world's 'only superpower', says FBI director

From trade war to media war, the US and China are fighting on many fronts and the latest flashpoint is media.

China's use of state media to push propaganda is unmatched and the US government wants none of it on American soil.

According to the US, Beijing has full editorial control over the content, and hence, they will be treated as embassies. As part of this move, the companies will have to report details of their staff, and also reveal the properties they hold in the US. Currently, at least nine Chinese outlets are under scrutiny.

China has retaliated, imposing similar sanctions on US media outlets in China including the Associated Press, the National Public Radio, CBS News, and the United Press International News Agency. 
 
<a href="https://www.wionews.com/india-news/china-blocks-access-to-wion-website-after-india-bans-59-chinese-apps-310271">Also Read: China blocks access to WION website after India bans 59 Chinese apps</a>

China runs a worldwide propaganda machine to control the narrative. Beijing conducts a media outreach campaign in almost every continent, under which journalists are called to China on fully-sponsored trips.&nbsp;

Furthermore, Chinese state media content, such as Xinhua and CGTN offer stories and videos for free. They also run paid content in foreign outlets. 
 
<a href="https://www.wionews.com/world/chinas-global-media-spending-suggests-us-concerns-about-a-media-war-are-not-unfounded-310006">Also Read: China's global media spending suggests US concerns about a 'media war' are not unfounded</a> 
&nbsp; 
In an effort to control the content, China is buying legacy companies or setting up digital joint ventures overseas. Chinese media presence is higher in the Asia-Pacific region and Africa, compared to Latin America and Europe. China's Star Times in Africa has become a dominating satellite television player.

In Hong Kong, the South China Morning Post is owned by the Alibaba group.

China's reputation has taken a beating during the pandemic and its dependent on its media agencies now more than ever. The dragon needs the propaganda machinery to clear the blot on its name.

 
&nbsp;

From trade war to media war, the US and China are fighting on many fronts and the latest flashpoint is media. China's use of state media to push propaganda is unmatched and the US government wants none of it on American soil.

From trade war to media war, the US and China are fighting on many fronts and the latest flashpoint is media. China's use of state media to push propaganda is unmatched and the US government wants none of it on American soil. According to the US, Beijing has full editorial control over the content, and hence, they will be treated as embassies. As part of this move, the companies will have to report details of their staff, and also reveal the properties they hold in the US. Currently, at least nine Chinese outlets are under scrutiny. China has retaliated, imposing similar sanctions on US media outlets in China including the Associated Press, the National Public Radio, CBS News, and the United Press International News Agency. Also Read: China blocks access to WION website after India bans 59 Chinese apps China runs a worldwide propaganda machine to control the narrative. Beijing conducts a media outreach campaign in almost every continent, under which journalists are called to China on fully-sponsored trips. Furthermore, Chinese state media content, such as Xinhua and CGTN offer stories and videos for free. They also run paid content in foreign outlets. Also Read: China's global media spending suggests US concerns about a 'media war' are not unfounded In an effort to control the content, China is buying legacy companies or setting up digital joint ventures overseas. Chinese media presence is higher in the Asia-Pacific region and Africa, compared to Latin America and Europe. China's Star Times in Africa has become a dominating satellite television player. In Hong Kong, the South China Morning Post is owned by the Alibaba group. China's reputation has taken a beating during the pandemic and its dependent on its media agencies now more than ever. The dragon needs the propaganda machinery to clear the blot on its name.

Here's how China controls the media narrative in foreign countries

By Amitrajeet A Batabyal&nbsp;

Trade tensions and mistrust are escalating between the US and China. Soon after US Secretary of State Mike Pompeo announced that China recommitted to its January trade deal obligations after a face-to-face meeting with Beijing’s top diplomat on June 17, he upbraided the country for using disinformation to drive a wedge between Europe and the US President Trump, meanwhile, is attempting to use his tough stance with Beijing as a foreign policy selling point.

Behind the headlines and politics, a basic question remains: How much benefit is the US getting out of its trade relationship with China? As a scholar in international trade theory and policy, I believe that answer must be looked at through a wider lens than just economics – one that includes national security.

A model where both countries benefit

Economists have long agreed that free international trade can benefit countries when it is based on the principle of comparative advantage. Popularised by the English economist David Ricardo, this means that countries should export goods they can make more efficiently and less expensively to other countries, and import goods the other country can make more efficiently.

Free trade theory states that such trade, as opposed to trade that uses tariffs and quotas, makes nations better off. That’s because it creates overall benefits for countries. There may still be individual losers in certain industries, but overall, all nations are deemed winners.

It is, in theory, possible to take some of the winners’ gains in a nation and give it to that country’s losers, and still have some surplus left over. The “losers” are typically the industries that compete with imports and its workers.

The practical problem with this line of reasoning is that the US typically either does not make compensatory payments to the losers from the trade or, when it does, the payments are puny. Uncle Sam provides assistance to those who lose out from free trade via the Department of Labor’s Trade Adjustment Assistance program.

As long as workers displaced by international trade enrol in a job training programme, the adjustment assistance provides relocation assistance, subsidised health insurance and extended unemployment benefits. However, the program has been severely criticized by workers themselves, even earning the nickname “burial insurance,” as in arriving just in time to bury the victims.

Credible statistics are hard to come by to show the true monetary gains from trade. However, the economists Arnaud Costinot and Andres Rodriguez-Clare have shed valuable light on this question. Their research shows that the share of spending on imports in the US is smaller than other countries. That is in large part because the US is a large country, and most trade occurs within the nation.

Costinot and Rodriguez-Clare point out that about 8 cents out of every dollar spent in the US is spent on imports.

We can now ask: How much would it cost US consumers if the country stopped trade with other nations? The answer to this question is known as the welfare cost of zero trade or, equivalently, the welfare gains from trade.

Because the US doesn’t trade that much, the welfare gains from international trade in the US are smaller than in many other countries. Costinot and Rodriguez-Clare estimate these gains from all trade for the US range from 2 per cent to 8 per cent of gross domestic product.

For a large and diversified nation such as the US, this is relatively small. The reason is that the share of all US spending that goes to imports is around 6 per cent-8 per cent. Put differently, the US&nbsp;is a lot less reliant on imports than many other more trade-reliant countries. To compare, Belgium – a much smaller but more trade-reliant nation – spends 30 per cent&nbsp;&nbsp;on imports.

If the US were to move to economic self-sufficiency by stopping all trade with other nations, then it would be worse off, but based on the previous research, not dramatically so.

While that may not be practical overall, it is worth looking at it through the lens of US-China trade specifically.

What COVID-19 shows us 
 
To manage the outbreak of the coronavirus, the Chinese government closed large numbers of factories and ports. Entire cities and even provinces were locked down. These stringent measures have caused significant disruptions to US firms with China-only supply chains. Even more significant is the extent to which the US&nbsp;is dependent on China for vital goods such as medicines.

More generally, in 2018, China supplied about 42 per cent&nbsp;of the world’s exports of personal protective equipment. Almost 75 per cent&nbsp;of Italy’s imported blood thinners came from China, and so did 60% of the ingredients for antibiotics imported by Japan.

This dependence poses a national security threat. For example, if relations with China were to deteriorate further, then China could hold back shipping on, for instance, vital pharmaceutical ingredients. China has been known to abuse its market power.

Most standard economic analyses about the gains and losses from trade typically do not take national security issues into account. However, some research exists on how to intervene in an economy to attain “noneconomic objectives.” The fact that trade can be weaponized was alluded to by the economist Adam Smith, who observed in 1776 that national security can trump free trade concerns.

This is because if certain goods are necessary for national security, then free trade in these goods may reduce a nation’s capacity to produce the goods, thereby making them scarce should a national emergency arise.

Given the increasing tensions and complexities around trade with China, I believe it may be time to selectively retreat from trading with the Chinese over supplies critical to national security. Such a retreat will have to involve, among other controls, setting procurement rules so that health care providers buy US products, reducing and ideally eliminating the dependence on China-only supply chains, and monitoring cross-border mergers and acquisitions. In other words, we would still have globalisation, but with diminished Chinese influence.

This will be difficult to implement on a practical level given the close relationships the US&nbsp;markets have with China – and the roughly $539.5 billion in goods it imports each year. But short-term pain from the transition may well result in long-term gain from protecting national security.

(Amitrajeet A Batabyal is Arthur J Gosnell Professor of Economics, Rochester Institute of Technology)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

(This article was originally published on The Conversation. <a href="https://theconversation.com/a-selective-retreat-from-trade-with-china-makes-sense-for-the-united-states-141110">Read the original article</a>) &nbsp;

By Amitrajeet A Batabyal Trade tensions and mistrust are escalating between the US and China. Soon after US Secretary of State Mike Pompeo announced that China recommitted to its January trade deal obligations after a face-to-face meeting with Beijing’s top diplomat on June 17, he upbraided the country for using disinformation to drive a wedge between Europe and the US President Trump, meanwhile, is attempting to use his tough stance with Beijing as a foreign policy selling point.

By Amitrajeet A Batabyal Trade tensions and mistrust are escalating between the US and China. Soon after US Secretary of State Mike Pompeo announced that China recommitted to its January trade deal obligations after a face-to-face meeting with Beijing’s top diplomat on June 17, he upbraided the country for using disinformation to drive a wedge between Europe and the US President Trump, meanwhile, is attempting to use his tough stance with Beijing as a foreign policy selling point. Behind the headlines and politics, a basic question remains: How much benefit is the US getting out of its trade relationship with China? As a scholar in international trade theory and policy, I believe that answer must be looked at through a wider lens than just economics – one that includes national security. A model where both countries benefit Economists have long agreed that free international trade can benefit countries when it is based on the principle of comparative advantage. Popularised by the English economist David Ricardo, this means that countries should export goods they can make more efficiently and less expensively to other countries, and import goods the other country can make more efficiently. Free trade theory states that such trade, as opposed to trade that uses tariffs and quotas, makes nations better off. That’s because it creates overall benefits for countries. There may still be individual losers in certain industries, but overall, all nations are deemed winners. It is, in theory, possible to take some of the winners’ gains in a nation and give it to that country’s losers, and still have some surplus left over. The “losers” are typically the industries that compete with imports and its workers. The practical problem with this line of reasoning is that the US typically either does not make compensatory payments to the losers from the trade or, when it does, the payments are puny. Uncle Sam provides assistance to those who lose out from free trade via the Department of Labor’s Trade Adjustment Assistance program. As long as workers displaced by international trade enrol in a job training programme, the adjustment assistance provides relocation assistance, subsidised health insurance and extended unemployment benefits. However, the program has been severely criticized by workers themselves, even earning the nickname “burial insurance,” as in arriving just in time to bury the victims. Credible statistics are hard to come by to show the true monetary gains from trade. However, the economists Arnaud Costinot and Andres Rodriguez-Clare have shed valuable light on this question. Their research shows that the share of spending on imports in the US is smaller than other countries. That is in large part because the US is a large country, and most trade occurs within the nation. Costinot and Rodriguez-Clare point out that about 8 cents out of every dollar spent in the US is spent on imports. We can now ask: How much would it cost US consumers if the country stopped trade with other nations? The answer to this question is known as the welfare cost of zero trade or, equivalently, the welfare gains from trade. Because the US doesn’t trade that much, the welfare gains from international trade in the US are smaller than in many other countries. Costinot and Rodriguez-Clare estimate these gains from all trade for the US range from 2 per cent to 8 per cent of gross domestic product. For a large and diversified nation such as the US, this is relatively small. The reason is that the share of all US spending that goes to imports is around 6 per cent-8 per cent. Put differently, the US is a lot less reliant on imports than many other more trade-reliant countries. To compare, Belgium – a much smaller but more trade-reliant nation – spends 30 per cent on imports. If the US were to move to economic self-sufficiency by stopping all trade with other nations, then it would be worse off, but based on the previous research, not dramatically so. While that may not be practical overall, it is worth looking at it through the lens of US-China trade specifically. What COVID-19 shows us To manage the outbreak of the coronavirus, the Chinese government closed large numbers of factories and ports. Entire cities and even provinces were locked down. These stringent measures have caused significant disruptions to US firms with China-only supply chains. Even more significant is the extent to which the US is dependent on China for vital goods such as medicines. More generally, in 2018, China supplied about 42 per cent of the world’s exports of personal protective equipment. Almost 75 per cent of Italy’s imported blood thinners came from China, and so did 60% of the ingredients for antibiotics imported by Japan. This dependence poses a national security threat. For example, if relations with China were to deteriorate further, then China could hold back shipping on, for instance, vital pharmaceutical ingredients. China has been known to abuse its market power. Most standard economic analyses about the gains and losses from trade typically do not take national security issues into account. However, some research exists on how to intervene in an economy to attain “noneconomic objectives.” The fact that trade can be weaponized was alluded to by the economist Adam Smith, who observed in 1776 that national security can trump free trade concerns. This is because if certain goods are necessary for national security, then free trade in these goods may reduce a nation’s capacity to produce the goods, thereby making them scarce should a national emergency arise. Given the increasing tensions and complexities around trade with China, I believe it may be time to selectively retreat from trading with the Chinese over supplies critical to national security. Such a retreat will have to involve, among other controls, setting procurement rules so that health care providers buy US products, reducing and ideally eliminating the dependence on China-only supply chains, and monitoring cross-border mergers and acquisitions. In other words, we would still have globalisation, but with diminished Chinese influence. This will be difficult to implement on a practical level given the close relationships the US markets have with China – and the roughly $539.5 billion in goods it imports each year. But short-term pain from the transition may well result in long-term gain from protecting national security. (Amitrajeet A Batabyal is Arthur J Gosnell Professor of Economics, Rochester Institute of Technology) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) (This article was originally published on The Conversation. Read the original article)

A selective retreat from trade with China makes sense for the United States

While much of the focus in recent weeks has been on Israel’s relations with China, the real litmus test of the United States’ ability to counter the People’s Republic’s growing footprint in the Middle East is likely to be in the Gulf.

In talks last month with US Secretary of State Mike Pompeo, Israeli leaders made clear that while wanting to maintain close relations with China they would not risk jeopardising their long-standing ties to the United States, their closest ally and supporter of their controversial annexationist policies.

Within days of Pompeo’s visit, Israel awarded a tender for the world’s largest desalination to an Israeli company rather than a competing Chinese firm.

Similarly, Israeli officials say that Israel is unlikely to buy Chinese telecommunication giant Huawei’s 5G offering because of security considerations of its own. The US has been campaigning against the integration of Huawei components into networks of its allies.

The real Israeli test may come next year when China takes over the management of Haifa port that is often frequented by ships of the US Sixth Fleet. US officials have suggested that Chinese control of the port could impact the US Navy’s willingness to use Haifa’s facilities.

In contrast to Israel, the US is likely to find the going tougher in persuading Gulf states to limit their engagement with China, including with Huawei, which already has significant operations in the region.

Like Israel, United Arab Emirates officials have sought to convey to the US that they see relations with the United States as indispensable even though that has yet to be put to a test when it comes to China.

“The United States is our single most important strategic partnership. Sometimes people, when they think of our relationship with the US, they just look at the political/military angle. But this relationship is really much, much wider,” said UAE Minister of State for Foreign Affairs Anwar Gargash. &nbsp;Such a relationship, he added, is to be found in “IT, in business, investment, in soft power, in the presence of institutions such as NYU Abu Dhabi, in people like me who spent some of the best years of their lives in America.”

Gargash was speaking after Pompeo’s visit to Israel and after a senior official issued a direct warning to Gulf states.

“These states have to weigh the value of their partnership with the United States. We want our partner nations to do due diligence,” said US Assistant Secretary of State for Near Eastern Affairs David Schenker.

Describing Chinese aid as “predatory,” Schenker warned that Huawei’s participation in 5G infrastructure in the Gulf would make it difficult for American and Gulf forces to communicate. Huawei has signed agreements with the UAE, Saudi Arabia, and Bahrain.

“Huawei’s participation in 5G infrastructure in the Gulf would make it difficult for American and Gulf forces to communicate.”

“We’re not forcing countries to choose between the United States and the PRC,” Schenker said, referring to the People’s Republic of China. “Countries can and should maintain healthy relationships with both, but we want to highlight the costs” that come with certain engagements with China.

Earlier, an unidentified senior US official warned that Gulf states “risk rupturing the long-term strategic relationship they have with the US.”

The US Navy’s Fifth Fleet operates out of Bahrain while Qatar hosts the forward headquarters of the US military’s Central Command (CENTCOM).

In a message to Israel that was also intended for the Gulf, US Ambassador to Israel David Friedman laid out US concerns.

“For two countries as close to each other as Israel and the US, when they cooperate and exchange intelligence and other secrets for their mutual protection on such a robust level, both countries need to be really careful about exposing that level of cooperation to a foreign power that may have a different agenda,” he said.

Friedman asserted that China uses investments and infrastructure projects to “infiltrate” countries. “These [Chinese] companies have the ability to flick various switches and gain access to the most sensitive communications.”

US Ambassador David Friedman asserted that China uses investments and infrastructure projects to “infiltrate” countries.

The US Embassy in Abu Dhabi, in a shot across the Gulf’s bow, last month rejected a UAE offer to donate hundreds of coronavirus tests for screening of its staff.

The snub was designed to put a dent in China’s health silk road diplomacy centered on its experience with the pandemic and ability to manufacture personal protective and medical equipment.

A US official said the tests were rejected because they were either Chinese-made or involved BGI, a Chinese genomics company active in the Gulf, which raised concerns about patient privacy.

The US softened the blow when the prestigious Ohio-based Cleveland Clinic sent 40 nurses and doctor to its Abu Dhabi subsidiary. The Abu Dhabi facility was tasked with treating the UAE’s most severe cases of coronavirus.

The seemingly escalating US effort to box in China is hampered by the fact that no US company produces a 5G alternative. “5G is the future. To reconsider Huawei, the US has to offer an alternative. So far, it hasn’t done so,” a Gulf official said.

The same dilemma applies to the United States’ desire to reduce its commitments in the Middle East. In its global rivalry with China, the US cannot afford to create the kind of void that China and Russia would not be able or willing to fill in the short-term.

“It’s a toss-up,” a Gulf analyst said. “The US can’t compete on 5G and China and Russia can’t compete on security. This is a situation and a set of relationships that requires careful management. The problem is that big power leaders show little inclination to find a middle ground. That leaves Gulf states grappling for ways to hedge their bets.” 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

While much of the focus in recent weeks has been on Israel’s relations with China, the real litmus test of the United States’ ability to counter the People’s Republic’s growing footprint in the Middle East is likely to be in the Gulf.

While much of the focus in recent weeks has been on Israel’s relations with China, the real litmus test of the United States’ ability to counter the People’s Republic’s growing footprint in the Middle East is likely to be in the Gulf. In talks last month with US Secretary of State Mike Pompeo, Israeli leaders made clear that while wanting to maintain close relations with China they would not risk jeopardising their long-standing ties to the United States, their closest ally and supporter of their controversial annexationist policies. Within days of Pompeo’s visit, Israel awarded a tender for the world’s largest desalination to an Israeli company rather than a competing Chinese firm. Similarly, Israeli officials say that Israel is unlikely to buy Chinese telecommunication giant Huawei’s 5G offering because of security considerations of its own. The US has been campaigning against the integration of Huawei components into networks of its allies. The real Israeli test may come next year when China takes over the management of Haifa port that is often frequented by ships of the US Sixth Fleet. US officials have suggested that Chinese control of the port could impact the US Navy’s willingness to use Haifa’s facilities. In contrast to Israel, the US is likely to find the going tougher in persuading Gulf states to limit their engagement with China, including with Huawei, which already has significant operations in the region. Like Israel, United Arab Emirates officials have sought to convey to the US that they see relations with the United States as indispensable even though that has yet to be put to a test when it comes to China. “The United States is our single most important strategic partnership. Sometimes people, when they think of our relationship with the US, they just look at the political/military angle. But this relationship is really much, much wider,” said UAE Minister of State for Foreign Affairs Anwar Gargash. Such a relationship, he added, is to be found in “IT, in business, investment, in soft power, in the presence of institutions such as NYU Abu Dhabi, in people like me who spent some of the best years of their lives in America.” Gargash was speaking after Pompeo’s visit to Israel and after a senior official issued a direct warning to Gulf states. “These states have to weigh the value of their partnership with the United States. We want our partner nations to do due diligence,” said US Assistant Secretary of State for Near Eastern Affairs David Schenker. Describing Chinese aid as “predatory,” Schenker warned that Huawei’s participation in 5G infrastructure in the Gulf would make it difficult for American and Gulf forces to communicate. Huawei has signed agreements with the UAE, Saudi Arabia, and Bahrain. “Huawei’s participation in 5G infrastructure in the Gulf would make it difficult for American and Gulf forces to communicate.” “We’re not forcing countries to choose between the United States and the PRC,” Schenker said, referring to the People’s Republic of China. “Countries can and should maintain healthy relationships with both, but we want to highlight the costs” that come with certain engagements with China. Earlier, an unidentified senior US official warned that Gulf states “risk rupturing the long-term strategic relationship they have with the US.” The US Navy’s Fifth Fleet operates out of Bahrain while Qatar hosts the forward headquarters of the US military’s Central Command (CENTCOM). In a message to Israel that was also intended for the Gulf, US Ambassador to Israel David Friedman laid out US concerns. “For two countries as close to each other as Israel and the US, when they cooperate and exchange intelligence and other secrets for their mutual protection on such a robust level, both countries need to be really careful about exposing that level of cooperation to a foreign power that may have a different agenda,” he said. Friedman asserted that China uses investments and infrastructure projects to “infiltrate” countries. “These [Chinese] companies have the ability to flick various switches and gain access to the most sensitive communications.” US Ambassador David Friedman asserted that China uses investments and infrastructure projects to “infiltrate” countries. The US Embassy in Abu Dhabi, in a shot across the Gulf’s bow, last month rejected a UAE offer to donate hundreds of coronavirus tests for screening of its staff. The snub was designed to put a dent in China’s health silk road diplomacy centered on its experience with the pandemic and ability to manufacture personal protective and medical equipment. A US official said the tests were rejected because they were either Chinese-made or involved BGI, a Chinese genomics company active in the Gulf, which raised concerns about patient privacy. The US softened the blow when the prestigious Ohio-based Cleveland Clinic sent 40 nurses and doctor to its Abu Dhabi subsidiary. The Abu Dhabi facility was tasked with treating the UAE’s most severe cases of coronavirus. The seemingly escalating US effort to box in China is hampered by the fact that no US company produces a 5G alternative. “5G is the future. To reconsider Huawei, the US has to offer an alternative. So far, it hasn’t done so,” a Gulf official said. The same dilemma applies to the United States’ desire to reduce its commitments in the Middle East. In its global rivalry with China, the US cannot afford to create the kind of void that China and Russia would not be able or willing to fill in the short-term. “It’s a toss-up,” a Gulf analyst said. “The US can’t compete on 5G and China and Russia can’t compete on security. This is a situation and a set of relationships that requires careful management. The problem is that big power leaders show little inclination to find a middle ground. That leaves Gulf states grappling for ways to hedge their bets.” (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

How big power rivalry is likely to unfold in the Gulf region

A Turkish-US business council is projecting Turkey as a trading alternative to China with the help of influential US Republican Senator Lindsey Graham, a close associate of President Donald J Trump.

The Turkish effort comes two weeks after President Recep Tayyip Erdogan heralded a new era in long-strained relations with Washington.

Graham’s agreement to participate in a webinar organised by the Turkey American Business Council (TAIK), an affiliate of the Foreign Economic Relations Board of Turkey (DEIK), the country’s oldest and largest business association, comes amid Turkish efforts to improve relations with the United States as a hedge to its ties to Russia.

“The growing rift between the United States and China creates a significant opportunity for geopolitical cooperation. Turkey and the United States would both benefit economically,” said a Turkish businessman.

Criticism of China’s handling of the coronavirus pandemic has widened the gap between Washington and Beijing and sparked calls for diversification of China-centric global supply chains.

Already hard hit, Turkey’s economy has suffered further body blows as a result of the pandemic at a time that Turkish and Russian forces have in recent months ended up on opposite sides of battles in northern Syria and Libya.

Forces of the Turkish-backed, internationally recognised Islamist Government of National Accord (GNA) drove Russian-supported rebels led by self-appointed Field Marshall Khalifa Haftar out of western Libya in recent weeks after Turkish electronic warfare and drones whacked Russian anti-defense missile systems.

Rejecting calls by Egypt and Haftar for a negotiated end to the Libyan conflict, the GNA has vowed to push further by taking the Haftar-controlled, oil-rich south-eastern city of Siirt. Turkey has seconded the GNA’s refusal to negotiate with Haftar.

Egyptian President Abdul Fattah Al-Sisi suggested this weekend that Egyptian troops could intervene if GNA forces attacked Siirt. An Egyptian intervention could lead to a battlefield confrontation with Turkey and further muddle Turkish attempts to manage differences with Russia.

Turkish efforts to improve relations with the United States are betting on the belief that the GNA’s military victories have dampened US hopes that Haftar could emerge as a unifying figure in Libya.

Turkish relations with the United States were strained by the NATO member’s acquisition of Russia’s S-400 anti-missile defense system, the presence in the US of a Turkish preacher whom Erdogan holds responsible for the failed 2016 military coup against him, and legal proceedings against a state-owned Turkish bank charged with circumventing US sanctions against Iran.

Erdogan is also banking on his personal relationship with Trump that in the past has produced decisions by the US president that overrode opposition from the Pentagon and other branches of his government.

First and foremost was Tump’s acquiescence to Erdogan’s request last year for a pullback of US troops in northern Syria that paved the way for a Turkish military incursion.

Erdogan again sought to capitalise on his relationship with Trump in a June 9 phone call. “To be honest, after our conversation tonight, a new era can begin between the United States and Turkey,” Erdogan said without offering further details.

Erdogan spoke to Trump as Turkey was projecting itself as an important US trading partner.

The TAIK webinar, entitled ‘A Time for Allies to be Allies: Turkish American Global Supply Chain,’ in which Mr. Graham is scheduled to speak alongside former US Senator David Vitter of Louisiana, is part of an effort to position Turkey as a key player in reducing US dependence on Chinese supply chains.

Foreign Lobby Report, a Washington-based online news service, reported that TAIK, working with lobbying firm Mercury Public Affairs, had approached Mr. Graham in March with the proposition that Turkey could serve as the United States’ gateway to Africa.

“As we strive to move forward, we at TAIK are already contemplating how we can reignite the economy post-pandemic,” TAIK chairman Mehmet Ali Yalcindag wrote in a letter to Graham. “Joint ventures in Africa could be an exciting part of this plan. Not only would we be helping fragile economies that will need assistance in recovering, but we also would be striking a blow against Chinese designs in Africa and forging closer economic ties between Turkey and the US.”

Yalcindag recommended in a separate letter last month to US Commerce Secretary Wilbur Ross “an initial focus on LNG (liquified natural gas) and agriculture imports from the US. At the same time, Turkey could boost exports of white goods and automotive parts — diversifying America’s supply chain away from China, a stated goal of the Trump Administration.”

Boosting agriculture exports that were hard hit by Trump’s tariffs on Chinese imports ranks high on the president’s priority list.

Vitter, the former senator scheduled to speak in the TAIK webinar, backs a push by Louisiana Natural Gas Exports Inc. to provide Turkey with “long-term, secure, competitively priced access to Turkey’s LNG terminals, gas pipeline and storage facilities” that would make the country less dependent on Russian and Iranian imports.

The push came as Botas, Turkey’s state-owned gas grid operator, opened a tender for the construction of a pipeline to Nakhichevan, an Azerbaijani exclave in Armenia. The pipeline would allow Azerbaijan to reduce imports from Iran.

Erdogan and his energy minister, Fatih Donmez, have long called for diversification of Turkey’s energy imports.

Turkey last month authorised twice-weekly cargo flights by El Al, Israel’s national carrier, between Istanbul and Tel Aviv despite its strained relations with the Jewish state. Two of those flights ferried medical supplies from Turkey to the United States. The flights to Turkey were El Al’s first in ten years.

“Now is the time to reinforce the climate of cooperation and solidarity, China-dependent firms in the supply chain are…turning their eyes to different countries, Turkey being among them,” Yalcindag said, pointing to the fact that Walmart, one of the world’s biggest retailers, had begun to source products in Turkey.

Predicting that a decoupling of the United States and China would create common interests between the US and Turkey, Turkish Vice President Fuat Oktay added that “the pre-pandemic global economy was built on a single supply chain, with China at its core. For countries like Turkey, with our robust manufacturing sector and our young population, this will be an economic opportunity.” 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

A Turkish-US business council is projecting Turkey as a trading alternative to China with the help of influential US Republican Senator Lindsey Graham, a close associate of President Donald J Trump.

A Turkish-US business council is projecting Turkey as a trading alternative to China with the help of influential US Republican Senator Lindsey Graham, a close associate of President Donald J Trump. The Turkish effort comes two weeks after President Recep Tayyip Erdogan heralded a new era in long-strained relations with Washington. Graham’s agreement to participate in a webinar organised by the Turkey American Business Council (TAIK), an affiliate of the Foreign Economic Relations Board of Turkey (DEIK), the country’s oldest and largest business association, comes amid Turkish efforts to improve relations with the United States as a hedge to its ties to Russia. “The growing rift between the United States and China creates a significant opportunity for geopolitical cooperation. Turkey and the United States would both benefit economically,” said a Turkish businessman. Criticism of China’s handling of the coronavirus pandemic has widened the gap between Washington and Beijing and sparked calls for diversification of China-centric global supply chains. Already hard hit, Turkey’s economy has suffered further body blows as a result of the pandemic at a time that Turkish and Russian forces have in recent months ended up on opposite sides of battles in northern Syria and Libya. Forces of the Turkish-backed, internationally recognised Islamist Government of National Accord (GNA) drove Russian-supported rebels led by self-appointed Field Marshall Khalifa Haftar out of western Libya in recent weeks after Turkish electronic warfare and drones whacked Russian anti-defense missile systems. Rejecting calls by Egypt and Haftar for a negotiated end to the Libyan conflict, the GNA has vowed to push further by taking the Haftar-controlled, oil-rich south-eastern city of Siirt. Turkey has seconded the GNA’s refusal to negotiate with Haftar. Egyptian President Abdul Fattah Al-Sisi suggested this weekend that Egyptian troops could intervene if GNA forces attacked Siirt. An Egyptian intervention could lead to a battlefield confrontation with Turkey and further muddle Turkish attempts to manage differences with Russia. Turkish efforts to improve relations with the United States are betting on the belief that the GNA’s military victories have dampened US hopes that Haftar could emerge as a unifying figure in Libya. Turkish relations with the United States were strained by the NATO member’s acquisition of Russia’s S-400 anti-missile defense system, the presence in the US of a Turkish preacher whom Erdogan holds responsible for the failed 2016 military coup against him, and legal proceedings against a state-owned Turkish bank charged with circumventing US sanctions against Iran. Erdogan is also banking on his personal relationship with Trump that in the past has produced decisions by the US president that overrode opposition from the Pentagon and other branches of his government. First and foremost was Tump’s acquiescence to Erdogan’s request last year for a pullback of US troops in northern Syria that paved the way for a Turkish military incursion. Erdogan again sought to capitalise on his relationship with Trump in a June 9 phone call. “To be honest, after our conversation tonight, a new era can begin between the United States and Turkey,” Erdogan said without offering further details. Erdogan spoke to Trump as Turkey was projecting itself as an important US trading partner. The TAIK webinar, entitled ‘A Time for Allies to be Allies: Turkish American Global Supply Chain,’ in which Mr. Graham is scheduled to speak alongside former US Senator David Vitter of Louisiana, is part of an effort to position Turkey as a key player in reducing US dependence on Chinese supply chains. Foreign Lobby Report, a Washington-based online news service, reported that TAIK, working with lobbying firm Mercury Public Affairs, had approached Mr. Graham in March with the proposition that Turkey could serve as the United States’ gateway to Africa. “As we strive to move forward, we at TAIK are already contemplating how we can reignite the economy post-pandemic,” TAIK chairman Mehmet Ali Yalcindag wrote in a letter to Graham. “Joint ventures in Africa could be an exciting part of this plan. Not only would we be helping fragile economies that will need assistance in recovering, but we also would be striking a blow against Chinese designs in Africa and forging closer economic ties between Turkey and the US.” Yalcindag recommended in a separate letter last month to US Commerce Secretary Wilbur Ross “an initial focus on LNG (liquified natural gas) and agriculture imports from the US. At the same time, Turkey could boost exports of white goods and automotive parts — diversifying America’s supply chain away from China, a stated goal of the Trump Administration.” Boosting agriculture exports that were hard hit by Trump’s tariffs on Chinese imports ranks high on the president’s priority list. Vitter, the former senator scheduled to speak in the TAIK webinar, backs a push by Louisiana Natural Gas Exports Inc. to provide Turkey with “long-term, secure, competitively priced access to Turkey’s LNG terminals, gas pipeline and storage facilities” that would make the country less dependent on Russian and Iranian imports. The push came as Botas, Turkey’s state-owned gas grid operator, opened a tender for the construction of a pipeline to Nakhichevan, an Azerbaijani exclave in Armenia. The pipeline would allow Azerbaijan to reduce imports from Iran. Erdogan and his energy minister, Fatih Donmez, have long called for diversification of Turkey’s energy imports. Turkey last month authorised twice-weekly cargo flights by El Al, Israel’s national carrier, between Istanbul and Tel Aviv despite its strained relations with the Jewish state. Two of those flights ferried medical supplies from Turkey to the United States. The flights to Turkey were El Al’s first in ten years. “Now is the time to reinforce the climate of cooperation and solidarity, China-dependent firms in the supply chain are…turning their eyes to different countries, Turkey being among them,” Yalcindag said, pointing to the fact that Walmart, one of the world’s biggest retailers, had begun to source products in Turkey. Predicting that a decoupling of the United States and China would create common interests between the US and Turkey, Turkish Vice President Fuat Oktay added that “the pre-pandemic global economy was built on a single supply chain, with China at its core. For countries like Turkey, with our robust manufacturing sector and our young population, this will be an economic opportunity.” (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Growing rift between US and China creates a significant opportunity for Turkey

The US lawmakers and policymakers should be wary of China's moves to target vulnerable US assets and expand its market share in the wake of the global economic crisis triggered by the novel coronavirus, news agency Reuters reported quoting a study prepared for a US trade group and released on Tuesday.

The US lawmakers and policymakers should be wary of China's moves to target vulnerable US assets and expand its market share in the wake of the global economic crisis triggered by the novel coronavirus, news agency Reuters reported quoting a study prepared for a US trade group and released on Tuesday. The reported quoted Horizon Advisory report for the Alliance for American Manufacturing (AAM). According to AAM report the Chinese Communist Party viewed the crisis as "a chance to expand its position in US markets, supply chains and critical infrastructure." Also read: Cold War 2.0: US and its allies tussle against China, Russia The consultancy said Beijing used the 2008-2009 global financial crisis to accelerate its "Go Out" industrial offensive in the United States and was positioned to benefit from a likely spike in US infrastructure spending. "It's a very sophisticated strategy," AAM President Scott Paul said in an interview. "There's a very legitimate debate that needs to occur about the appropriate role of Beijing in the US economy, and there are reasons to be wary of including Chinese state-owned enterprises in our recovery effort." Also read: Chinese activists detained for publishing censored content set to face criminal trial Paul said his lobby group was working with Democratic and Republican lawmakers to strengthen and expand provisions that earmark government funds for US companies, and ensure they do not wind up in the hands of Chinese state-owned firms or investors. Paul said the report showed China had identified "friendly" public officials and states including Kentucky, home of Senate Majority Leader Mitch McConnell, which has attracted increased Chinese investment in recent years. Chinese acquisitions have come under greater U.S. scrutiny to determine their effect on national security, but takeovers could increase if the crisis left many distressed assets, as expected, he said. (With inputs from Reuters)

China keen to seek benefits from pandemic, distressed US assets: Report

Major US companies will remain engaged in developing a global 5G mobile standard, as Washington seeks to keep them in the same room as Huawei Technologies, which is already&nbsp;ahead in drawing up the specifications.

The US Commerce Department and other agencies signed off on a rule change on Monday that ensures Huawei’s inclusion in a US trade blacklist will not prevent American companies from international 5G standards-development activities.

Also read:&nbsp;<a href="https://www.wionews.com/world/china-is-using-huawei-to-drive-a-wedge-in-the-uk-us-special-relationship-senator-302736">China is using Huawei to drive a wedge in the UK-US special relationship: Senator</a>

“This is not a friendly gesture by the US, but simply a reflection on its part that it is too late and too expensive for any country to develop its own 5G standard,” Jefferies equity analyst Edison Lee said on Tuesday.

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/gravitas-will-the-huawei-cfo-be-extradited-to-the-us-301669/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

A Huawei spokeswoman declined to comment on the US decision.

<iframe data-google-container-id="4" data-load-complete="true" frameborder="0" height="1" id="google_ads_iframe_/8134/scmp/web/tech_chinatech/article/outstream1_0" marginheight="0" marginwidth="0" name="google_ads_iframe_/8134/scmp/web/tech_chinatech/article/outstream1_0" scrolling="no" srcdoc="" title="3rd party ad content" width="1"></iframe>Lee said feedback from&nbsp;US tech companies likely convinced the Trump administration&nbsp;that it is not realistic for the US to create its own version of 5G. Large US firms, including Intel Corp and Qualcomm, have already contributed plenty to 5G standards under the 3rd Generation Partnership Project (3GPP), an international collaboration of seven telecoms standard development organisations that draw up complete mobile system specifications.

The stakes are high for US companies to remain in these standards discussions because 3GPP is now at work on introducing Release 16 of the next-generation mobile technology’s global standard. This involves support for new applications such as autonomous driving, smart factories and remote surgeries in the health care sector – among a range of innovations that are expected to help fuel economic growth for countries over the next decade.

“The US has more to lose if their companies are cut off from further participation in that process,” Jefferies’ Lee said. “Huawei has leading patent shares in 5G, which could rise further if US companies stop contributing.”

China’s road to 5G has been filled with difficulties. In 2012, two years before China Mobile launched 4G services on the mainland, various Chinese entities joined an international initiative to research and develop 5G.

The world’s second largest economy is now estimated to account for 35 per cent of 5G standard-essential patent declarations, about 15 per cent of which come from Shenzhen-based Huawei, according to Lee, citing data from German research firm IPlytics. By comparison, US companies’ share is estimated at roughly 13 per cent, he said.

Major US companies will remain engaged in developing a global 5G mobile standard, as Washington seeks to keep them in the same room as Huawei Technologies, which is already ahead in drawing up the specifications.

Major US companies will remain engaged in developing a global 5G mobile standard, as Washington seeks to keep them in the same room as Huawei Technologies, which is already ahead in drawing up the specifications. The US Commerce Department and other agencies signed off on a rule change on Monday that ensures Huawei’s inclusion in a US trade blacklist will not prevent American companies from international 5G standards-development activities. Also read: China is using Huawei to drive a wedge in the UK-US special relationship: Senator “This is not a friendly gesture by the US, but simply a reflection on its part that it is too late and too expensive for any country to develop its own 5G standard,” Jefferies equity analyst Edison Lee said on Tuesday. A Huawei spokeswoman declined to comment on the US decision. Lee said feedback from US tech companies likely convinced the Trump administration that it is not realistic for the US to create its own version of 5G. Large US firms, including Intel Corp and Qualcomm, have already contributed plenty to 5G standards under the 3rd Generation Partnership Project (3GPP), an international collaboration of seven telecoms standard development organisations that draw up complete mobile system specifications. The stakes are high for US companies to remain in these standards discussions because 3GPP is now at work on introducing Release 16 of the next-generation mobile technology’s global standard. This involves support for new applications such as autonomous driving, smart factories and remote surgeries in the health care sector – among a range of innovations that are expected to help fuel economic growth for countries over the next decade. “The US has more to lose if their companies are cut off from further participation in that process,” Jefferies’ Lee said. “Huawei has leading patent shares in 5G, which could rise further if US companies stop contributing.” China’s road to 5G has been filled with difficulties. In 2012, two years before China Mobile launched 4G services on the mainland, various Chinese entities joined an international initiative to research and develop 5G. The world’s second largest economy is now estimated to account for 35 per cent of 5G standard-essential patent declarations, about 15 per cent of which come from Shenzhen-based Huawei, according to Lee, citing data from German research firm IPlytics. By comparison, US companies’ share is estimated at roughly 13 per cent, he said.

US tech firms to remain involved with Huawei on 5G and other standards

Russia has confirmed that it will open talks with the US this month on extending a major nuclear disarmament treaty but warned that Washington’s&nbsp;insistence on including China&nbsp;could scuttle efforts.

Deputy Foreign Minister Sergei Ryabkov will meet in Vienna on June 22 with US envoy Marshall Billingslea to start negotiations on New START, which expires in February.

President Donald Trump has walked out on a number of international agreements but voiced a general interest in preserving New START, which obliged the United States and Russia to halve their inventories of strategic nuclear missile launchers.

Also read:&nbsp;<a href="https://www.wionews.com/world/new-york-governor-andrew-cuomo-slams-trumps-claim-that-protester-fell-harder-than-was-pushed-304648" hreflang="en">New York Governor Andrew Cuomo slams Trump for his remarks on protester</a>

But the Trump administration says that a successor to New START, a Cold War legacy negotiated under Barack Obama, should bring in China -- whose nuclear arsenal is growing but remains significantly smaller than those of Russia and the United States.

Addressing the Council on Foreign Relations by videoconference, Ryabkov described the US willingness to start negotiations as "good news" but said: "The ball is on the American part of the court."

"We need to hear loudly and clearly what this administration wants, how it believes it would be possible to do something positive and not just to dismantle one arms control treaty or arrangement after another."

In Beijing, foreign ministry spokeswoman Hua Chunying said China had "no intention of participating" in the talks and accused the United States of trying to "deflect responsibilities to others."

Ryabkov indicated that Russia did not oppose the US invitation to China -- an international ally of Moscow despite a complicated historical relationship -- but doubted Beijing would agree.

"My answer to a direct question on whether or not we think it would be possible to bring China to the table would be a flat and straightforward no," Ryabkov said.

"Now it depends on the US -- if the US believes it's worth continuing this dialogue with Russia or, for the US point of view, the Chinese participation is an absolute imperative that precludes (the) US from continuing a meaningful and forward-looking dialogue with Russia on arms control," he said.

&nbsp;

Russia has confirmed that it will open talks with the US this month on extending a major nuclear disarmament treaty but warned that Washington’s insistence on including China could scuttle efforts.

Russia has confirmed that it will open talks with the US this month on extending a major nuclear disarmament treaty but warned that Washington’s insistence on including China could scuttle efforts. Deputy Foreign Minister Sergei Ryabkov will meet in Vienna on June 22 with US envoy Marshall Billingslea to start negotiations on New START, which expires in February. President Donald Trump has walked out on a number of international agreements but voiced a general interest in preserving New START, which obliged the United States and Russia to halve their inventories of strategic nuclear missile launchers. Also read: New York Governor Andrew Cuomo slams Trump for his remarks on protester But the Trump administration says that a successor to New START, a Cold War legacy negotiated under Barack Obama, should bring in China -- whose nuclear arsenal is growing but remains significantly smaller than those of Russia and the United States. Addressing the Council on Foreign Relations by videoconference, Ryabkov described the US willingness to start negotiations as "good news" but said: "The ball is on the American part of the court." "We need to hear loudly and clearly what this administration wants, how it believes it would be possible to do something positive and not just to dismantle one arms control treaty or arrangement after another." In Beijing, foreign ministry spokeswoman Hua Chunying said China had "no intention of participating" in the talks and accused the United States of trying to "deflect responsibilities to others." Ryabkov indicated that Russia did not oppose the US invitation to China -- an international ally of Moscow despite a complicated historical relationship -- but doubted Beijing would agree. "My answer to a direct question on whether or not we think it would be possible to bring China to the table would be a flat and straightforward no," Ryabkov said. "Now it depends on the US -- if the US believes it's worth continuing this dialogue with Russia or, for the US point of view, the Chinese participation is an absolute imperative that precludes (the) US from continuing a meaningful and forward-looking dialogue with Russia on arms control," he said.

Russia to open nuclear disarmament talks with US amid China cloud

China and the Gulf states are in the same boat as they grapple with uncertainty about regional security against the backdrop of doubts about the United States’ commitment to the region.

Like the Gulf states, China has long relied on the US defence umbrella to ensure the security of the flow of energy and other goods through waters surrounding the Gulf.

In anticipation of the day when China can no longer depend on security provided by the United States free of charge, China has gradually adjusted its defence strategy and built its first foreign military facility in Djibouti facing the Gulf from the Horn of Africa.

With the People’s Liberation Army Navy tasked with protecting China’s sea lines of communication and safeguarding its overseas interests, strategic planners have signalled that Djibouti is a first step in the likely establishment of further bases that would allow it to project long-range capability and shorten the time needed to resupply.

But Chinese strategic planners and their Gulf counterparts may part ways when it comes to what would be acceptable geopolitical parameters for a rejuvenated regional security architecture.

A rejiggered architecture would likely embed rather than exclude the US defence umbrella primarily designed to protect conservative energy-rich monarchies against Iran and counter militancy.

In contrast to China and Russia, Gulf states, as a matter of principle, favour identifying Iran as the enemy and have cold-shouldered proposals for a non-aggression agreement. But for that they need the United States to be a reliable partner that would unconditionally come to their defence at whatever cost.

For its part, China goes to great lengths to avoid being sucked into the Middle East’s myriad conflicts. Adopting a different approach, Russia has put forward a plan for a multilateral security structure based on a non-aggression understanding that would include Iran.

No doubt, China, unlike Russia, wants to postpone the moment in which it has no choice but to become involved in Gulf security. However, China could find itself under pressure sooner rather than later depending on how Gulf perceptions of risk in the continued reliance on the United States evolve.

One factor that could propel things would be a change of guard in the White House as a result of the US election in November.

Democratic presumptive candidate Joe Biden, as president, may strike a more internationalist tone than Donald Trump, though Biden administration’s relations with Saudi Arabia could prove to be more strained. Similarly, Biden’s focus, like that of Trump, is likely to be China rather than the Middle East.

By the same token, China’s appraisal of its ability to rely on the US in the Gulf could change depending on how mounting tensions with the US and potential decoupling of the world’s two largest economies unfolds.

China’s increased security engagement in Central Asia may well be an indication of how it hopes to proceed in the Gulf and the broader Middle East. China has stepped up joint military exercises with various Central Asian nations while its share of the Central Asian arms market has increased from 1.5 per cent in 2014 to 18 per cent today.

Founded in 2001 as a Central Asian security grouping, the Shanghai Cooperation Organisation (SCO) has expanded its relationships in South Asia and the Caucasus and admitted Iran as an observer.

Referring to China’s infrastructure, telecommunications, and energy-driven Belt and Road Initiative (BRI) that seeks to link the Eurasian landmass to the People’s Republic, China and Central Asia scholar Raffaello Pantucci explained that: “China is expanding its security role in Central Asia to protect its interests in the region and is increasingly unwilling to abrogate security entirely to either local security forces or Russia.”

“By doing so, Beijing is demonstrating an approach that could be read as a blueprint for how China might advance its security relations in other BRI countries,” Pantucci wrote.

Central Asia may find it easier than the Gulf to accommodate the Chinese approach.

The problem for most of the Gulf states is that taking Chinese and Russian concerns into account in any new security arrangement would have to entail paradigm shifts in their attitudes toward Iran.

Saudi Arabia and the United Arab Emirates – which has recently made overtures to Iran, insist that any real détente has to involve a halt to Iranian support for proxies in various Middle Eastern countries as well as a return to a renegotiated agreement that would curb not only the Islamic Republic’s nuclear program but also its development of ballistic missiles.

Caught between the rock of perceived US unreliability and the hard place of Chinese and Russian geopolitical imperatives, smaller Gulf states, including the UAE, in contrast to Saudi Arabia, are hedging their bets by cautiously reaching out to Iran in different ways.

They hope that the overtures will take them out of the firing line should either Iran or the United States, by accident or deliberately, heighten tensions and/or spark a wider military confrontation.

To be sure, various Gulf states have different calculations. Saudi Arabia and Bahrain have adopted the most hardline position toward Iran. Oman and Qatar have long maintained normal relations, while the UAE and Kuwait have made limited overtures.

In the short run, Gulf states’ realisation of China and Russia’s parameters could persuade them to maintain their levels of expenditure on weapons acquisitions. And, in the case of Saudi Arabia and the UAE, to pursue the development of domestic defence industry, despite the economic fallout of the pandemic, the drop of oil and gas prices, and the shrinking of energy markets.

Probably, so will recent Iranian military advances. Iran last week publicly displayed what is believed to be an unmanned underwater vehicle that would allow the Revolutionary Guards’ navy to project greater power – because of its long-range, better-integrated weapons systems – and more efficiently lay underwater mines.

The vehicle put Iran in an even more elite club than the one it joined in April when it successfully launched a military satellite, a capability only a dozen countries have. When it comes to unmanned underwater vehicles, Iran rubs shoulder with only three countries: the United States, Britain, and China.

Iran’s advances serve two purposes: they highlight the failure of the United States’ two-year-old sanctions-driven maximum pressure campaign to force Iran’s economy on its knees, and, together with massive US arms sales to Gulf countries, they fuel a regional arms race.

To be sure, Russia and China benefit from the race to a limited degree too.

In the ultimate analysis, however, the race could contribute to heightened tensions that risk putting one more nail in the coffin of a US-dominated regional architecture. That, in turn, could force external powers like China to engage whether they want to or not.

“China is quickly learning that you can’t trade and invest in an unstable place like the Middle East if you don’t have the means to protect your interests,” said Israeli journalist David Rosenberg. “Where business executives come, warships and commando units follow, and they will follow big. 
 
&nbsp;(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

China and the Gulf states are in the same boat as they grapple with uncertainty about regional security against the backdrop of doubts about the United States’ commitment to the region.

China and the Gulf states are in the same boat as they grapple with uncertainty about regional security against the backdrop of doubts about the United States’ commitment to the region. Like the Gulf states, China has long relied on the US defence umbrella to ensure the security of the flow of energy and other goods through waters surrounding the Gulf. In anticipation of the day when China can no longer depend on security provided by the United States free of charge, China has gradually adjusted its defence strategy and built its first foreign military facility in Djibouti facing the Gulf from the Horn of Africa. With the People’s Liberation Army Navy tasked with protecting China’s sea lines of communication and safeguarding its overseas interests, strategic planners have signalled that Djibouti is a first step in the likely establishment of further bases that would allow it to project long-range capability and shorten the time needed to resupply. But Chinese strategic planners and their Gulf counterparts may part ways when it comes to what would be acceptable geopolitical parameters for a rejuvenated regional security architecture. A rejiggered architecture would likely embed rather than exclude the US defence umbrella primarily designed to protect conservative energy-rich monarchies against Iran and counter militancy. In contrast to China and Russia, Gulf states, as a matter of principle, favour identifying Iran as the enemy and have cold-shouldered proposals for a non-aggression agreement. But for that they need the United States to be a reliable partner that would unconditionally come to their defence at whatever cost. For its part, China goes to great lengths to avoid being sucked into the Middle East’s myriad conflicts. Adopting a different approach, Russia has put forward a plan for a multilateral security structure based on a non-aggression understanding that would include Iran. No doubt, China, unlike Russia, wants to postpone the moment in which it has no choice but to become involved in Gulf security. However, China could find itself under pressure sooner rather than later depending on how Gulf perceptions of risk in the continued reliance on the United States evolve. One factor that could propel things would be a change of guard in the White House as a result of the US election in November. Democratic presumptive candidate Joe Biden, as president, may strike a more internationalist tone than Donald Trump, though Biden administration’s relations with Saudi Arabia could prove to be more strained. Similarly, Biden’s focus, like that of Trump, is likely to be China rather than the Middle East. By the same token, China’s appraisal of its ability to rely on the US in the Gulf could change depending on how mounting tensions with the US and potential decoupling of the world’s two largest economies unfolds. China’s increased security engagement in Central Asia may well be an indication of how it hopes to proceed in the Gulf and the broader Middle East. China has stepped up joint military exercises with various Central Asian nations while its share of the Central Asian arms market has increased from 1.5 per cent in 2014 to 18 per cent today. Founded in 2001 as a Central Asian security grouping, the Shanghai Cooperation Organisation (SCO) has expanded its relationships in South Asia and the Caucasus and admitted Iran as an observer. Referring to China’s infrastructure, telecommunications, and energy-driven Belt and Road Initiative (BRI) that seeks to link the Eurasian landmass to the People’s Republic, China and Central Asia scholar Raffaello Pantucci explained that: “China is expanding its security role in Central Asia to protect its interests in the region and is increasingly unwilling to abrogate security entirely to either local security forces or Russia.” “By doing so, Beijing is demonstrating an approach that could be read as a blueprint for how China might advance its security relations in other BRI countries,” Pantucci wrote. Central Asia may find it easier than the Gulf to accommodate the Chinese approach. The problem for most of the Gulf states is that taking Chinese and Russian concerns into account in any new security arrangement would have to entail paradigm shifts in their attitudes toward Iran. Saudi Arabia and the United Arab Emirates – which has recently made overtures to Iran, insist that any real détente has to involve a halt to Iranian support for proxies in various Middle Eastern countries as well as a return to a renegotiated agreement that would curb not only the Islamic Republic’s nuclear program but also its development of ballistic missiles. Caught between the rock of perceived US unreliability and the hard place of Chinese and Russian geopolitical imperatives, smaller Gulf states, including the UAE, in contrast to Saudi Arabia, are hedging their bets by cautiously reaching out to Iran in different ways. They hope that the overtures will take them out of the firing line should either Iran or the United States, by accident or deliberately, heighten tensions and/or spark a wider military confrontation. To be sure, various Gulf states have different calculations. Saudi Arabia and Bahrain have adopted the most hardline position toward Iran. Oman and Qatar have long maintained normal relations, while the UAE and Kuwait have made limited overtures. In the short run, Gulf states’ realisation of China and Russia’s parameters could persuade them to maintain their levels of expenditure on weapons acquisitions. And, in the case of Saudi Arabia and the UAE, to pursue the development of domestic defence industry, despite the economic fallout of the pandemic, the drop of oil and gas prices, and the shrinking of energy markets. Probably, so will recent Iranian military advances. Iran last week publicly displayed what is believed to be an unmanned underwater vehicle that would allow the Revolutionary Guards’ navy to project greater power – because of its long-range, better-integrated weapons systems – and more efficiently lay underwater mines. The vehicle put Iran in an even more elite club than the one it joined in April when it successfully launched a military satellite, a capability only a dozen countries have. When it comes to unmanned underwater vehicles, Iran rubs shoulder with only three countries: the United States, Britain, and China. Iran’s advances serve two purposes: they highlight the failure of the United States’ two-year-old sanctions-driven maximum pressure campaign to force Iran’s economy on its knees, and, together with massive US arms sales to Gulf countries, they fuel a regional arms race. To be sure, Russia and China benefit from the race to a limited degree too. In the ultimate analysis, however, the race could contribute to heightened tensions that risk putting one more nail in the coffin of a US-dominated regional architecture. That, in turn, could force external powers like China to engage whether they want to or not. “China is quickly learning that you can’t trade and invest in an unstable place like the Middle East if you don’t have the means to protect your interests,” said Israeli journalist David Rosenberg. “Where business executives come, warships and commando units follow, and they will follow big. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

China can no longer rely on US defence umbrella for security in the Gulf region

US-China relations have kept the global economy and all the economic agents on the edge of their seats. Even when COVID-19 has cast a dark spell on the globe, both sides are doing their best to entertain us. Geopolitics deaccelerated the global economy in 2019 and in the beginning of this year it took a pause. Then virus entered into scene and it became the theme of round two in this clash of titans. Both sides blamed each other for spreading the virus, private companies were being targeted and now Hong Kong has become the epicentre. After China approved a new security bill which will impact the autonomy of Hong Kong, the US took steps to revoke special trade privileges it gave to Hong Kong. Although Phase 1 trade deal is still intact for now. However, it brings the question&nbsp;why these nations are engaged in this trade conflict.&nbsp;

US story

Team US knows that free international trade is advantageous (positive-sum game) for both the parties as argued by Adam Smith and David Ricardo. However, the US argues that it only happens if both the parties abide by the rules of free trade and if that’s not the case then trade become zero-sum game (where one would gain at the cost of other). So players of team US states that even after China joined WTO they continued to engage in unfair trade practices and acted like a modern mercantilist. China gave export subsidies and manipulated its currency to get an unfair competitive advantage in the international market. So the US imposed all these trade barriers on China to create a level playing field. Beside this US feels that China has poached a lot of US companies to do business in China and that has impacted jobs of workers in the US. At the same time, China is accused of using various means to exploit MNCs in China. Such as forced technology transfer, IP thefts, biased treatment between foreign MNCs and domestic Chinese firms. China has also been accused of cyber-attacks. So all the trade and non-trade measures like attacking business eco-system of Huawei are taken as a response to China’s unfair actions. &nbsp;

China’s Story&nbsp;

China is considered the world’s factory and it seems to have acted like one big firm. In the 1970s, it realised that its labour is relatively cheap and efficient than neighbouring countries and it started taking advantage. China incentivised local officials to take advantage of this cheap labours. Generally, a politician’s objective is considered votes and bureaucrat’s objective is power and control. So they engage in rent-seeking behaviour like bribes, while local politicians engage in favours for its voters to maintain its vote bank. Now China here took advantage of its authoritarian regime and created a system where a local official would rose in rank if his/her area would develop rapidly. So these local officials started bringing in foreign companies and technologies to their cities, establish factories and develop their cities. Gradually China deregulated its economy, increased its expenditure in R&amp;D (from less than 0.6 per cent of GDP in 1996 to 2.14 per cent of GDP as per world bank) became a member of WTO, started manufacturing more high value-added products and used means like reverse engineering to catch up with latest technologies pretty quickly. &nbsp;

Now, China has caught up with most of the latest technologies in most of the sectors, so this means the skills of workers increased and that translated in high wages of labour. This rise in labour cost is reducing the attraction for MNCs to establish themselves in China. Current geopolitical environment and negative feelings against China after pandemic are actually pushing companies away from China. &nbsp;

Economic growth is important as it reduces the chances of social unrest. For this, China has to open up the economy and make it more competitive. However, that is difficult because China is a homogenous country and diversity brought in by globalisation makes it uncomfortable. At the same time, China still remembers a century of humiliation where different foreign powers conquered China again and again. So that also acts as hurdles in opening up. &nbsp;

US-China conflict

After World War II, the world was bipolar and two great powers the US and USSR existed. Then in 1990, USSR collapsed and America became global hegemon (Supreme Power). For many years China, on the other hand, remained low and continued developing itself without global ambitions. However, now China feels that it has developed enough and after 2008 crises it seems to be more convinced that it in the near future it would become a global superpower. &nbsp;

Organski has stated in his power transition theory that hegemon state would try to prevent any challenger from rising and threatening its hegemony. This explains all the actions that the US takes against China, whether it’s a weaponising economic tool or attacking image and intentions of China. America also has a big advantage of soft power (Influencing through appeal and attraction rather than force). The American ethos of liberal ideas, making big on your own and pop culture resonate so deeply with the whole world that it became a symbol of the way ahead. &nbsp;

This soft power is something that China is struggling with. Chinese actions in Hong Kong, the South China Sea, trapping countries by debts is portraying China as a bully. Currently, there is a higher mistrust against China in the world. So the US is taking various actions against China as that would not just harm the dragon but may also potentially increase the soft power of America. It’s because these actions will portray that the US punished China for its wrongdoings on behalf of the whole world. &nbsp;

So China is trying to compensate by improving its technology. As it believes that this would not just help in growing economically but also in influencing people across the world. Huawei is like one of the flag bearers for China in this regard. That’s why the US is attacking the company so as to delay the technological advancement of China.&nbsp;

China is also considered a system designer or some say a system re-designer. China feels that the current system is designed by the US to maintain its hegemony. So what’s the better time to redesign the system and stronghold its presence when the world is destabilised and in shock. That explains the aggressive actions of China recently. This shows that even Europe would become a battleground. After the world war, the US helped Europe by Marshall Plan which cemented their relations, but this time the US has in-fact imposed trade barriers on Europe and that is impacting relations negatively. Relations within Europe are also not on best terms. Brexit brought tensions between the UK and the European Union. Even members of the European Union are dealing with mistrust among them. So all this creates an opportunity for China to increase its influence in Europe at the expense of the US.&nbsp;

Now China has done a lot of catch up effect. So, to keep growing rapidly, innovations in new technologies are a must. For that China needs to incentivise and deregulate its Universities and private companies a lot more. But highly deregulated universities and private companies have huge potential to challenge the authoritarian regime in China. If it won’t do that then economic growth may stagnate and that in itself will lead to revolt. So it seems that way ahead is pretty tough for China even domestically and in that case, the US may continue to enjoy its hegemony. However, China growth story is pretty unique and we can’t write it off that simply. So fasten your seatbelt and enjoy the ride. &nbsp; &nbsp;

&nbsp;(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp;

US-China relations have kept the global economy and all the economic agents on the edge of their seats. Even when COVID-19 has cast a dark spell on the globe, both sides are doing their best to entertain us.

US-China relations have kept the global economy and all the economic agents on the edge of their seats. Even when COVID-19 has cast a dark spell on the globe, both sides are doing their best to entertain us. Geopolitics deaccelerated the global economy in 2019 and in the beginning of this year it took a pause. Then virus entered into scene and it became the theme of round two in this clash of titans. Both sides blamed each other for spreading the virus, private companies were being targeted and now Hong Kong has become the epicentre. After China approved a new security bill which will impact the autonomy of Hong Kong, the US took steps to revoke special trade privileges it gave to Hong Kong. Although Phase 1 trade deal is still intact for now. However, it brings the question why these nations are engaged in this trade conflict. US story Team US knows that free international trade is advantageous (positive-sum game) for both the parties as argued by Adam Smith and David Ricardo. However, the US argues that it only happens if both the parties abide by the rules of free trade and if that’s not the case then trade become zero-sum game (where one would gain at the cost of other). So players of team US states that even after China joined WTO they continued to engage in unfair trade practices and acted like a modern mercantilist. China gave export subsidies and manipulated its currency to get an unfair competitive advantage in the international market. So the US imposed all these trade barriers on China to create a level playing field. Beside this US feels that China has poached a lot of US companies to do business in China and that has impacted jobs of workers in the US. At the same time, China is accused of using various means to exploit MNCs in China. Such as forced technology transfer, IP thefts, biased treatment between foreign MNCs and domestic Chinese firms. China has also been accused of cyber-attacks. So all the trade and non-trade measures like attacking business eco-system of Huawei are taken as a response to China’s unfair actions. China’s Story China is considered the world’s factory and it seems to have acted like one big firm. In the 1970s, it realised that its labour is relatively cheap and efficient than neighbouring countries and it started taking advantage. China incentivised local officials to take advantage of this cheap labours. Generally, a politician’s objective is considered votes and bureaucrat’s objective is power and control. So they engage in rent-seeking behaviour like bribes, while local politicians engage in favours for its voters to maintain its vote bank. Now China here took advantage of its authoritarian regime and created a system where a local official would rose in rank if his/her area would develop rapidly. So these local officials started bringing in foreign companies and technologies to their cities, establish factories and develop their cities. Gradually China deregulated its economy, increased its expenditure in R&D (from less than 0.6 per cent of GDP in 1996 to 2.14 per cent of GDP as per world bank) became a member of WTO, started manufacturing more high value-added products and used means like reverse engineering to catch up with latest technologies pretty quickly. Now, China has caught up with most of the latest technologies in most of the sectors, so this means the skills of workers increased and that translated in high wages of labour. This rise in labour cost is reducing the attraction for MNCs to establish themselves in China. Current geopolitical environment and negative feelings against China after pandemic are actually pushing companies away from China. Economic growth is important as it reduces the chances of social unrest. For this, China has to open up the economy and make it more competitive. However, that is difficult because China is a homogenous country and diversity brought in by globalisation makes it uncomfortable. At the same time, China still remembers a century of humiliation where different foreign powers conquered China again and again. So that also acts as hurdles in opening up. US-China conflict After World War II, the world was bipolar and two great powers the US and USSR existed. Then in 1990, USSR collapsed and America became global hegemon (Supreme Power). For many years China, on the other hand, remained low and continued developing itself without global ambitions. However, now China feels that it has developed enough and after 2008 crises it seems to be more convinced that it in the near future it would become a global superpower. Organski has stated in his power transition theory that hegemon state would try to prevent any challenger from rising and threatening its hegemony. This explains all the actions that the US takes against China, whether it’s a weaponising economic tool or attacking image and intentions of China. America also has a big advantage of soft power (Influencing through appeal and attraction rather than force). The American ethos of liberal ideas, making big on your own and pop culture resonate so deeply with the whole world that it became a symbol of the way ahead. This soft power is something that China is struggling with. Chinese actions in Hong Kong, the South China Sea, trapping countries by debts is portraying China as a bully. Currently, there is a higher mistrust against China in the world. So the US is taking various actions against China as that would not just harm the dragon but may also potentially increase the soft power of America. It’s because these actions will portray that the US punished China for its wrongdoings on behalf of the whole world. So China is trying to compensate by improving its technology. As it believes that this would not just help in growing economically but also in influencing people across the world. Huawei is like one of the flag bearers for China in this regard. That’s why the US is attacking the company so as to delay the technological advancement of China. China is also considered a system designer or some say a system re-designer. China feels that the current system is designed by the US to maintain its hegemony. So what’s the better time to redesign the system and stronghold its presence when the world is destabilised and in shock. That explains the aggressive actions of China recently. This shows that even Europe would become a battleground. After the world war, the US helped Europe by Marshall Plan which cemented their relations, but this time the US has in-fact imposed trade barriers on Europe and that is impacting relations negatively. Relations within Europe are also not on best terms. Brexit brought tensions between the UK and the European Union. Even members of the European Union are dealing with mistrust among them. So all this creates an opportunity for China to increase its influence in Europe at the expense of the US. Now China has done a lot of catch up effect. So, to keep growing rapidly, innovations in new technologies are a must. For that China needs to incentivise and deregulate its Universities and private companies a lot more. But highly deregulated universities and private companies have huge potential to challenge the authoritarian regime in China. If it won’t do that then economic growth may stagnate and that in itself will lead to revolt. So it seems that way ahead is pretty tough for China even domestically and in that case, the US may continue to enjoy its hegemony. However, China growth story is pretty unique and we can’t write it off that simply. So fasten your seatbelt and enjoy the ride. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Here's how geopolitical developments amid coronavirus crisis impact US and China

Israel knew the drill even before US Secretary of State Mike Pompeo boarded his flight to Tel Aviv earlier this month four days after the death of his father. It was Pompeo’s first and only overseas trip since March.

Echoing a US warning two decades ago that Israeli dealings with China jeopardised the country’s relationship with the United States, Pompeo’s trip solidified Israel’s position at the cusp of the widening US-Chinese divide.

Two decades ago the issue was the potential sale to China of Israeli Phalcon airborne warning and control systems (AWACS). Israel backed out of the deal after the US threatened withdrawal of American support for the Jewish state.

This month the immediate issue was a Chinese bid for construction of the world’s largest desalination plant and on the horizon a larger US-Chinese battle for a dominating presence in Eastern Mediterranean ports.

Within days of his visit, Pompeo scored a China-related success even if the main focus of his talks with Prime Minister Benyamin Netanyahu was believed to be Iran and Israeli plans to annex portions of the West Bank, occupied by Israel since 1967.

Israel signalled that it had heard the secretary’s message by awarding the contract for the Sorek-2 desalination plant to an Israeli rather than a Chinese company.

The tender, however, is only the tip of the iceberg.

China’s interest in Israel is strategic given the fact that the Jewish state is one of the world’s foremost commercial, food and security technology powerhouses and one of the few foreign countries to command significant grassroots support in the United States.

If there is one thing Israel cannot afford, it is a rupture in its bonds to the United States. That is no truer than at a time in which the United States is the only power supportive of Israeli annexation plans on the West Bank.

The question is whether Israel can develop a formula that convinces the United States that US interests will delineate Israeli dealings with China and reassure China that it can still benefit from Israeli assets within those boundaries.

“Right now, without taking the right steps, we are looking at being put in the situation in which the US is telling us we need to cut or limit our relations with China. The problem is that Israel wants freedom of relations with China but is not showing it really understands US concerns. Sorek-2 was a good result. It shows the Americans we get it." said Carice Witte, executive director of Sino-Israel Global Network and Academic Leadership (SIGNAL) that seeks to advance Israeli-Chinese relations.

Analysts, including Witte, believe that there is a silver lining in Israel’s refusal to award the desalination plant to a Chinese company that would allow it to steer a middle course between the United States and China.

“China understands that by giving the Americans this win, China-Israel relations can continue. It gives them breathing room,” Witte said in an interview.

It will, however, be up to Israel to develop criteria and policies that accommodate the United States and make clear to China what Israel can and cannot do.

“In order for Israel to have what it wants... it's going to need to show the Americans that it takes Washington's strategic perceptions into consideration and not only that, that it's two steps ahead on strategic thinking with respect to China. &nbsp;The question is how." Witte said.

Ports and technology are likely to be focal points.

China is set to next year takeover the management of Haifa port where it has already built its own pier and is constructing a new port in Ashdod.

One way of attempting to address US concerns would be to include technology companies in the purview of a still relatively toothless board created under US pressure in the wake of the Haifa deal to review foreign investment in Israel. It would build in a safeguard against giving China access to dual civilian-military use technology.

That, however, may not be enough to shield Israel against increased US pressure to reduce Chinese involvement in Israeli ports.

“The parallels between the desalination plant and the port are just too close to ignore. We can’t have another infrastructure divide,” Witte said.

The two Israeli ports will add to what is becoming a Chinese string of pearls in the Eastern Mediterranean.

China already manages the Greek port of Piraeus.

China Harbour Engineering Company Ltd (CHEC) is looking at upgrading Lebanon’s deep seaport of Tripoli to allow it to accommodate larger vessels.

Qingdao Haixi Heavy-Duty Machinery Co. has sold Tripoli port two 28-storey container cranes capable of lifting and transporting more than 700 containers a day, while a container vessel belonging to Chinese state-owned shipping company COSCO docked in Tripoli in December 2018, inaugurating a new maritime route between China and the Mediterranean.&nbsp;

Major Chinese construction companies are also looking at building a railroad that would connect Beirut and Tripoli in Lebanon to Homs and Aleppo in Syria. China has further suggested that Tripoli could become a special economic zone within the Belt and Road Initiative (BRI) and serve as an important trans-shipment point between the People’s Republic and Europe. &nbsp;&nbsp;

BRI is a massive infrastructure, telecommunications and energy-driven effort to connect the Eurasian landmass to China.

Potential Chinese involvement in the reconstruction of post-war Syria would likely give it access to the ports of Latakia and Tartous.

Taken together, China is looking at dominating the Eastern Mediterranean with six ports in four countries, Israel, Greece, Lebanon, and Syria that would create an alternative to the Suez Canal.

All that is missing are Turkish, Cypriot and Egyptian ports.

The Chinese build-up threatens to complicate US and NATO’s ability to manoeuvre in the region.

The Trump administration has already warned Israel that Chinese involvement in Haifa could jeopardize continued use of the port by the US fifth fleet.

“The writing is on the wall. Israel needs to carve out a degree of wiggle room. That, however, will only come at a price. There is little doubt that Haifa will move into the firing line,” said a long-time observer of Israeli-Chinese relations.

Israel knew the drill even before US Secretary of State Mike Pompeo boarded his flight to Tel Aviv earlier this month four days after the death of his father. It was Pompeo’s first and only overseas trip since March.

Israel knew the drill even before US Secretary of State Mike Pompeo boarded his flight to Tel Aviv earlier this month four days after the death of his father. It was Pompeo’s first and only overseas trip since March. Echoing a US warning two decades ago that Israeli dealings with China jeopardised the country’s relationship with the United States, Pompeo’s trip solidified Israel’s position at the cusp of the widening US-Chinese divide. Two decades ago the issue was the potential sale to China of Israeli Phalcon airborne warning and control systems (AWACS). Israel backed out of the deal after the US threatened withdrawal of American support for the Jewish state. This month the immediate issue was a Chinese bid for construction of the world’s largest desalination plant and on the horizon a larger US-Chinese battle for a dominating presence in Eastern Mediterranean ports. Within days of his visit, Pompeo scored a China-related success even if the main focus of his talks with Prime Minister Benyamin Netanyahu was believed to be Iran and Israeli plans to annex portions of the West Bank, occupied by Israel since 1967. Israel signalled that it had heard the secretary’s message by awarding the contract for the Sorek-2 desalination plant to an Israeli rather than a Chinese company. The tender, however, is only the tip of the iceberg. China’s interest in Israel is strategic given the fact that the Jewish state is one of the world’s foremost commercial, food and security technology powerhouses and one of the few foreign countries to command significant grassroots support in the United States. If there is one thing Israel cannot afford, it is a rupture in its bonds to the United States. That is no truer than at a time in which the United States is the only power supportive of Israeli annexation plans on the West Bank. The question is whether Israel can develop a formula that convinces the United States that US interests will delineate Israeli dealings with China and reassure China that it can still benefit from Israeli assets within those boundaries. “Right now, without taking the right steps, we are looking at being put in the situation in which the US is telling us we need to cut or limit our relations with China. The problem is that Israel wants freedom of relations with China but is not showing it really understands US concerns. Sorek-2 was a good result. It shows the Americans we get it." said Carice Witte, executive director of Sino-Israel Global Network and Academic Leadership (SIGNAL) that seeks to advance Israeli-Chinese relations. Analysts, including Witte, believe that there is a silver lining in Israel’s refusal to award the desalination plant to a Chinese company that would allow it to steer a middle course between the United States and China. “China understands that by giving the Americans this win, China-Israel relations can continue. It gives them breathing room,” Witte said in an interview. It will, however, be up to Israel to develop criteria and policies that accommodate the United States and make clear to China what Israel can and cannot do. “In order for Israel to have what it wants... it's going to need to show the Americans that it takes Washington's strategic perceptions into consideration and not only that, that it's two steps ahead on strategic thinking with respect to China. The question is how." Witte said. Ports and technology are likely to be focal points. China is set to next year takeover the management of Haifa port where it has already built its own pier and is constructing a new port in Ashdod. One way of attempting to address US concerns would be to include technology companies in the purview of a still relatively toothless board created under US pressure in the wake of the Haifa deal to review foreign investment in Israel. It would build in a safeguard against giving China access to dual civilian-military use technology. That, however, may not be enough to shield Israel against increased US pressure to reduce Chinese involvement in Israeli ports. “The parallels between the desalination plant and the port are just too close to ignore. We can’t have another infrastructure divide,” Witte said. The two Israeli ports will add to what is becoming a Chinese string of pearls in the Eastern Mediterranean. China already manages the Greek port of Piraeus. China Harbour Engineering Company Ltd (CHEC) is looking at upgrading Lebanon’s deep seaport of Tripoli to allow it to accommodate larger vessels. Qingdao Haixi Heavy-Duty Machinery Co. has sold Tripoli port two 28-storey container cranes capable of lifting and transporting more than 700 containers a day, while a container vessel belonging to Chinese state-owned shipping company COSCO docked in Tripoli in December 2018, inaugurating a new maritime route between China and the Mediterranean. Major Chinese construction companies are also looking at building a railroad that would connect Beirut and Tripoli in Lebanon to Homs and Aleppo in Syria. China has further suggested that Tripoli could become a special economic zone within the Belt and Road Initiative (BRI) and serve as an important trans-shipment point between the People’s Republic and Europe. BRI is a massive infrastructure, telecommunications and energy-driven effort to connect the Eurasian landmass to China. Potential Chinese involvement in the reconstruction of post-war Syria would likely give it access to the ports of Latakia and Tartous. Taken together, China is looking at dominating the Eastern Mediterranean with six ports in four countries, Israel, Greece, Lebanon, and Syria that would create an alternative to the Suez Canal. All that is missing are Turkish, Cypriot and Egyptian ports. The Chinese build-up threatens to complicate US and NATO’s ability to manoeuvre in the region. The Trump administration has already warned Israel that Chinese involvement in Haifa could jeopardize continued use of the port by the US fifth fleet. “The writing is on the wall. Israel needs to carve out a degree of wiggle room. That, however, will only come at a price. There is little doubt that Haifa will move into the firing line,” said a long-time observer of Israeli-Chinese relations.

Israel caught in the middle of intensifying rivalry between US and China

The economic fallout of the coronavirus pandemic for Gulf states has done far more than play havoc with their revenue base and fiscal household. It has propelled massive structural change to the top of their agenda in ways that economic diversification plans had not accounted for.

Leave aside whether Gulf states can continue to focus on high-profile, attention-grabbing projects like Neom, Saudi Arabia’s $500 billion&nbsp;21st century futuristic city on the Red Sea.

Gulf rulers’ to-do list, if they want to get things right, is long and expensive without the burden of trophy projects. It involves economic as well as social and ultimately political change.

Transparency and accurate and detailed public reporting go to the core of these changes.

They also are key to decisions by investors, economists, and credit rating companies at a time when Gulf states’ economic outlook is in question. Many complain that delays in GDP reporting and lack of easy access to statistics complicates their decision-making.

Nonetheless, if there is one thing autocratic Gulf governments have going for themselves, beyond substantial financial reserves, it is public confidence in the way they handled the pandemic, despite the fact that they failed to initially recognize crowded living circumstances of migrant workers as a super spreader.

Most governments acted early and decisively with lockdowns and curfews, testing, border closures, repatriation of nationals abroad, and, in Saudi Arabia, suspension of pilgrimages.

To be sure, Gulf countries, and particularly Saudi Arabia that receives millions of Muslim pilgrims from across the globe each year, have a long-standing history of dealing with epidemics. Like Singapore, South Korea, and Taiwan, they were better prepared than Western nations.

History persuaded the kingdom to ban the umrah, the lesser Muslim pilgrimage to Mecca, in late February, days before the first case of a COVID-19 infection emerged on Saudi soil.

Beyond public health concerns, Saudi Arabia had an additional reason to get the pandemic right. It offered the kingdom not only an opportunity to globally polish its image, badly tarnished by human rights abuses, power grabs, and the killing of journalist Jamal Khashoggi, but also to retain religious influence despite the interruption in the flow of pilgrims to the kingdom.

“Saudi Arabia is still a reference for many Muslim communities around the world,” said Yasmine Farouk, a scholar of Saudi Arabia at the Carnegie Endowment for International Peace.

It also allowed Saudi Arabia to set the record straight following criticism of its handling of the Middle East Respiratory Syndrome (MERS) in 2012 when the kingdom became the epidemic’s epicenter and in 2009 when it was hit by the H1N1 virus.

Saudi Arabia is also blamed for contributing to a public health catastrophe in Yemen with its frequent indiscriminate bombings.

A country in ruins as a result of the military intervention, Yemen has grappled for the past four years with a cholera epidemic on the kingdom’s borders.

Trust in Gulf states’ handling of the current pandemic was bolstered by degrees of transparency on the development of the disease in daily updates in the number of casualties and fatalities.

It was further boosted by a speech by King Salman as soon as the pandemic hit the kingdom in which he announced a raft of measures to counter the disease and support the economy as well as assurances by agriculture minister Abdulrahman al-Fadli that the crisis would not affect food supplies.

Farouk suggested that government instructions during the pandemic were followed because of “trust in the government, the expertise and the experience of the government [and] trust in the religious establishment, which actually was following the technical decisions of the government.”

To be sure, Farouk acknowledged, the regime’s coercive nature gave the public little choice.

The limits of government transparency were evident in the fact that authorities were less forthcoming with details of public spending on the pandemic and insight into available medical equipment like ventilators and other supplies such as testing kits.

Some Gulf states have started publishing the daily and total number of swabs but have yet to clarify whether these figures include multiple swabbings of the same person.

“It is likely that publics in the Middle East will look back at who was it that gave them reliable information, who was it who was there for them,” said political scientist Nathan Brown.

The question is whether governments will conclude that transparency will be needed to maintain public confidence as they are forced to rewrite social contracts that were rooted in concepts of a cradle-to-grave welfare state but will have to involve greater burden-sharing.

Gulf governments have so far said little about burden-sharing being allocated equitably across social classes nor has there been transparency on what drives investment decisions by sovereign wealth funds in a time of crisis and changing economic outlook.

Speaking to the Financial Times, a Gulf banker warned that the Saudi Crown Prince Mohammed bin Salman “needs to be careful what he spends on . . . Joe Public will be watching.”

Headed by Prince Mohammed, the kingdom’s sovereign wealth fund has gone on a $7.7 billion USD shopping spree buying stakes in major Western blue chips, including four oil majors: Boeing, Citigroup, Disney, and Facebook. The Public Investment Fund is also funding a bid for English soccer club Newcastle United.

The banker suggested that Saudi nationals would not appreciate “millionaire footballer salaries being paid for by VAT (value-added tax) on groceries.” He was referring to this month’s hiking of sales taxes in the kingdom from five to 15 per cent.

The fragility and fickleness of public trust were on display for the world to see in Britain’s uproar about Dominic Cummings, a close aide to Prime Minister Boris Johnson, who violated lockdown instructions for personal reasons. Johnson is struggling to fight off demands for Mr Cummings’ dismissal.

To be sure, senior government officials and business executives in the Gulf have cautioned of hard times to come.

A recent Dubai Chamber of Commerce and Industry survey of CEOs predicted that 70 per cent of the United Arab Emirates’ companies would go out of business in the next six months, including half of its restaurants and hotels and three-quarters of its travel and tourism companies.

Saudi Finance Minister Mohammed Al-Jadaan warned earlier this month that the kingdom would need to take “painful” measures and look for deep spending cuts as a result of the collapse of oil prices and significantly reduced demand for oil.

Aware of sensitivities, Al-Jadaan stressed that “as long as we do not touch the basic needs of the people, all options are open.”

There was little transparency in Al-Jadaan’s statements on what the impact would be on employment-seeking Saudi nationals in a labour market where fewer migrant workers would be available for jobs that Saudis have long been unwilling to accept.

It was a missed opportunity considering the 286 per cent increase in the number of Saudis flocking to work for delivery services.

The increase was fueled by an offer by Hadaf, the Saudi Human Resources Development Fund, to pay drivers $800&nbsp;a month, as well as a newly-found embrace of volunteerism across the Gulf.

The surge offered authorities building blocks to frame expectations at a time when the kingdom’s official unemployment rate of 12 per cent is likely to rise.

It suggested a public acknowledgement of the fact that well-paying, cushy government positions may no longer be as available as they were in the past as well as the fact that lesser jobs are no less honourable forms of employment.

That may be the silver lining as Gulf states feel the pressure to reinvent themselves in a world emerging from a pandemic that potentially will redraw social, economic, and political maps. 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp; 
&nbsp;

The economic fallout of the coronavirus pandemic for Gulf states has done far more than play havoc with their revenue base and fiscal household. It has propelled massive structural change to the top of their agenda in ways that economic diversification plans had not accounted for.

The economic fallout of the coronavirus pandemic for Gulf states has done far more than play havoc with their revenue base and fiscal household. It has propelled massive structural change to the top of their agenda in ways that economic diversification plans had not accounted for. Leave aside whether Gulf states can continue to focus on high-profile, attention-grabbing projects like Neom, Saudi Arabia’s $500 billion 21st century futuristic city on the Red Sea. Gulf rulers’ to-do list, if they want to get things right, is long and expensive without the burden of trophy projects. It involves economic as well as social and ultimately political change. Transparency and accurate and detailed public reporting go to the core of these changes. They also are key to decisions by investors, economists, and credit rating companies at a time when Gulf states’ economic outlook is in question. Many complain that delays in GDP reporting and lack of easy access to statistics complicates their decision-making. Nonetheless, if there is one thing autocratic Gulf governments have going for themselves, beyond substantial financial reserves, it is public confidence in the way they handled the pandemic, despite the fact that they failed to initially recognize crowded living circumstances of migrant workers as a super spreader. Most governments acted early and decisively with lockdowns and curfews, testing, border closures, repatriation of nationals abroad, and, in Saudi Arabia, suspension of pilgrimages. To be sure, Gulf countries, and particularly Saudi Arabia that receives millions of Muslim pilgrims from across the globe each year, have a long-standing history of dealing with epidemics. Like Singapore, South Korea, and Taiwan, they were better prepared than Western nations. History persuaded the kingdom to ban the umrah, the lesser Muslim pilgrimage to Mecca, in late February, days before the first case of a COVID-19 infection emerged on Saudi soil. Beyond public health concerns, Saudi Arabia had an additional reason to get the pandemic right. It offered the kingdom not only an opportunity to globally polish its image, badly tarnished by human rights abuses, power grabs, and the killing of journalist Jamal Khashoggi, but also to retain religious influence despite the interruption in the flow of pilgrims to the kingdom. “Saudi Arabia is still a reference for many Muslim communities around the world,” said Yasmine Farouk, a scholar of Saudi Arabia at the Carnegie Endowment for International Peace. It also allowed Saudi Arabia to set the record straight following criticism of its handling of the Middle East Respiratory Syndrome (MERS) in 2012 when the kingdom became the epidemic’s epicenter and in 2009 when it was hit by the H1N1 virus. Saudi Arabia is also blamed for contributing to a public health catastrophe in Yemen with its frequent indiscriminate bombings. A country in ruins as a result of the military intervention, Yemen has grappled for the past four years with a cholera epidemic on the kingdom’s borders. Trust in Gulf states’ handling of the current pandemic was bolstered by degrees of transparency on the development of the disease in daily updates in the number of casualties and fatalities. It was further boosted by a speech by King Salman as soon as the pandemic hit the kingdom in which he announced a raft of measures to counter the disease and support the economy as well as assurances by agriculture minister Abdulrahman al-Fadli that the crisis would not affect food supplies. Farouk suggested that government instructions during the pandemic were followed because of “trust in the government, the expertise and the experience of the government [and] trust in the religious establishment, which actually was following the technical decisions of the government.” To be sure, Farouk acknowledged, the regime’s coercive nature gave the public little choice. The limits of government transparency were evident in the fact that authorities were less forthcoming with details of public spending on the pandemic and insight into available medical equipment like ventilators and other supplies such as testing kits. Some Gulf states have started publishing the daily and total number of swabs but have yet to clarify whether these figures include multiple swabbings of the same person. “It is likely that publics in the Middle East will look back at who was it that gave them reliable information, who was it who was there for them,” said political scientist Nathan Brown. The question is whether governments will conclude that transparency will be needed to maintain public confidence as they are forced to rewrite social contracts that were rooted in concepts of a cradle-to-grave welfare state but will have to involve greater burden-sharing. Gulf governments have so far said little about burden-sharing being allocated equitably across social classes nor has there been transparency on what drives investment decisions by sovereign wealth funds in a time of crisis and changing economic outlook. Speaking to the Financial Times, a Gulf banker warned that the Saudi Crown Prince Mohammed bin Salman “needs to be careful what he spends on . . . Joe Public will be watching.” Headed by Prince Mohammed, the kingdom’s sovereign wealth fund has gone on a $7.7 billion USD shopping spree buying stakes in major Western blue chips, including four oil majors: Boeing, Citigroup, Disney, and Facebook. The Public Investment Fund is also funding a bid for English soccer club Newcastle United. The banker suggested that Saudi nationals would not appreciate “millionaire footballer salaries being paid for by VAT (value-added tax) on groceries.” He was referring to this month’s hiking of sales taxes in the kingdom from five to 15 per cent. The fragility and fickleness of public trust were on display for the world to see in Britain’s uproar about Dominic Cummings, a close aide to Prime Minister Boris Johnson, who violated lockdown instructions for personal reasons. Johnson is struggling to fight off demands for Mr Cummings’ dismissal. To be sure, senior government officials and business executives in the Gulf have cautioned of hard times to come. A recent Dubai Chamber of Commerce and Industry survey of CEOs predicted that 70 per cent of the United Arab Emirates’ companies would go out of business in the next six months, including half of its restaurants and hotels and three-quarters of its travel and tourism companies. Saudi Finance Minister Mohammed Al-Jadaan warned earlier this month that the kingdom would need to take “painful” measures and look for deep spending cuts as a result of the collapse of oil prices and significantly reduced demand for oil. Aware of sensitivities, Al-Jadaan stressed that “as long as we do not touch the basic needs of the people, all options are open.” There was little transparency in Al-Jadaan’s statements on what the impact would be on employment-seeking Saudi nationals in a labour market where fewer migrant workers would be available for jobs that Saudis have long been unwilling to accept. It was a missed opportunity considering the 286 per cent increase in the number of Saudis flocking to work for delivery services. The increase was fueled by an offer by Hadaf, the Saudi Human Resources Development Fund, to pay drivers $800 a month, as well as a newly-found embrace of volunteerism across the Gulf. The surge offered authorities building blocks to frame expectations at a time when the kingdom’s official unemployment rate of 12 per cent is likely to rise. It suggested a public acknowledgement of the fact that well-paying, cushy government positions may no longer be as available as they were in the past as well as the fact that lesser jobs are no less honourable forms of employment. That may be the silver lining as Gulf states feel the pressure to reinvent themselves in a world emerging from a pandemic that potentially will redraw social, economic, and political maps. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Lessons Gulf states have learned from coronavirus pandemic

In an era that is to be defined by 4th Industrial Revolution where Artificial Intelligence, Big Data and Internet of Things are increasingly expected to play major roles, having the advantage over 5G technology is likely to be a key determinant of an upcoming great power rivalry.&nbsp;

However, geopolitical developments during the ongoing COVID-19 pandemic is likely to either dampen or delay China's grand global 5G strategy that is also critical to Beijing’s Digital Silk Road plans. The relatively small group of nations led by the United States (US) that acted against Chinese plans in the pre-COVID period may expand as increasingly more nations are concerned about Beijing’s reliability due to its behaviour — involves accountability, responsibility and propaganda — during the current pandemic. &nbsp;

Gaining technological supremacy has been one of the key features of geopolitical rivalries in modern history, and it is no different for the ongoing US-China rivalry. Realising this, President Donald Trump has waged a global campaign against Huawei — main Chinese 5G player, other one is ZTE — since the last couple of years alleging China of 5G technology-related intellectual property theft and raised national security issues due to espionage-related concerns. Consequently, to limit Huawei’s capacity to provide 5G equipment, specifically at affordable rates, in the US and beyond, the Trump administration has announced several measures against Huawei, including the most recent one during the pandemic that restricts “Huawei’s ability to use US technology and software to design and manufacture its semiconductors abroad” as the US alleged Huawei of undermining its export control measures. &nbsp;

The US government has used rising anti-China sentiments during the pandemic domestically and externally to its advantage and imposed new restrictions. This new measure by the US is likely to impact Huawei’s R&amp;D work and raise its business costs substantially as chipmakers are not allowed to supply chips to Chinese company if they are based on the American technology; moreover, there are no Chinese technological alternatives at present. The measure will also impact the companies that are associated with Huawei components across the world, including the EU, thereby, damaging Huawei’s main international sales pitch, affordability. This action has attracted so much attention that the Chinese government has threatened to retaliate against American companies that have a big presence in China if the US continues with any such further measures. &nbsp;

While the Trump administration has been maintaining the consistent act against Huawei domestically, it has also been persuading its partners across the globe to ban Huawei in gaining access to their respective telecommunication networks. Some of its allies like Japan, Australia and New Zealand have gone forward with the US plans in banning Huawei, some like Canada and the European Union (EU) were still under discussion before the pandemic. EU member states were divided over the issue as China holds influence over several nations of the Union. Further, in disappointment to the US before the pandemic, the United Kingdom (UK) reluctantly provided limited access to Huawei some months ago. &nbsp;

Nonetheless, as the questions against China arise over its accountability towards the virus origins, reliability over the supply chains dependence and propaganda through global media blitzkrieg, the anti-Chinese lobby in the UK seems to have lapped up the opportunity to convince Boris Johnson administration to act against Huawei as British media suggests. The Financial Times last week reported that the UK government is making plans “to force a full phase-out of Huawei from Britain’s 5G networks” in the next three years. This is a strong shift in the UK’s approach towards Huawei in just a few months. &nbsp;

In the last week of January 2020, the European Commission recommended strict rules, instead of an outright ban, against any high-risk 5G suppliers including “exclusions for key assets considered as critical and sensitive”, and “strategies… to ensure the diversification of vendors”. Similarly, in February 2020, German ruling party’s members supported a position paper that called for limiting the participation of foreign vendors in 5G network rollout in a compromise as an anti-Chinese group among the Christian Democratic Union (CDU) have been piling up pressure on the Merkel administration for an outright ban of Huawei. Further, CDU’s coalition partner, Social Democratic Party, is asking for equipment suppliers’ political reliability vis-à-vis their home countries' governing system, which can dampen chances of companies like Huawei when the draft bill that asks for additional requirements from 5G network suppliers will face the parliamentary test. Handelsblatt has reported that Deutsch Telekom and Vodafone are already considering to remove Huawei equipment from the sensitive core of their networks considering domestic political preferences and rising business costs due to the US actions.&nbsp;

While these suggestions do not call for an outright ban as the US would have liked, they nonetheless are in favour of more stringent regulatory regime against the foreign vendors like Huawei. Moreover, it should come as no surprise if local EU 5G players like Nokia and Ericsson are prioritised over the foreign ones by EU member states as the industrial strategy under the new French-German COVID-19 recovery plan suggests. The French-German deal calls for strengthening “screening towards non-EU investors in strategic sectors”, and “accelerating the adaptation of state aid and competition rules” in the European competition policy. &nbsp;

Further, in sort of a policy priority, Josep Borrell Fontelles, High Representative of the EU for Foreign Affairs and Security Policy, recently in a column that was published in several media outlets suggested that the state-centric Chinese approach stands opposite to the “the EU’s multi-stakeholder approach based on respect for fundamental rights and freedoms” in the cyber domain; also, he called for avoiding dependence on China in strategic sectors. These developments suggest that Huawei’s access to most of the OECD market is likely to get restricted, which would limit China’s ambitions both politically and economically. &nbsp;

ASEAN is one region where Huawei is likely to have better run among high-value markets, except in Vietnam. While Vietnam has not banned Huawei, it claims to have developed native 5G tech through Viettel, Vietnam’s largest telecommunications company operated by the country’s defence ministry, which experts suggest provides an incentive to bypass China’s Huawei. The company has suggested that it doesn’t have plans to work with Huawei for now. The situation isn’t likely to change much as China ramps up the aggression in the South China Sea. Also, other major emerging economies like Brazil and India are yet to take a call in this regard. &nbsp;

India was one of the early countries to raise espionage-related concerns over Huawei almost a decade ago. While the government has allowed Huawei for trials, it is facing ambiguity over the issue as the country’s strategic community is seriously worried about national security issues. The situation is only likely to get tight due to ongoing border skirmishes at India-China border and also the Indian government’s plans to bring strong data protection law, which talks about localising data. &nbsp;

Moreover, there have been a couple of interesting developments over Indian 5G in the recent past. First, Airtel, which have an advocate of Huawei, has inked a $1 billion deal with Nokia — as uncertainty over Huawei’s access prevails — to modernise and expand its 4G network, which will also be used for the future 5G purposes. Second, Reliance Jio, currently India’s largest telecommunications company, claimed to have developed own in-house 5G tech. Also, Jio has proudly claimed that it is the only company in the world that doesn’t use any Chinese equipment in its 4G and 5G networks and will maintain this going forward. &nbsp;

All these events suggest the growing hardship for Chinese 5G plans across the world as it faces the campaign led by the US. As the geopolitics during the pandemic unravels, one should not expect the situation to get any better for Huawei; especially when China has ramped up the military aggression in the East China Sea, South China Sea, Taiwan Strait, Hong Kong and India-China border region. The international community — especially stakeholders at the receiving end of the Chinese aggression and the West that cares for international norms and human rights — is not likely to ease its stance anytime soon if the pandemic hostility prevails. &nbsp;

&nbsp; 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp;

In an era that is to be defined by 4th Industrial Revolution where Artificial Intelligence, Big Data and Internet of Things are increasingly expected to play major roles, having the advantage over 5G technology is likely to be a key determinant of an upcoming great power rivalry.

In an era that is to be defined by 4th Industrial Revolution where Artificial Intelligence, Big Data and Internet of Things are increasingly expected to play major roles, having the advantage over 5G technology is likely to be a key determinant of an upcoming great power rivalry. However, geopolitical developments during the ongoing COVID-19 pandemic is likely to either dampen or delay China's grand global 5G strategy that is also critical to Beijing’s Digital Silk Road plans. The relatively small group of nations led by the United States (US) that acted against Chinese plans in the pre-COVID period may expand as increasingly more nations are concerned about Beijing’s reliability due to its behaviour — involves accountability, responsibility and propaganda — during the current pandemic. Gaining technological supremacy has been one of the key features of geopolitical rivalries in modern history, and it is no different for the ongoing US-China rivalry. Realising this, President Donald Trump has waged a global campaign against Huawei — main Chinese 5G player, other one is ZTE — since the last couple of years alleging China of 5G technology-related intellectual property theft and raised national security issues due to espionage-related concerns. Consequently, to limit Huawei’s capacity to provide 5G equipment, specifically at affordable rates, in the US and beyond, the Trump administration has announced several measures against Huawei, including the most recent one during the pandemic that restricts “Huawei’s ability to use US technology and software to design and manufacture its semiconductors abroad” as the US alleged Huawei of undermining its export control measures. The US government has used rising anti-China sentiments during the pandemic domestically and externally to its advantage and imposed new restrictions. This new measure by the US is likely to impact Huawei’s R&D work and raise its business costs substantially as chipmakers are not allowed to supply chips to Chinese company if they are based on the American technology; moreover, there are no Chinese technological alternatives at present. The measure will also impact the companies that are associated with Huawei components across the world, including the EU, thereby, damaging Huawei’s main international sales pitch, affordability. This action has attracted so much attention that the Chinese government has threatened to retaliate against American companies that have a big presence in China if the US continues with any such further measures. While the Trump administration has been maintaining the consistent act against Huawei domestically, it has also been persuading its partners across the globe to ban Huawei in gaining access to their respective telecommunication networks. Some of its allies like Japan, Australia and New Zealand have gone forward with the US plans in banning Huawei, some like Canada and the European Union (EU) were still under discussion before the pandemic. EU member states were divided over the issue as China holds influence over several nations of the Union. Further, in disappointment to the US before the pandemic, the United Kingdom (UK) reluctantly provided limited access to Huawei some months ago. Nonetheless, as the questions against China arise over its accountability towards the virus origins, reliability over the supply chains dependence and propaganda through global media blitzkrieg, the anti-Chinese lobby in the UK seems to have lapped up the opportunity to convince Boris Johnson administration to act against Huawei as British media suggests. The Financial Times last week reported that the UK government is making plans “to force a full phase-out of Huawei from Britain’s 5G networks” in the next three years. This is a strong shift in the UK’s approach towards Huawei in just a few months. In the last week of January 2020, the European Commission recommended strict rules, instead of an outright ban, against any high-risk 5G suppliers including “exclusions for key assets considered as critical and sensitive”, and “strategies… to ensure the diversification of vendors”. Similarly, in February 2020, German ruling party’s members supported a position paper that called for limiting the participation of foreign vendors in 5G network rollout in a compromise as an anti-Chinese group among the Christian Democratic Union (CDU) have been piling up pressure on the Merkel administration for an outright ban of Huawei. Further, CDU’s coalition partner, Social Democratic Party, is asking for equipment suppliers’ political reliability vis-à-vis their home countries' governing system, which can dampen chances of companies like Huawei when the draft bill that asks for additional requirements from 5G network suppliers will face the parliamentary test. Handelsblatt has reported that Deutsch Telekom and Vodafone are already considering to remove Huawei equipment from the sensitive core of their networks considering domestic political preferences and rising business costs due to the US actions. While these suggestions do not call for an outright ban as the US would have liked, they nonetheless are in favour of more stringent regulatory regime against the foreign vendors like Huawei. Moreover, it should come as no surprise if local EU 5G players like Nokia and Ericsson are prioritised over the foreign ones by EU member states as the industrial strategy under the new French-German COVID-19 recovery plan suggests. The French-German deal calls for strengthening “screening towards non-EU investors in strategic sectors”, and “accelerating the adaptation of state aid and competition rules” in the European competition policy. Further, in sort of a policy priority, Josep Borrell Fontelles, High Representative of the EU for Foreign Affairs and Security Policy, recently in a column that was published in several media outlets suggested that the state-centric Chinese approach stands opposite to the “the EU’s multi-stakeholder approach based on respect for fundamental rights and freedoms” in the cyber domain; also, he called for avoiding dependence on China in strategic sectors. These developments suggest that Huawei’s access to most of the OECD market is likely to get restricted, which would limit China’s ambitions both politically and economically. ASEAN is one region where Huawei is likely to have better run among high-value markets, except in Vietnam. While Vietnam has not banned Huawei, it claims to have developed native 5G tech through Viettel, Vietnam’s largest telecommunications company operated by the country’s defence ministry, which experts suggest provides an incentive to bypass China’s Huawei. The company has suggested that it doesn’t have plans to work with Huawei for now. The situation isn’t likely to change much as China ramps up the aggression in the South China Sea. Also, other major emerging economies like Brazil and India are yet to take a call in this regard. India was one of the early countries to raise espionage-related concerns over Huawei almost a decade ago. While the government has allowed Huawei for trials, it is facing ambiguity over the issue as the country’s strategic community is seriously worried about national security issues. The situation is only likely to get tight due to ongoing border skirmishes at India-China border and also the Indian government’s plans to bring strong data protection law, which talks about localising data. Moreover, there have been a couple of interesting developments over Indian 5G in the recent past. First, Airtel, which have an advocate of Huawei, has inked a $1 billion deal with Nokia — as uncertainty over Huawei’s access prevails — to modernise and expand its 4G network, which will also be used for the future 5G purposes. Second, Reliance Jio, currently India’s largest telecommunications company, claimed to have developed own in-house 5G tech. Also, Jio has proudly claimed that it is the only company in the world that doesn’t use any Chinese equipment in its 4G and 5G networks and will maintain this going forward. All these events suggest the growing hardship for Chinese 5G plans across the world as it faces the campaign led by the US. As the geopolitics during the pandemic unravels, one should not expect the situation to get any better for Huawei; especially when China has ramped up the military aggression in the East China Sea, South China Sea, Taiwan Strait, Hong Kong and India-China border region. The international community — especially stakeholders at the receiving end of the Chinese aggression and the West that cares for international norms and human rights — is not likely to ease its stance anytime soon if the pandemic hostility prevails. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Coronavirus impact: Geopolitical developments deepen China’s global 5G woes

<a href="https://www.wionews.com/world/trump-says-us-will-react-strongly-if-china-imposes-new-hong-kong-security-law-300276" hreflang="en">Trump says US will 'react strongly' if China imposes new Hong Kong security law</a>

<img alt="Donald Trump" data-entity-type="file" data-entity-uuid="0c0e6b9f-00c1-4fab-9e60-149d46a99c44" src="//cdn.wionews.com/sites/default/files/inline-images/Untitled%20design%20%2872%29_2.jpg" />

US&nbsp;President Donald Trump said on Thursday the United States would react strongly if China follows through on plans to impose new national security legislation on&nbsp;Hong&nbsp;Kong&nbsp;after last year's often violent pro-democracy unrest. <a href="https://www.wionews.com/world/trump-says-us-will-react-strongly-if-china-imposes-new-hong-kong-security-law-300276">Read more</a>

<a href="https://www.wionews.com/world/china-pushes-forward-controversial-security-law-in-hong-kong-after-unrest-300278" hreflang="en">China pushes forward controversial security law in Hong Kong after unrest</a>

<img alt="Xi Jinping" data-entity-type="file" data-entity-uuid="f5e332ab-fbdc-49f1-b8c7-99bc4f2d48d1" src="//cdn.wionews.com/sites/default/files/inline-images/138728-xi-jinping.jpg" />

A proposal to enact the highly controversial&nbsp;Hong Kong security legislation was submitted to China's rubber-stamp on Friday, according to the state media. <a href="https://www.wionews.com/world/china-pushes-forward-controversial-security-law-in-hong-kong-after-unrest-300278">Read more</a>

<a href="https://www.wionews.com/world/forgive-those-who-killed-our-father-sons-of-killed-saudi-journalist-jamal-khashoggi-300279" hreflang="en">'Forgive those who killed our father': Sons of killed Saudi journalist Jamal Khashoggi</a>

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The sons of murdered Saudi journalist Jamal Khashoggi said Friday that they "forgive" the killers of their father. <a href="https://www.wionews.com/world/forgive-those-who-killed-our-father-sons-of-killed-saudi-journalist-jamal-khashoggi-300279">Read more</a>

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Trump says US will 'react strongly' if China imposes new Hong Kong security law US President Donald Trump said on Thursday the United States would react strongly if China follows through on plans to impose new national security legislation on Hong Kong after last year's often violent pro-democracy unrest.

Trump says US will 'react strongly' if China imposes new Hong Kong security law US President Donald Trump said on Thursday the United States would react strongly if China follows through on plans to impose new national security legislation on Hong Kong after last year's often violent pro-democracy unrest. Read more China pushes forward controversial security law in Hong Kong after unrest A proposal to enact the highly controversial Hong Kong security legislation was submitted to China's rubber-stamp on Friday, according to the state media. Read more 'Forgive those who killed our father': Sons of killed Saudi journalist Jamal Khashoggi The sons of murdered Saudi journalist Jamal Khashoggi said Friday that they "forgive" the killers of their father. Read more

Morning news brief: Trump warns China, Hong Kong security law and more

US&nbsp;President Donald Trump said on Thursday the United States would react strongly if China follows through on plans to impose new national security legislation on&nbsp;Hong&nbsp;Kong&nbsp;after last year's often violent pro-democracy unrest.

The remarks, made by the President to reporters before leaving the White House, come hours after a Chinese official said the National People's Congress is exercising its "constitutional power” to set up a new legal framework and enforcement mechanism to ensure national security in&nbsp;Hong&nbsp;Kong.

Also read:&nbsp;<a href="https://www.wionews.com/world/mike-pompeo-warns-china-over-interference-with-american-journalists-in-hong-kong-threatens-hks-autonomy-status-299341">Mike Pompeo warns China over interference with American journalists in Hong Kong; threatens HK's autonomy status</a>

The move by China's rubber stamp parliament, the&nbsp;National People's Congress (NPC), which is meeting in Beijing this week, is sure to fuel further anger and protests in the city, which was rocked by over six months of increasingly violent anti-government unrest last year.

The law, which is expected to ban sedition, secession and subversion of the central government in Beijing, will be introduced through a rarely used constitutional method that could effectively bypass Hong Kong's legislature.

US had previously&nbsp;issued&nbsp;warning to Beijing as the law, which could enable crackdowns on anti-government protests, is blasted&nbsp;as the 'end' of Hong Kong as it&nbsp;could be the biggest blow to the city's autonomy and civil liberties since its handover to Chinese rule in 1997.

US President Donald Trump said on Thursday the United States would react strongly if China follows through on plans to impose new national security legislation on Hong Kong after last year's often violent pro-democracy unrest.

US President Donald Trump said on Thursday the United States would react strongly if China follows through on plans to impose new national security legislation on Hong Kong after last year's often violent pro-democracy unrest. The remarks, made by the President to reporters before leaving the White House, come hours after a Chinese official said the National People's Congress is exercising its "constitutional power” to set up a new legal framework and enforcement mechanism to ensure national security in Hong Kong. Also read: Mike Pompeo warns China over interference with American journalists in Hong Kong; threatens HK's autonomy status The move by China's rubber stamp parliament, the National People's Congress (NPC), which is meeting in Beijing this week, is sure to fuel further anger and protests in the city, which was rocked by over six months of increasingly violent anti-government unrest last year. The law, which is expected to ban sedition, secession and subversion of the central government in Beijing, will be introduced through a rarely used constitutional method that could effectively bypass Hong Kong's legislature. US had previously issued warning to Beijing as the law, which could enable crackdowns on anti-government protests, is blasted as the 'end' of Hong Kong as it could be the biggest blow to the city's autonomy and civil liberties since its handover to Chinese rule in 1997.

Trump says US will 'react strongly' if China imposes new Hong Kong security law

Taiwan has stayed firm in front of China by refusing to accept the "one country, two systems" model and it does not want to bow before Beijing's will.

<a href="https://www.wionews.com/world/in-inaugural-speech-after-re-election-taiwan-president-challenges-china-299994">Also Read:&nbsp;In inaugural speech after re-election, Taiwan President challenges China</a>

Taiwan still wants the observer status at the World Health Organisation(WHO) and has been pushing for it aggressively. It wanted to attend the World Health Assembly but, its campaign came to a grinding halt.

The World Health Assembly concluded on Tuesday. It went on for two days as leaders from around the world made speeches. There was even a resolution for a probe into the response.

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But Taiwan was kept out. In fact, the demand for an observer status to Taiwan was not even part of the agenda. Before the World Health Assembly, the world was singing Taiwan's praises. It's response to the coronavirus is among the world's best. The argument was that Taiwan's example could help the rest of the world.

However, the question is what derailed Taiwan's campaign? The United States was leading the effort trying to convince allies to support Taiwan.

After the failed bid, US secretary of state Mike Pompeo blamed it on politics. He issued a statement criticising the World Health Organisation. Pompeo blamed WHO director general Dr Tedros. In a statement, he said that Dr Tedros has the power, and the precedent to include Taiwan. Clearly, the support that Taiwan needed wasn't there.

The United States admitted it during the World Health Assembly. The statement was made by an American diplomat rebutting China. He was responding to the Chinese ambassador to the United Nations who had earlier objected to America's statement of support to Taiwan.

Both the United States and China were sparring on Taiwan till the end of the assembly. Taiwan's status disrupted the most important meeting on public health. The World Health Assembly did not have much to offer this time except for that one resolution demanding for a probe into the COVID-19 global response.&nbsp;

However, irrespective of the lack of diplomatic support, Taiwan will emerged stronger out of the pandemic. China may have managed to ward off the Taiwan threat for now but, Taiwan is not out of the picture, just yet.

Taiwan has stayed firm in front of China by refusing to accept the "one country, two systems" model and it does not want to bow before Beijing's will. Also Read: In inaugural speech after re-election, Taiwan President challenges China Taiwan still wants the observer status at the World Health Organisation(WHO) and has been pushing for it aggressively.

Taiwan has stayed firm in front of China by refusing to accept the "one country, two systems" model and it does not want to bow before Beijing's will. Also Read: In inaugural speech after re-election, Taiwan President challenges China Taiwan still wants the observer status at the World Health Organisation(WHO) and has been pushing for it aggressively. It wanted to attend the World Health Assembly but, its campaign came to a grinding halt. The World Health Assembly concluded on Tuesday. It went on for two days as leaders from around the world made speeches. There was even a resolution for a probe into the response. But Taiwan was kept out. In fact, the demand for an observer status to Taiwan was not even part of the agenda. Before the World Health Assembly, the world was singing Taiwan's praises. It's response to the coronavirus is among the world's best. The argument was that Taiwan's example could help the rest of the world. However, the question is what derailed Taiwan's campaign? The United States was leading the effort trying to convince allies to support Taiwan. After the failed bid, US secretary of state Mike Pompeo blamed it on politics. He issued a statement criticising the World Health Organisation. Pompeo blamed WHO director general Dr Tedros. In a statement, he said that Dr Tedros has the power, and the precedent to include Taiwan. Clearly, the support that Taiwan needed wasn't there. The United States admitted it during the World Health Assembly. The statement was made by an American diplomat rebutting China. He was responding to the Chinese ambassador to the United Nations who had earlier objected to America's statement of support to Taiwan. Both the United States and China were sparring on Taiwan till the end of the assembly. Taiwan's status disrupted the most important meeting on public health. The World Health Assembly did not have much to offer this time except for that one resolution demanding for a probe into the COVID-19 global response. However, irrespective of the lack of diplomatic support, Taiwan will emerged stronger out of the pandemic. China may have managed to ward off the Taiwan threat for now but, Taiwan is not out of the picture, just yet.

US, China spar over Taiwan at World Health Assembly

The United States is developing&nbsp;a ''super duper missile''&nbsp;to outpace military rivals including China and Russia, according to US President Donald Trump.

Unveiling the flag for&nbsp;his new&nbsp;space&nbsp;force&nbsp;in the Oval Office&nbsp;on Friday, Trump touted that the US&nbsp;is ''right now building incredible military equipment,''&nbsp;including a missile that&nbsp;is ''17 times faster'' than his adversaries.

Russian President Vladimir Putin has claimed his country has already developed and fielded a hypersonic nuclear missile ahead of the US&nbsp;The Pentagon has been working on the technology.

According to Russian state media, Putin has said his Avangard missiles can ''travel at up to 20 times the speed of sound, like a 'meteorite'&nbsp;or a 'fireball'.''

Later Friday, Jonathan Rath Hoffman, a Pentagon spokesman, tweeted that “the Department of Defense is working on developing a range of hypersonic missiles to counter our adversaries.”

''Not a single country possesses hypersonic weapons, let alone continental-range hypersonic weapons,''&nbsp;Putin told military chiefs in December.

Last December, Trump signed into law a measure to create the Space Force, saying the US&nbsp;needed to expand its military presence in space. The Air Force previously oversaw offensive and defensive operations in space.

The United States is developing a ''super duper missile'' to outpace military rivals including China and Russia, according to US President Donald Trump. Unveiling the flag for his new space force in the Oval Office on Friday, Trump touted that the US is ''right now building incredible military equipment,'' including a missile that is ''17 times faster'' than his adversaries.

The United States is developing a ''super duper missile'' to outpace military rivals including China and Russia, according to US President Donald Trump. Unveiling the flag for his new space force in the Oval Office on Friday, Trump touted that the US is ''right now building incredible military equipment,'' including a missile that is ''17 times faster'' than his adversaries. Russian President Vladimir Putin has claimed his country has already developed and fielded a hypersonic nuclear missile ahead of the US The Pentagon has been working on the technology. According to Russian state media, Putin has said his Avangard missiles can ''travel at up to 20 times the speed of sound, like a 'meteorite' or a 'fireball'.'' Later Friday, Jonathan Rath Hoffman, a Pentagon spokesman, tweeted that “the Department of Defense is working on developing a range of hypersonic missiles to counter our adversaries.” ''Not a single country possesses hypersonic weapons, let alone continental-range hypersonic weapons,'' Putin told military chiefs in December. Last December, Trump signed into law a measure to create the Space Force, saying the US needed to expand its military presence in space. The Air Force previously oversaw offensive and defensive operations in space.

US to defeat China and Russia with 'super duper missile'

It is the advent of Cold War 2.0 with America and its allies on one side and on the other&nbsp;China and Russia involving suspicion, hostility, and aggression including&nbsp;military muscle-flexing without exchanging fire.

It is has been happening as standard characteristics of the Cold War which played out from 1945 to the end of the 1980s.

Now, America is taking on China&nbsp;and recruiting allies. US ally Australia is effectively edging towards a break-up with China with trade ties being disrupted even though China is Australia's biggest export market.

China makes up 30 per cent of Australia's exports which is close to 7 per cent of its GDP. Chinese students and tourists bring big money to Australia. China has been leveraging everything. It has now blocked beef and barley imports from Australia after PM Scott Morrison demanded an investigation into the coronavirus outbreak.&nbsp;

However, Australia remains firm&nbsp;and hasn't backed down. Then there is Japan upping the ante. Japan's chief cabinet secretary has spoken about the Uighurs in China.

Yoshi-hide Suga while addressing the press was asked a question about the Uighurs, the Japanese leader said Tokyo is watching China closely. Japan is also working overtime to pull its businesses out of China.

President Trump may be famous for his U-turns but for days now&nbsp;he's been taking on China openly. On Thursday, during an interview&nbsp;the US president threatened to kill America's diplomatic relationship with China. Trump blamed the Chinese government for spreading the virus and said he doesn't want to speak to President Xi Jinping.

China foreign ministry spokesman Zhao Lijian gave a measured response but he seemed to lose his cool when Taiwan was mentioned with hostility evident.

Recently, US secretary Mike Pompeo held a video conference with foreign ministers of seven countries. The idea was to get them on board against China. India's external minister S Jaishankar was part of the digitial meeting. Israel and South Korea were among the other participants.

Reports say the conversation lasted 75 minutes with the US focus on making China pay by restructuring supply chains and dent China's domination over world trade. The confrontation could escalate on Monday when WHO members meet for the world health assembly, not in person, but on video conference, thanks to the Wuhan virus.

It is the advent of Cold War 2.0 with America and its allies on one side and on the other China and Russia involving suspicion, hostility, and aggression including military muscle-flexing without exchanging fire.

It is the advent of Cold War 2.0 with America and its allies on one side and on the other China and Russia involving suspicion, hostility, and aggression including military muscle-flexing without exchanging fire. It is has been happening as standard characteristics of the Cold War which played out from 1945 to the end of the 1980s. Now, America is taking on China and recruiting allies. US ally Australia is effectively edging towards a break-up with China with trade ties being disrupted even though China is Australia's biggest export market. China makes up 30 per cent of Australia's exports which is close to 7 per cent of its GDP. Chinese students and tourists bring big money to Australia. China has been leveraging everything. It has now blocked beef and barley imports from Australia after PM Scott Morrison demanded an investigation into the coronavirus outbreak. However, Australia remains firm and hasn't backed down. Then there is Japan upping the ante. Japan's chief cabinet secretary has spoken about the Uighurs in China. Yoshi-hide Suga while addressing the press was asked a question about the Uighurs, the Japanese leader said Tokyo is watching China closely. Japan is also working overtime to pull its businesses out of China. President Trump may be famous for his U-turns but for days now he's been taking on China openly. On Thursday, during an interview the US president threatened to kill America's diplomatic relationship with China. Trump blamed the Chinese government for spreading the virus and said he doesn't want to speak to President Xi Jinping. China foreign ministry spokesman Zhao Lijian gave a measured response but he seemed to lose his cool when Taiwan was mentioned with hostility evident. Recently, US secretary Mike Pompeo held a video conference with foreign ministers of seven countries. The idea was to get them on board against China. India's external minister S Jaishankar was part of the digitial meeting. Israel and South Korea were among the other participants. Reports say the conversation lasted 75 minutes with the US focus on making China pay by restructuring supply chains and dent China's domination over world trade. The confrontation could escalate on Monday when WHO members meet for the world health assembly, not in person, but on video conference, thanks to the Wuhan virus.

Cold War 2.0: US and its allies tussle against China, Russia

The United States is pressuring its allies and trying to coerce other countries to help it plant accusations against China on issues concerning COVID-19 responsibility, said a spokeswoman for China's Ministry of Foreign Affairs on Wednesday.

Hua Chunying said that some US&nbsp;media reported the United States is pressuring its European allies to stand with it on pandemic responsibility and also&nbsp;to&nbsp;plant accusations against China.

Also read:&nbsp;<a href="https://www.wionews.com/world/coronavirus-worse-than-pearl-harbor-911-for-us-says-trump-297102" hreflang="en">Coronavirus 'worse' than Pearl Harbor, 9/11 for US, says Trump</a>

Earlier, renewing&nbsp;his criticism of China on Wednesday over the global coronavirus pandemic, US President Donald Trump said it was the "worst attack" ever on his country.

Trump lashed out at China, continuing a war of words over the origins of the deadly virus that emerged in Wuhan last year.&nbsp;

Beijing says the US wants to distract from its own handling of the pandemic.

Also read:&nbsp;<a href="https://www.wionews.com/world/nearly-one-out-of-five-children-in-us-left-hungry-since-virus-crisis-study-297103" hreflang="en">Nearly one out of five children in US left hungry since virus crisis: study</a>

China hit back Wednesday at US Secretary of State Mike Pompeo over his claims the virus originated in a Wuhan laboratory, saying he has no evidence.

"This matter should be handed to scientists and medical professionals, and not politicians who lie for their own domestic political ends," China's foreign ministry spokeswoman said.

''Some US&nbsp;politicians repeatedly blame China for domestic politics regardless of the facts. On this issue, countries in Europe and other areas in the world do have a choice to make, not between China and the United States, but between lies and facts, unilateral bullying and multilateral cooperation, and this is a choice that every country faces," said Hua.

She stated that China is on the side of strengthening international ties and has participated in supporting and cooperating with other nations to help stop the spread of the pandemic.

"The answer is obvious, and in fact many countries are already responding with actions. Many European leaders have made clear their support for the World Health Organization (WHO) to continue to play an important role in responding to COVID-19 and strengthening the global public health system.''

The European Union held an international pledging conference on May 4.

''China has&nbsp;actively participated in it and made its own contribution. On the issue of strengthening international solidarity and cooperation in the fight against the pandemic, China has always stood firmly with the United Nations, the WHO and almost all countries in the world, and made every possible contribution. I hope the United States can see its isolation at this time," said Hua.

The deadly virus has claimed&nbsp;263,831 lives worldwide while infecting&nbsp;3,755,341 people.

The United States is pressuring its allies and trying to coerce other countries to help it plant accusations against China on issues concerning COVID-19 responsibility, said a spokeswoman for China's Ministry of Foreign Affairs on Wednesday.

The United States is pressuring its allies and trying to coerce other countries to help it plant accusations against China on issues concerning COVID-19 responsibility, said a spokeswoman for China's Ministry of Foreign Affairs on Wednesday. Hua Chunying said that some US media reported the United States is pressuring its European allies to stand with it on pandemic responsibility and also to plant accusations against China. Also read: Coronavirus 'worse' than Pearl Harbor, 9/11 for US, says Trump Earlier, renewing his criticism of China on Wednesday over the global coronavirus pandemic, US President Donald Trump said it was the "worst attack" ever on his country. Trump lashed out at China, continuing a war of words over the origins of the deadly virus that emerged in Wuhan last year. Beijing says the US wants to distract from its own handling of the pandemic. Also read: Nearly one out of five children in US left hungry since virus crisis: study China hit back Wednesday at US Secretary of State Mike Pompeo over his claims the virus originated in a Wuhan laboratory, saying he has no evidence. "This matter should be handed to scientists and medical professionals, and not politicians who lie for their own domestic political ends," China's foreign ministry spokeswoman said. ''Some US politicians repeatedly blame China for domestic politics regardless of the facts. On this issue, countries in Europe and other areas in the world do have a choice to make, not between China and the United States, but between lies and facts, unilateral bullying and multilateral cooperation, and this is a choice that every country faces," said Hua. She stated that China is on the side of strengthening international ties and has participated in supporting and cooperating with other nations to help stop the spread of the pandemic. "The answer is obvious, and in fact many countries are already responding with actions. Many European leaders have made clear their support for the World Health Organization (WHO) to continue to play an important role in responding to COVID-19 and strengthening the global public health system.'' The European Union held an international pledging conference on May 4. ''China has actively participated in it and made its own contribution. On the issue of strengthening international solidarity and cooperation in the fight against the pandemic, China has always stood firmly with the United Nations, the WHO and almost all countries in the world, and made every possible contribution. I hope the United States can see its isolation at this time," said Hua. The deadly virus has claimed 263,831 lives worldwide while infecting 3,755,341 people.

China lambasts US for coercing countries to plant COVID-19 accusations against it

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