China-US trade war

Even as the US government blacklists several Chinese companies for being “Chinese Communist military companies” or a national security threat, Wall Street does not seem fazed; investors seem prepared to put their money where their mouth is when it comes to betting on China.

With the Biden administration in place, some fear that the generous social welfare policies Democrat governments tend to implement will further deplete the US’s dwindling coffers. Even as some Americans have a knee-jerk reaction to what they perceive to be socialism, can the Chinese example offer any learning points for the Americans? How were they able to industrialise so quickly and move towards poverty alleviation?

China’s willingness to consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is perhaps an admission that emphasising free trade but ignoring fair trade is no longer sustainable. Even sacred cows such as its state-owned enterprises (SOEs) and insistence on the WTO platform for multilateral trade negotiations may be up for discussion. On a practical level, the CPTPP may just be the external push it needs to force its SOEs to reform.

US-based researcher Wei Da feels that both China and the US need to make significant adjustments in their relations with each other, or else the scenario of a new Cold War and a real threat of hot war will not be far off. Who needs to understand that the world is different now, and adjustments have to be made? And who is the more backward party that has to adjust more?

China’s Ministry of Commerce recently released new rules targeted at blunting the suppressive impact of the US’s long-arm jurisdiction statutes on Chinese companies. The method, however, looks likely to put stress on third-party companies supplying to Chinese companies. Would this be a case of cutting off the nose to spite the face?

Zhou Wenxing observes that the Biden administration needs to turn a new page on US-China relations. One way to do this would be to go with a derivative of the US’s engagement policy of the past. Only this time, it should not seek to change China, but change its own view of how cooperation and peaceful coexistence with China can be achieved in the next decade and beyond.

EAI academic Yu Hong notes that the RCEP will bring greater regional economic integration by increasing trade in Asia-Pacific and generating new business opportunities for companies in the 15 member countries of ASEAN, China, Japan, South Korea, New Zealand and Australia. China and ASEAN in particular, are well-placed to reap many of the benefits.

One solution that ended the Vietnam war may provide some lessons for bringing the Afghan war to an end during Biden’s presidency. Forty years ago, the Nixon administration played the China card, enabling Washington to leave the Vietnam war. In the present, a replica of a Vietnam-inspired exodus — one moderated by China and its ally Pakistan — is worth pursuing. China has built relations with all of Afghanistan’s neighbouring countries and has the capacity to build a regional infrastructure and economic network. US academic Ma Haiyun explores the possibilities.

With the recent signing of the RCEP and China’s comment that it will “favourably consider” joining the CPTPP, are prospects looking up for greater domestic reform and regional economic integration across the board, and will dreams of a free trade area of the Asia-Pacific have a higher chance of eventually taking shape? Japan-based academic Zhang Yun looks at the potential outlook.