My Take | The time ‘to take on’ China is long past
- You may not like China or the Chinese, but the nation is too intricately tied up in the world economy to be untangled without doing harm to all involved
Many people and countries seem to think it’s necessary “to take on” China. But if they think Donald Trump will do the job for them, they have it coming. The way this American president and his administration have been going about it will prove damaging not only to his country and many of its closest allies. This will be so whether or not the two superpowers make nice in the coming weeks with a trade pact.
Beijing is dangling before Trump the prospect of buying an extra US$1.35 trillion of its goods in the next five years.
According to estimates from a new Barclays study, Taiwan will, as a result, lose US$20 billion annually in exports to mainland China; South Korea US$23 billion; and Japan US$28 billion! So much for Washington standing up for its regional allies in Asia. It makes little difference to the Chinese where they buy their goods, so long as they get the Americans off their backs.
When Beijing wants a mediation system under the World Trade Organisation in future trade disputes with the US, no one backs it, so Washington gets a free pass on insisting that it should be the judge. But many trade experts think the two countries will be contravening WTO rules by settling among themselves.
You lose if the two countries make nice. But you also lose if they don’t. Take Huawei. If its 5G networks are really as good as it claims – and many independent experts think so – then having to use American or European 5G systems because of an American ban on Huawei will cost you an extra 15 per cent – an estimated figure by Huawei – for the same or inferior networks. Many independent experts also think security concerns about Huawei’s networks are overblown: it’s not the hardware per se but how you configure it that makes a system safe from cyberattacks or not.
