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    Bluster, hyperbole to expected from Trump, but reciprocity will be key his goal

    来源:    编辑:编辑部    发布:2018/05/31 10:52:17

    Looking at the Sino-US trade scene, one can see it two ways. From China's perspective, it seems the Trump Administration is a wrecking ball destroying a good thing involved. And on one level, that is true enough.

    China has pulled itself out of the third world through exporting labour-intensive manufactures to the west. This has given China the wherewithal to develop its once impoverished north west, enabling it to lay down railways and roads and massively cut wastage hauling commodities from distant hinterlands to populous coastal ragions, all of which has enriched everyone along these arterial supply chains.

    The United States, in turn, has been able to supply its people at low cost goods and services that would have amazed all but the richest of their forefathers. Americans had had it all, from a wide variety of the most fashionable apparel to mobile telephones that bring them concerts, games, movies, with classic literature read to them by talking books. And also, access to the long-sought the China market, which had been the west's desire since Lord Macartney first came to trade with China in 1792.

    Yet there are thorns in this bed of roses. On China's side, there was too much public enchantment with things western, an abandonment of cherished values of Chinese culture than survived the rigors of communism. Among the young, there has been a renunciation of the puritan ways of Maoism in the embrace of Deng Xiapeng's free market approach. "Socialism with Chinese Characteristics" seemed like less and less socialism and very little that was authentically Chinese, as red ideologues retreated to the periphery of life only to be indulged on feast days like Anglican bishops at Christmas and Easter to be heard but not heeded by audiences looking at their watches to see when sermons would end they could resume their busy lives as before.

    This was not the spirited insurrection of Tianamen Square, but the dazzling attraction of the shopping mall. This threatened to be an unwelcome revolution of rampant public indifference.

    Painful thorns pricked Americans too. What jobs unskilled workers could get, were too few to employ more than a fraction of them, and what few that got those jobs, were not black males, who were disproportionally represented in the prison population, now soaring to be the highest in the world. These exclusionary employment practices exacerbated the situation still further. Moreover, those who did have unskilled jobs, were competing against poverty stricken hispanic illegal immigrants.

    Such are been the root causes of social unrest in the United States, which had been the priority fear in China in years past as prosperity moved too slowly and unevenly across the country to poorer regions. But for US, the biggest problem was that goods that were once made by Americans for Americans were now being made by the Chinese for Americans.

    This, more than anything else, brought Donald Trump to power as most male voters backed him to do something about this trend that was doing them no good. To Democratic and Republican nostrums, that were indeed jobs to be filled, if only people had the training and skill to fill them. But this was of little comfort. The unrecognised problem was that there are too few who have the skill or the inclination to study to make them fit for such work - no matter how much money one spent on education.

    There has been much talk of trade war - even real war over North Korea. Even some talk of nuclear war, with Henry Kissinger's suggestion of a first strike at Pyongyang to cut off the head of the snake. Even if that were successful it is hard to see what would follow. China is said to have moved 300,000 troops closer to the North Korean border - that's twice the size of the British Army, but only a 12th of the Chinese Army. Would such a force go to North Korea's assistance, or simply take over the north?

    These are unanswerable questions even by those with the fullest information to answer them because they cannot know what outcomes the moves and counter-moves made by independent actors would bring about, much less the degree of impact these moves might have.

    Questions that arise that can be more fruitfully answered relate to trade, as what is more likely to occur in terms with trade after some tough talk with the US. The key words here are "reciprocity" and "transparency". Not the sort of transparency that has been allowed to serve as such since China joined the WTO in 2001, when agreements at the diplomatic table were transmitted to the customs shed in a dilatory, if not deleterious manner with an object of subverting or nullifying the agreement.

    One cosmetics importer, allowed to import 10 product lines, found that only two sold well and wanted to increase the importation of the most promising lines, two, but this exceeded her quota for each, which became a huge problem for the regulator. Several lunches and dinners, as the applicant's expense, were required to resolve the matter in her favour. And just so technical aspects of the request could be more easily addressed, it was thought it would be best if the whole department come along too.

    Such are the practices the Trump administration wishes to stop. Of course, they would go well beyond that. Because recent scandals involving the adulteration of baby formula with impurities to boost protein content, Chinese mothers of means have sought to secure imported foreign baby formula from Hong Kong as they do not trust the domestic product. The demand has been so great in Hong Kong that there has not been enough to meet local demand, and the authorities have had to limit exports to the mainland, and their agents who can only legally bring it small quantities with each visit. Why can't it be imported into the mainland without fuss or bother, the way cheese is?

    Other problems relate to trade obstruction sometimes for spurious health or technical reasons. One such case involves the blockage of imports of American distillers’ grain first quarantined on the basis of the supposed presence of genetically modified trace materials and more recently for dumping, based on US agricultural subsidies as it was being sold at prices below which domestic producers could compete.

    Then there is the case of coercive technology transfer. Under the terms of China’s entry to the WTO in 2001, Beijing was allowed to limit foreign ownership of companies in important industries including media, telecommunications, finance and vehicle manufacturing. These limitations forced many US companies into joint ventures with state-owned companies, a process by which technology is transferred to rivals.

    US negotiators agreed to these allowances because Chinese companies were not competitive internationally. US companies and government officials largely approved of these stipulations to gain access to Chinese markets.

    But now is not then. The growth of companies such as Huawei, now a global manufacturer of telecommunications networking equipment and a competitor to US companies such as Qualcomm and Cisco, underscores how those conditions have changed.

    Partly because of these factors, partly because China was still a third world country in the barest technical sense, partly because US Republican Administrations were loath to disturb trade flows as the only good news they had from war zones that produced little but grief, and partly because fellow travelling Democratic Administrations were slow to criticise the great worker state as that party drifted ever-leftward in its search for a new policy options that would replace the "same-old, same-old" social prescriptions and bromides that had become threadbare and vacuous with the passage of decades.

    There has been much posturing since the advent of the Donald Trump presidency, but while his bark might well be worse than his bite regarding a real war or even trade war, China should expect firm demands for reciprocity and transparency and that there will be enforcement of anti-dumping tariffs. As much as of this will hurt, things have drifted away from one's plain understanding of fair trade, much less free trade, into the arcane obfuscatory language of the bureaucratic swamp that President Trump has pledged to drain, towards a day when plain speaking and plain understanding will again rule the roost.

    And while one can expect much bluster and hyperbole to come, because that is the way the Donald operates, there will be much that will be plainly understood when deals come to closing on one hopes on firmer and fairer footing that has been obtained so far.