China warns of ‘serious hazard’

The trade spat between Washington and Beijing intensifies with the spotlight on ‘protectionism’.

HANOI: China warned that protectionism poses a “serious hazard” to growth and cautioned “individual countries” against isolationism, in a veiled reference to the deepening trade spat between Washington and Beijing.

The comments from China’s vice premier yesterday comes as the world’s top two economic powers edged closer to an all-out trade war after imposing tit-for-tat tariffs on billions of dollars of imports.

Tensions were heightened last week when President Donald Trump threatened to hit all China’s exports to the US, worth more than US$500bil (RM2 trillion) as he dou- bles down on the “America First” agenda he says aims to protect jobs and industries from overseas competition.

But without directly naming Trump or the United States, Hu Chunhua warned yesterday against countries going it alone and upend- ing the globalised trading system.

“Some individual countries’ protectionist and unilateral measures are gravely undermining the rulesbased multilateral trading regime, posing a most serious hazard to the world economy,” Hu said at the World Economic Forum in Hanoi.

“Self-isolation will lead nowhere and only openness for all represents the right way forward,” he added.

The escalating trade spat between Washington and Beijing is being closely watched in South-East Asia where export-focused economies may be set to gain from the fallout.

Rising labour costs in China have already precipitated a push into countries such as Vietnam and Cambodia where Adidas shoes, H&M T-shirts and Samsung phones are made on the cheap.

But the trade war has accelerated that process, with several Chinese firms turning to the region to produce items from bike parts to mattresses to avoid the US tariffs.

“Asean countries don’t want to count chickens before they hatch,” Fred Burke, managing partner at Baker McKenzie in Vietnam, said.

“But I think they see it on a net basis as a gain for them because it means shifting manufacturing into South-East Asia that was ... (earlier) in China.”

Only openness for all represents the right way forward. Hu Chunhua

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