Electric vehicles and supply chains dominate agenda
Chinese and American business leaders are proposing to defuse two contentious trade issues between the two nations, as they seek to strike a tone that is more conducive to commerce between the world’s two largest economies.
The Chinese and US delegations of the Business Advisory Council (Abac) of the Asia-Pacific Economic Cooperation Forum (Apec) have proposed establishing a sustainable supply chain management mechanism, according to the Chinese team’s chairman Ning Gaoning.
The mechanism would ensure “resilience in the global supply chain, and be beneficial to businesses”, Ning said during the Abac’s meeting in Hong Kong, adding that the proposal had been “well received” and got “lots of comments”.
The group had also proposed to add new-energy products such as electric vehicles, solar panels and batteries to a tariff-free schedule, so that they could be shared and traded for the benefit of humankind, said Ning, who retired in 2022 as chairman of state-owned Sinochem Holdings Corporation.
The two proposals would next be submitted to the relevant trade or commerce ministries in each of the 21 member economies of Apec – including Hong Kong and Taiwan – for discussion by their senior officials, before they are recommended to the respective heads of government. If adopted, the proposal could make its way into the communique after the Apec Leaders’ summit in the Peruvian capital Lima from November 10.
There is no guarantee of success, as Abac proposals must wend their way through the bureaucracies of 21 member economies before appearing on the leaders’ agenda. Even if they are adopted, Apec’s pronouncements are non-binding.
Still, any adoption by the body is a fillip to multilateralism and a return to the path of breaking down trade barriers, as electric vehicles become the latest lightning rod in US-China trade relations. About 200 Abac delegates have been meeting in Hong Kong this week.
“Homeshoring, reshoring and friendshoring are really all against the original purpose of Apec, which was established at the end of the Cold War for the purpose of integration, free trade, environmental [protection] and sustainability,” Ning said.
“It’s not very often today that a Chinese organisation and a US organisation [can] reach an agreement on [proposals] that are beneficial to business.”
The proposal about newenergy products will help to address sustainability, climate change, and carbon deduction. “It’s an inevitable and very urgent task,” Ning said. “We experienced the hottest weather already last year. We should really [handle] that threat globally.”
In his view, China was leading the way in this regard. “China is pushing for free trade, environmental policy, [and] transition for energy.”
China is already the world’s largest electric-car market. New-energy vehicles (NEVs) will make up about half of new car sales on the mainland by 2030, as state incentives and expanding charging stations win over more customers, according to Moody’s Investors Service.
NEVs comprise pure-electric cars, plug-in hybrids and hydrogen-powered cars.
“The members realise the very fast-growing electricvehicle market inside China. We anticipate it will be more than 60 per cent in the next five years, sometime [in] 2030, and will take an overwhelming position in the global car market,” said Ning, who is a leader in the Abac’s sustainability working group.