China on the rise as US slips in top 20 list
CHINA has accused the US of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 percent tariffs on $200 billion (R2.67 trillion) of Chinese goods.
China’s Commerce Ministry said yesterday that it was “shocked” and would complain to the World Trade Organisation, but did not say how it would retaliate.
In a statement, it called the US’s actions “completely unacceptable”.
The Foreign Ministry described Washington’s threats as “typical bullying” and said China needed to counter-attack to protect its interests.
“This is a fight between unilateralism and multilateralism, protectionism and free trade, might and rules,” Foreign Ministry spokesperson Hua Chunying told a media briefing yesterday.
Beijing has said it would hit back against Washington’s escalating tariff measures, including through “qualitative measures”, a threat that US businesses in China fear could mean anything from stepped-up inspections to delays in investment approvals and even consumer boycotts.
China could limit visits to the US by Chinese tourists, a business state media said is worth $115bn or shed some of its US Treasury holdings, Iris Pang, Greater China economist at ING in Hong Kong said.
The $200bn far exceeds the total value of goods China imports from the US, which means Beijing may need to think of creative ways to respond to such US measures.
On Tuesday, US officials issued a list of thousands of Chinese imports the Trump administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium, prompting criticism from some US industry groups.
It also includes consumer goods ranging from car tyres, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
“For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,” US Trade representative Robert Lighthizer said in announcing the proposed tariffs.
“Rather than address our legitimate concerns, China has begun to retaliate against US products. There is no justification for such action,” he said.
Last week, Washington imposed 25 percent tariffs on $34bn of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China. Each side is planning tariffs on a further $16bn in goods that would bring the totals to $50bn.
Investors fear an escalating Sino-US trade war could hit global growth and damage sentiment.
Yesterday, the MSCI’s broadest index of Asia-Pacific shares outside Japan was down about 1 percent, while the main indexes in Hong Kong and Shanghai recovered somewhat after falling more than 2 percent.
S&P 500 and Dow futures dropped around 1 percent, pointing to a weak opening on Wall Street later yesterday.
The onshore yuan tracked its offshore counterpart lower with traders closely watching the key 6.7 per dollar-level as pressure mounted on the currency.
New list
US President Donald Trump has said he may impose tariffs on more than $500bn worth of Chinese goods – roughly the total amount of US imports from China last year.
The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms and increasing the stakes for lawmakers in Trump’s Republican Party facing elections in November.
The list is subject to a twomonth public comment period before taking effect.
US business groups and lawmakers from Trump’s own Republican Party were critical of the escalating tariffs.
Senate finance committee chairperson Orrin Hatch said the announcement “appears reckless and is not a targeted approach”.
The US Chamber of Commerce has supported Trump’s domestic tax cuts and efforts to reduce regulation of businesses, but does not back his aggressive tariff policies.
“Tariffs are taxes. Imposing taxes on another $200bn worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers,” a chamber spokesperson said.
Louis Kuijs, the Hong Kong-based head of Asia Economics at Oxford Economics, said while he expects China to strongly condemn the US moves, its policy response is likely to be limited for now.
“In part because they have only limited ammunition and in part because it’s still early in the process on the US side,” Kuijs said.
Trump has been following through on pledges he made during his presidential campaign to get tough on China, which he accuses of unfair trade practices including theft of intellectual property and forced technology transfer that have led to a $375bn US trade deficit with China. – Reuters CHINA joined the world’s top 20 most innovative economies for the first time while the US fell out of the five top-ranked countries, according to a report released on Tuesday by one of its co-sponsors, the UN intellectual property agency.
The Global Innovation Index 2018 keeps Switzerland in the number one spot, followed by the Netherlands, Sweden, the UK and Singapore. The US fell from fourth place last year to sixth this year, while China jumped from 22nd to 17th in the rankings.
Francis Gurry, director-general of the UN World Intellectual Property Organisation, said China’s ranking represents a breakthrough for its economy, which is rapidly transforming and prioritising research and ingenuity.
“China’s rapid rise reflects a strategic direction set from the top leadership to developing world-class capacity in innovation and to moving the structural basis of the economy to more knowledge-intensive industries that rely on innovation to maintain competitive advantage,” Gurry said. “It heralds the arrival of multipolar innovation.”
Prowess
Now in its 11th edition, the index ranks 126 economies based on 80 indicators ranging from the creation of mobile applications to education spending, scientific and technical publications, and intellectual property filing rates.
The index is sponsored by the WIPO, Cornell University SC Johnson College of Business and INSEAD, the graduate school of business with campuses in France, Singapore and Abu Dhabi.
The report said “China’s innovation prowess becomes evident in various areas”, with some of its greatest improvements in global research and development companies, hitech imports, the quality of its publications and enrolment in graduate education.
“In absolute values, and in areas such as R&D expenditures and the number of researchers, patents and publications, China is now first or second in the world, with volumes that overshadow most high-income economies.”
The report said China’s rapid rise has been spectacular and shows the way for other middle-income economies, though only Malaysia, 35th in the rankings, continues to edge closer to the top 25.
According to the index, 20 middle and lower-income economies that performed “significantly better” than their level of development would predict made this year’s list of “innovation achievers”, including three for the first time, South Africa, Tunisia and Colombia. Six of them come from sub-Sahara Africa, the most for any region. In addition to South Africa, they are Kenya, Rwanda, Mozambique, Malawi and Madagascar. – AP