China’s economy is going through a transition to a new, more sustainable model and is helping stabilize the world economy by means of securing a supply chain and helping less-developed countries, said a high-ranking executive at Standard Chartered Bank (SCB) on Friday.
Noting a tenancy among global investors to over-scrutinize economic data coming out of China, Benjamin Hung Pi-cheng, Standard Chartered's CEO for Asia, told China Global Television Network (CGTN) in an interview on the sidelines of this year's Bund Summit in Shanghai that a longer-term view of the country's trajectory is more pertinent.
"I think there's little point on micro analyzing every nano-KPI that comes out. We have to look at where China is moving and what it's transitioning into. I think near-term, acknowledging there will be some softness. I think this is fundamentally due to slower consumer demand, and that itself is driven by the softer sentiment arising from the whole CRE (commercial real estate) correction. That I think they're going through a process that will take time. Fundamentally, I still think consumption is a huge engine for powering Chinese growth in the next chapter alongside supply chain reforms, shifting to new economy. I don't think we should over-worry about it. We're going through a transition, hopefully, to a more sustainable forward future," Hung said.
The bank executive also stressed that China's large-scale supply chain is playing an important role in stabilizing world economy, noting it would be impossible to replace in a short period of time.
"Fundamentally, the whole world having gone through perhaps two or three years ago, huge amounts of supply chain disruption -- most of the players would want to see resilience, resilience in how goods are delivered from one part of the world to another to make sure there as little disruption as possible. If you are an importer from Europe or from the U.S., it will take time for them to diversify and change. Because that current chain that China provides, it's very, very high quality, very cost efficient, and producing with massive scale," he said.
Speaking of the just-concluded 2024 Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, Hung said the fruitful outcomes of the summit show that China is actively supporting the development of African countries, which took a harder hit in the COVID-19 pandemic in previous years.
"Unfortunately, I think COVID-19 has been very regressive where the rich countries became richer, the poor countries became poorer. So I think we need to have also a phase to help support those who were a little bit challenged by COVID-19 to help bring them up. And what was discussed and announced yesterday, which is very good of China, offering the tariff-free to all the Least Developed Countries, many of which are in Africa. That's fundamentally very, very good. That will help support the development of the African nations," he said.
In his keynote speech at the FOCAC summit, Chinese President Xi Jinping said that China will give all Least Developed Countries (LDCs) having diplomatic relations with China, including 33 countries in Africa, zero-tariff treatment for 100 percent tariff lines.
China's economy going through transition to more sustainable model: SCB executive
The U.S. government's decision to hike tariffs on Chinese-made products, including electric vehicle batteries, critical minerals, steel and aluminum, will not only harm its economy but also tarnish its global reputation, said a China Media Group (CMG) commentary published on Sunday.
An edited English-language version of the commentary is as follows:
In May, the U.S. government announced plans to further increase tariffs on Chinese electric vehicles and other products while maintaining the existing Section 301 tariffs on China. The measures were initially scheduled to take effect on Aug 1 but were postponed twice, first on July 30 and then on August 30, as the U.S. officials claimed that they needed more time to review over one thousand public opinions.
Despite a large number of public opinions opposing the imposition of additional tariffs or requesting broader tariff exemptions, the U.S. government ultimately refused to listen and went its own way. This unilateral and protectionist approach not only violates the U.S. commitment to "not seeking to suppress or contain China's development" and "not seeking to decouple from China", but also goes against the consensus reached by the two heads of state, showing that the United States is going back on its own words and breaking its own commitments made to China.
In the finalized decision released by the U.S. government, most of the items announced in May have been adopted, including a 100 percent additional tariff on electric vehicles, a 50 percent additional tariffs on semiconductors and solar cells, and a 25 percent additional tariffs on steel, aluminum, lithium-ion batteries and critical minerals.
The decision also proposed to include tungsten, wafers, and polysilicon products into the list of products subject to additional tariffs.
Analysts believe that the political implications behind the U.S. tariff hike are quite evident. With the election season approaching, both parties are intensifying their campaigns, and adopting a tough stance on China has become a form of political correctness.
During a recent TV debate, the Democratic presidential candidate criticized the Republican candidate's tariff strategy, while the current Democratic administration has ratcheted up tariffs on China just months before the end of this term.
Engaging in a tariff war will not resolve the issues, but may instead backfire on the United States. The Information Technology Industry Council, a Washington-based global tech trade association, on Friday released a statement from its President and CEO Jason Oxman, saying that the additional tariffs on China have resulted in a cumulative loss of 221 billion U.S. dollars for American companies and consumers since they were implemented.
The U.S. government has been claiming to protect domestic industries by imposing additional tariffs and even pushing for the relocation of supply chains. However, the outcomes have fallen short of expectations. The U.S. companies could hardly agree with these measures.
The U.S. tariff hike this time is primarily targeting China's new energy sector. Research indicates that the trade transfer effects of U.S. tariff measures are limited. Raising tariffs have increased import costs for the United States instead of achieving the purpose of reducing dependence on China.
The American people have also suffered a lot as a result. As the Biden administration maintained tariff hikes on certain Chinese-made products first announced during the Trump era, Americans are still paying more for shoes, suitcases and hats, according to a recent Cable News Network (CNN) report.
Estimates from Moody's, a leading rating agency, suggest that 92 percent of the costs from the raised tariffs will be borne by U.S. consumers, increasing the average American household's expenses by 1,300 U.S. dollars annually. Many economists caution that these higher tariffs will merely lead to increased costs for American consumers.
Data from the U.S. Tax Foundation indicates the tariff increase on China has not only failed to address employment issues for American workers, but also led to the loss of 142,000 jobs across the country.
For the United States, increased tariffs on China have further damaged its international image. The World Trade Organization has long ruled that the Section 301 tariffs violate WTO rules. However, instead of rectifying its wrongdoings, the United States has further increased tariffs on Chinese products, making one more mistake and once again proving that it is an outright disruptor of international rules.
The significant rise in tariffs imposed by the United States on China may jeopardize global trade and economic growth, and hinder the global green transformation pursuit.
It is known to all that Chinese companies involved in electric vehicles, lithium-ion batteries, photovoltaic batteries and other related industries have been actively promoting international cooperation in production and supply chains, contributing to the global economy and advancing green, low-carbon initiatives.
The U.S. approach of decoupling and disrupting industrial and supply chains is posing risks to both current and future prospects for humanity.
It has been proved time and again that the U.S. abuse of Section 301 to hike tariffs on China is unpopular, and its attempt to undermine Chinese companies and related industries through raising tariffs has never worked.
This round of U.S. high tariffs targeting China's new energy sector will not work either, but will only hurt its economy and image even further.
The U.S. should rectify its wrongdoings immediately and remove all additional tariffs on Chinese goods, or China will take necessary measures to firmly safeguard the interests of Chinese enterprises.
US tariff hikes on Chinese goods hurt its own economy, reputation: commentary
