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Showing posts with label trade. Show all posts
Showing posts with label trade. Show all posts

Friday, November 8, 2024

Promote steady improvement and growth in China-US relations through the right way forward

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Chinese President Xi Jinping sent a congratulatory message to Donald J. Trump on his election as the next President of the US on Thursday. Xi noted that history tells us that both countries stand to gain from cooperation and lose from confrontation. A China-US relationship with stable, healthy and sustainable development serves the common interests of the two countries and meets the expectations of the international community. It is hoped that the two sides will, in the principles of mutual respect, peaceful coexistence and win-win cooperation, enhance dialogue and communication, properly manage differences, expand mutually beneficial cooperation, and find the right way for China and the US to get along with each other in the new era to the benefit of the two countries and the world.

We have noticed that President Xi's congratulatory message has received widespread attention and reports from international community. Phrases such as "China and the US must live in harmony in the new era," "Hopefully China and the US can find a way to get along" and "China and the US must live in harmony and manage differences" have become the themes of many media reports, fully reflecting the world's expectation for China-US relations. After the dust settled from the US elections, amidst the world's many concerns and worries regarding China-US relations, China's attitude undoubtedly provides valuable certainty and stability for both China-US relations and the world.

Where are China and the US headed? The Chinese side's answer to this question, including its attitude toward China-US relations, has been consistent. Although the situations of both countries and their relationship have undergone significant changes, China's commitment to the goal of a stable, healthy and sustainable China-US relationship remains unchanged; its principle in handling the relationship based on mutual respect, peaceful coexistence and win-win cooperation remains unchanged; its position of firmly safeguarding the country's sovereignty, security and development interests remains unchanged; and its efforts to carry forward the traditional friendship between the Chinese and American people remain unchanged. The four "unchanged" aspects reflect both strategic clarity and a sense of responsibility.

History and reality have repeatedly proven that China-US relations are not a zero-sum game in which one side loses and the other wins, or one rises and the other falls, because the two countries have enormous common interests. Forty-five years ago, it was the common interests that allowed China and the US to open the door of interaction that had been frozen for decades. By tapping into complementarity and drawing on each other's strengths, the two countries have significantly promoted the development of their respective economies and optimized and upgraded their industrial structures, while enhancing the efficiency and benefits of the global value chain. Today, China is one of the top three export markets for 32 US states, with more than 70,000 US companies investing and establishing businesses in China and 930,000 jobs in the US supported by exports to China alone. It can be seen that both China and the US have benefited from decades of generally stable bilateral relations, and it is in the two countries' mutual and fundamental interest to prevent conflict and confrontation and achieve peaceful coexistence.

China-US relations are not a multiple-choice question involving whether or not to do a good job, but a must-answer question on how to do a good job. Just as President Xi stressed, when China and the US work together, they can accomplish a great deal for the good of both countries and the world at large. There are many "cooperation common denominators" between China and the US. After the Chinese giant pandas Yaya and Lele arrived in the US, the number of visitors to the Memphis Zoo surged 46 percent. Last month, Baoli and Qingbao going to Washington caused quite a sensation; Tesla's win-win story of building a factory in Shanghai is still continuing; there is still ample room for cooperation between the two sides in trade, education, anti-drugs, justice, technology and other fields. In the face of a complex and intertwined international situation, the world looks to China and the US to lead international cooperation in addressing global issues. Countries around the world need to unite and collaborate, rather than divide and confront; the people of the world hope for openness and progress, rather than closure and regression.

China-US relations have weathered many storms over the past few decades, during which numerous pessimistic predictions have emerged. However, what people have actually seen is that whenever difficulties arise, it is cooperation - not confrontation - that resolves the issues. What pushes the relationship between the two countries as well as global peace and development to move forward is always win-win cooperation for mutual benefit rather than a zero-sum game. For China and the US, dialogue is better than confrontation, cooperation is better than decoupling, and stability is better than volatility. Regardless of changes in US domestic politics, this should be a shared consensus between both sides and a responsibility of these two major countries. China and the US must find the right way to coexist, as the fundamental lesson in the development of relations between the two countries is that we both stand to gain from cooperation and lose from confrontation.

The US side needs to recognize that China also has the right to develop. China's development is an opportunity for the US and the world, not a challenge. In fact, it has been proven that engaging in trade wars, industrial wars, and technological wars yields no winners. Attempting to solve problems through "decoupling" will only lead to opposite results. Forcing countries around the world to "choose sides" between China and the US has become an increasingly unpopular "multiple-choice question" for many nations. The US, in particular, should not tread on China's red lines regarding issues of sovereignty, security, and development interests.

The China-US relationship is the most important bilateral relationship in the world. How China and the US interact will determine the future and destiny of humanity. We hope that the US side will meet the Chinese side halfway to find the right way for two different civilizations, systems, and paths to coexist peacefully and develop together on this planet, promoting stability in China-US relations and striving for improvement and progress on this basis.


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Thursday, June 20, 2024

Malaysia bids to join BRICS alliance

 

 
Anwar conveys interest to Brazilian president and ‘will go through the process’

BUKIT MERTAJAM: Malaysia will seek to join the BRICS (Brazil, Russia, India, China and South Africa) intergovernmental organisation, says Datuk Seri Anwar Ibrahim.

The Prime Minister said he had conveyed Malaysia’s wishes to Brazil’s President Luiz Inacio Lula da Silva.

“We (Malaysia) will go through the process to enable the country to join the organisation. For the past two months, the Foreign Ministry has conducted a study on our policy before deciding to join BRICS.

“I have spoken to the President of Brazil about our wish,” he said after attending a gathering for local residents in Mengkuang Semarah here yesterday.

Anwar was earlier quoted as saying that Malaysia would begin the formal procedures to join BRICS.

In an interview with Shanghai-based news site Guancha, Anwar said Malaysia was now awaiting the final decision and feedback from the South African government.

On the ground: Anwar getting friendly with the children who attended the qurban ceremony with the Prime Minister at Masjid Jamek Cerok Tokun Bawah in Bukit Mertajam, Penang. — BernamaOn the ground: Anwar getting friendly with the children who attended the qurban ceremony with the Prime Minister at Masjid Jamek Cerok Tokun Bawah in Bukit Mertajam, Penang. — Bernama

BRICS was originally founded as BRIC, with the four original members being Brazil, Russia, India and China. It held its first summit in Yekaterinburg, Russia, in 2009.It was renamed BRICS when South Africa joined in 2010.

The group now comprises Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, the United Arab Emirates and Saudi Arabia.

Together, they make up about 30% of the world’s land surface and 45% of the global population.

The grouping, originally set up to highlight investment opportunities, has evolved into a geopolitical bloc where members meet annually at formal summits.

In July 2014, BRICS created a US$100bil (RM471bil) New Development Bank with a currency pool worth over another US$100bil.

Since 2012, it has been planning an optical fibre submarine communications cable system, known as the BRICS Cable.

During the summit in 2023, BRICS members committed to studying the feasibility of a new common currency.

To date, 15 summits have been held with Russia scheduled to hold the next one in Kazan, Russia, in October.

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Tuesday, March 5, 2024

We choose our own friends, China remains a key ally

MELBOURNE: As a “fiercely independent” nation, Malaysia will not be dictated to by anyone over its relations with China or any of its important neighbours, says Datuk Seri Anwar Ibrahim.

“While we remain an important friend to the United States, Europe and here in Australia, that should not preclude us from being friendly to one of our important neighbours, specifically China,” the Prime Minister said.

“We are fiercely independent. We do not want to be dictated to by any force.

“If they have problems with China, they should not impose them upon us. We do not have a problem with China,” Anwar said in a joint press conference with Australian Prime Minister Anthony Albanese during his official visit to the country yesterday.

Asked about how Sinophobia manifested itself and its effect on the region, Anwar replied that Malaysia upholds an “open trading policy to encourage investments from foreign countries.”

“They have levied some criticisms against us for giving additional focus to China. Right now, China seems to be the leading investor in Malaysia.

“Cumulatively, it’s still the United States of America,” he added.

On Feb 27, Anwar had decried “China-phobia” among US and Western allies in an interview with the Financial Times in the United States, questioning why Malaysia would “pick a quarrel” with China, its largest trading partner, in response to US criticism of Malaysia’s ties with Beijing.

“Why must I be tied to one interest? I don’t buy into this strong prejudice against China, this China-phobia.”

Calling China an important neighbour, he said Malaysia would give priority to enhancing relations with Beijing in terms of trade, investment and culture.

Anwar, who is in Australia with his wife Datuk Seri Dr Wan Azizah Wan Ismail and several ministers and leaders, will attend two major programmes – the Malaysia-Australia Annual Leaders’ Meeting and the Asean-Australia Special Summit.


Warm welcome: Anwar shaking hands with Albanese at Government House in Melbourne, Victoria. Looking on is Governor of Victoria, Margaret Gardener. — BernamaWarm welcome: Anwar shaking hands with Albanese at Government House in Melbourne, Victoria. Looking on is Governor of Victoria, Margaret Gardener. — Bernama

On the Palestinian-Israeli conflict, Anwar lauded the Syrian government for supporting the call for a ceasefire and enhancing media efforts in Gaza.

“The consensus is in calling for a ceasefire and good humanitarian support, and probably avoiding the contentious issues between Palestine and Israel. At least for now, it is to cease fire and provide humanitarian assistance.”

Albanese also reiterated his call to end civilian suffering through a humanitarian ceasefire, the release of hostages, and a two-state political solution for Palestinians and Israelis to live with security and stability.

On the 10th anniversary of flight MH370, which went missing on March 8, 2014, Anwar said Malaysia would not hesitate to renew the search for the aircraft if there was “compelling evidence.”

“We will be glad to reopen (the search) because I don’t think it’s a technical issue. It is an issue affecting the lives of people, and whatever needs to be done must be done,” he said.

Both Anwar and Albanese also agreed that Malaysia and Australia would like to achieve more growth in trade and economic relations, especially in green energy and education.

“There’s a real potential for further institutional investment from Australia into Malaysia as well, with universities and tertiary education being a real prospect.

“Australia remains an important supplier of LNG to Malaysia. We have so much in common in our economies that is quite complementary,” Albanese said.

He also said Australia was focused on this region despite receiving critical commentary about it sometimes.

“We make no apologies for our focus being on South-East Asia in the Indo-Pacific because this is where our future economic prosperity will be determined.

“We’re living in this region, the fastest-growing region of the world. What that presents is an enormous opportunity for both our nations,” he said.

Anwar replied that Malaysia was committed to facilitating all avenues that both countries could explore – including renewable energy, green technology, digitalisation, food security and education opportunities involving top Australian institutions.

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Saturday, December 16, 2023

Goodbye 2023; Hello 2024

 


2023 will be remembered as a tipping point year when almost all mega-trends of finance, technology, trade, geopolitics, war and climate heating showed signs of acceleration in speed, scale and scope.


You can call this a state of permacrises, a series of cascading shocks that seem to be building up to a bigger shock sometime in the future.

In finance, the year began with the collapse of Silicon Valley Bank on 10 March 2023, followed by Signature Bank. The Fed and FDIC (Federal Deposit Insurance Corporation) acted fast to guarantee all deposits to stop what is now called “Twitter Deposit Runs” against banks. In Switzerland, Credit Suisse was taken over by UBS on 19 March, after the bank lost nearly US$ 75 billion worth of deposits in three months. Swiss financial credibility was hurt when Credit Suisse AT1 (Tier One bonds) bond-holders became outraged that they should suffer write-downs ahead of equity holders.



Although prompt action by the Fed and Suisse financial authorities averted global contagion and restored calm to financial markets, the Fed hiked interest rates four times in 2023 to 5.25-5.5% to tackle inflation. This month, gold prices touched a record high of US$2,100 per ounce, signalling anticipated inflation abatement, but escalated geopolitical tensions.




In technology, 2023 marked the seismic arrival of generative artificial intelligence (AI), through the public launch of ChatGPT in November 2022. Commercialized AI is considered the next big thing after the internet, sparking off a US tech stock rally, led by the Magnificent Seven companies in AI-related software and hardware. The rally averted a year of portfolio losses in financial markets hurt by interest rate hikes.

In trade, the latest UNCTAD Global Trade Update found that global trade will shrink by 5% to US$ 30.7 trillion in 2023, with trade in goods declining by nearly US$2 trillion, whereas trade in services would expand by US$500 billion. The outlook for 2024 is pessimistic because trade issues are now geopolitical, rather than purely market-driven. Global supply chains are either decoupling or de-risking to avoid possible sanctions which have been imposed for geopolitical reasons.




Geopolitics dominated headlines in 2023, as diplomacy played second fiddle to the militarization or weaponization of everything.

The biggest risk faced by businesses today is national security risk, in case companies or financial institutions are caught in geopolitical tit-for-tat arising from binary differences in values. Where national security is concerned, the business must bear all the costs of supply chain restructuring with no questions asked, or face possible existential shutdowns.

War broke out in Gaza/Israel In October with a scale of civilian slaughter more horrific and intense than the Ukraine war, which began in February 2022. The latest war count to June 2023 by The Armed Conflict Survey 2023 (1 May 2022–30 June 2023), showed global fatalities and events increasing horrendously by 14% and 28% respectively.



The authoritative Stockholm International Peace and Research Institute (SIPRI) reported that 56 countries were involved in armed conflict in 2022, 5 more than in 2021. Three (Ukraine, Myanmar and Nigeria) involved 10,000 or more estimated deaths, with 16 cases involving 1000–9999 deaths. Expect more conflicts when natural disasters hurt food, water and energy supplies.




As 100,000 or so delegates leave the United Arab Emirates at the end of the COP28 this month, the UN painted an upbeat tone that the Conference marked the “beginning of the end” of the fossil-fuel era.  Scientists confirm that we have already passed the point of being able to limit carbon emissions for the average global temperature to remain below 1.5 degrees Celsius above pre-industrial levels.   Most studies show that if most governments fail to meet their current commitments to NetZero, the planet will be struggling with temperatures above 2 degrees Celsius, meaning more natural disasters, rising seas and/or migration/conflicts.  Every three weeks, the US has experienced at least one natural disaster costing more than $1 billion in damages.  

As one cynic said, natural disasters are where the rich just pay in money, but the poor pay in their lives.

Putting all these mega-trend micro-disasters together suggests that a mega-system disaster may be on the cards. Historically, these seismic-scale disturbances are settled through a massive recession, like the 1930s Great Depression, or wars, which wipe out debt and make everyone poorer.

So far, the world has neglected to address these looming issues by either denying or postponement - printing more money and incurring more debt. Painkillers do not fix structural imbalances.

As my favourite poet TS Eliot said, the world ends not with a bang, but with a whimper. The world is in permacrises, with no one fully in charge. Democratic governance is in flux when no one can agree on the problems, let alone the solutions.

2024 will see some decisive but messy elections, especially in the US where both Presidential candidates may either be impeached or convicted by then. This cannot auger well for everyone, because 2023 marks the turning point when the US lost the respect of the Global South over its catastrophic handling of Ukraine and Gaza, both of which will be fought to the last Ukrainian or Palestinian. The morality of allowing other people to fight and die for one’s benefit shows not hypocrisy but hegemonic-scale cowardice.

The bottom line is that there is no shortage of technology or money to deal with the global existential threats of climate change and social imbalances. We cannot align policy intent (what politicians say they will do) with the reality that current policies are not delivering.

If man-made or natural calamities are looming, do we mitigate or adapt? On a single planet, we can run but not hide. So each of us must decide to do what we can, rather than relying on politicians to fix themselves, let alone our problems.

There is a wise saying about Christmas charity: give with warm hands. Do that now, or we will be giving with boiled hands or none at all.

Best wishes for 2024.

Andrew Sheng, Asia News Network



Wednesday, May 24, 2023

The Bankrupting of America

 




 

US debt ceiling impasse and a default’s impact on Malaysia remains a concern

 

US debt issue may affect global demand


PETALING JAYA: With the United States currently being embroiled in a debate as to whether it should raise its debt ceiling before the June 1 deadline, concerns over the impact on Malaysia of the world’s largest economy defaulting on its borrowings were understandably raised among certain quarters.

This is all the more relevant when one considers the fact that the United States is Malaysia’s third-largest trading partner, with World’s Top Exports reporting that Singapore, China, the United States, Japan and Hong Kong contributing to more than half of Malaysia’s export revenue – 51.8% to be exact – in 2022.

The website also revealed that the United States accounted for US$38bil (RM173.5bil) or 10.8% of Malaysia’s export income in 2021, again behind only Singapore at 15% and China 13.6%.

Thus, it is not difficult to understand the oft-used adage, “When the US sneezes, the world catches a cold”, including of course, Malaysia.

Chief economist for HSBC Global Research Frederic Neumann had remarked on Monday that should the debt ceiling issue be drawn out of proportion, it could lead to a depression of US growth, and adversely impact Malaysian exports stateside, possibly even reducing global demand because of an increase in financial uncertainty.

The current debt ceiling is known to be at US$31.4 trillion (RM143.4 trillion), and reports from yesterday indicated that a resolution could be imminent.

Shedding more light on the matter, Centre for Market Education chief executive Dr Carmelo Ferlito said the debt ceiling can be raised again, but only if it can be voted through the House of Representatives, which has a Republican majority.

“The Republicans are trying to use the deadline to pressure President Joe Biden to agree to spending cuts.

“On April 26, the House approved a bill to raise the debt limit by US$1.5 trillion (RM6.85 trillion), but only on the condition that spending would be cut to 2022 levels and then capped at 1% growth per year,” he told StarBiz.

A simple analogy to illustrate the ceiling standoff is the case of a parent providing a teenage child with a credit card.

If the teenager exceeds the spending limit, and asks the parent for an extension of credit, it is only natural for the parent to go over the spending habits of the child before deciding to provide more credit, which has to be repaid.

If the ceiling is not raised and the US officially defaults, Ferlito said the consequences for other economies – including Malaysia – should be looked at more in the light of a general financial turmoil that the default could cause rather than the more immediate link with American bonds that firms or governments may have. 

“We do not see direct repercussions on Malaysia; rather, we foresee indirect effects in case of (a US) default, coming from a global financial turmoil,

He explained: “We do not see direct repercussions on Malaysia; rather, we foresee indirect effects in case of (a US) default, coming from a global financial turmoil.

“If there is a default, which is doubtful, there will be a financial shock and the entity of such a shock will determine how much it would impact Malaysia.”

He elaborated that a potential default and its effect on an exporting country like Malaysia can be seen as two separate phenomena, a sovereign debt default; and the business relationship between private entities.

Ferlito added: “Even if the US defaults, private companies can still transact independently from the scale of the mutual business relationship. What we have to fear more are the indirect consequences.”

Economists at Coface Services South Asia-Pacific Pte Ltd, Bernard Aw and Eve Barre, believe a breach in the debt ceiling would result in outlay cuts currently funded with borrowing while the US dollar would weaken, elevating yields.

“Such a default would also have an impact on global financial markets, which rely on the dollar as the world’s primary reserve currency and as a safe asset.

“For Asian exporters, a weakening of the dollar against their currencies would dampen their competitiveness, including for Malaysia as the United States represents its third-largest export market up to 2022,” they told StarBiz.

Although acknowledging that a negative impact on the US economy from reducing public spending would depend on the extent of those cuts, they pointed out that if an agreement leads to deep spending decreases, economic growth for the United States could be slower than the already sluggish 1.2% that Coface is forecasting for 2023.

Aw and Barre opined: “This would have a direct impact on Malaysia by reducing US demand for Malaysian goods but also on foreign investment.

“In 2021, the United States was the first source of foreign direct investment flows to Malaysia, accounting for roughly a third of the total.”

On the flipside, they projected that sharp cuts in US public spending are unlikely to be approved by the Senate, as it is controlled by the Democrats.

Meanwhile, approaching the problem from an investment perspective, chief investment officer for Tradeview Capital, Nixon Wong, echoed the economic view that a US default would have global ripple effects, including on the FBM KLCI.

“A default on US federal debt would disrupt imports of electronics and manufactured goods from Chinese factories to the United States, resulting in slower growth of orders in the entire supply chain that includes Malaysia.

“Reduced spending in the United States would lead to slower aggregate demand and import growth globally,” he said.

The effect could likely be seen on export-oriented companies on the local bourse, he said, including manufacturers of electrical and electronic and rubber products, as well as in the producers of metal, optical and scientific equipment.

He added that although Malaysia’s trade volume with the United States may be smaller compared to China, the repercussions from reduced US spending would still impact Malaysia’s exports, whether directly or indirectly.

History has shown that American political leaders have always managed to raise the debt limit before it becomes a crisis, and it is likely that this pattern will continue, Wong said.

“While there are debates and partisan divisions in Congress, it is expected that Republicans will seek spending cuts before supporting the raising of the debt ceiling.

“After all, the main agenda is to prevent a catastrophic event or severe fallout in the United States and global financial markets,” he observed. 

By KEITH HIEW

Source link

 

US President Joe Biden touted that the debt-ceiling deal will help the US avoid economic collapse, but experts warn that the US debt-ceiling crisis is a systemic problem that will erupt periodically, and that rising US debt is severely undercutting the credit of US assets and status of the US dollar.

 

 

 US urged against passing risks to world amid growing chance of a US default

A Chinese official on Tuesday warned of the significant spillover effect of US domestic policies and urged Washington to avoid passing on domestic risks to the rest of the world just to protect its own interests. The comment came after US leaders failed to reach a deal on the debt ceiling issue, with the deadline to avert the first-ever default approaching rapidly.

 

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