Saturday December 7, 2019
Home Lead Story The Escalatin...

The Escalating Trade War Between China And U.S. Calls A Truce

Xi also expressed sympathies for the passing of the former president, saying Bush, who also was once the U.S. envoy to China.

0
//
USA, China,
President Donald Trump with China's President Xi Jinping during their bilateral meeting, Dec. 1, 2018 in Buenos Aires, Argentina. VOA

The world’s two largest economies have agreed to a small truce in their escalating trade war after a meeting between presidents U.S Donald Trump and China Xi Jinping following the G-20 summit.

“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” Trump said in a statement released as he flew back to the United States from Argentina on Air Force One. “It is my great honor to be working with President Xi.”

Trump told reporters aboard Air Force One as he flew back to Washington, “It’s an incredible deal. What I’ll be doing is holding back on tariffs. China will be opening up, China will be getting rid of tariffs. China will be buying massive amounts of products from us.”

Trump agreed that he will leave the tariffs on $200 billion worth of Chinese products at the 10 percent rate, and not raise it to 25 percent, for now, as he has threatened to do come Jan. 1, according to a White House statement.

USA, China, Trade War
Mike Starkey offloads soybeans from his combine as he harvests his crops in Brownsburg, Indiana, Sept. 21, 2018. China has agree to immediately U.S. agricultural products again in a trade war truce struck Dec. 1, 2018. VOA

“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial and other product from the United States to reduce the trade imbalance between our two countries,” said White House Press Secretary Sarah Sanders. “China has agreed to start purchasing agricultural product from our farmers immediately.”

Trump and Xi also “agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, according to the White House statement. “Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.”

Some of the details were echoed by Chinese Foreign Minister Wang Yi, who confirmed that both countries will step up negotiations.

The news is likely to bring cheer Monday to global financial markets, which have been sensitive to the escalating trade battles between China and the United States.

USA, China, Trade War
Plastic bags of fentanyl are displayed at the U.S. Customs and Border Protection area at the International Mail Facility at O’Hare International Airport in Chicago. VOA

Fentanyl designation

At the dinner, Xi also agreed to designate fentanyl as a controlled substance, meaning that people selling the powerful opioid to the United States will be subject to China’s maximum penalty under the law.

The White House is calling the Chinese president’s decision a “wonderful humanitarian gesture.”

Trump, sitting across from Xi at a long banquet table, described their relationship as “incredible” and predicted that would mean “we’ll probably end up getting something that’s good for China and good for the United States.”

In his remarks, the Chinese president noted, “it’s been a long time since our previous meeting and a lot of things have taken place.”

Xi added, “Only with cooperation between us can we serve the interest of world peace and prosperity.”

TradeWar, China, USA
Many major business leaders in both the United States and China had hoped for some sort of truce.

G-20 summit concludes

The 2½-hour meal, which was moved up an hour earlier than its original start time following the conclusion of the G-20 leaders’ meeting here, included a group of top officials from both sides.

Among those at the table for the United States: Trade policy adviser Peter Navarro, seen as the most hawkish member of Trump’s team when it comes to economic issues with China. The other key attendees for the U.S., according to the White House, were Secretary of State Mike Pompeo, Treasury Secretary Steven Mnuchin, White House Chief of Staff John Kelly, U.S. Trade Representative Robert Lighthizer, National Security Adviser John Bolton, the president’s son-in-law Jared Kushner (who is a senior adviser) and Larry Kudlow, assistant to the president for economic policy.

Fears of no progress

Many major business leaders in both the United States and China had hoped for some sort of truce or partial deal in what is seen as an escalating trade dispute between the world’s two largest economies.

Despite months of complaints by the United States and the U.S. imposing tariffs on about $250 billion worth of Chinese goods, Beijing “has not fundamentally alerted its unfair, unreasonable, and market-distorting practices,” according to a report issued last week by Lighthizer.

China, USA, Trade War
U.S. President Donald Trump and Chinese President Xi Jinping participate in a welcome ceremony at the Great Hall of the People in Beijing, China. VOA

Observers feared that if no progress was made at the Trump-Xi dinner, the U.S. president would make good on his threat to double the amount of Chinese goods facing punitive taxes, and escalate tariffs to a 25 percent level at the start of the new year.

China, in response, had been threatening to impose taxes on an additional 5,000 types of American imports worth about $60 billion.

WTO reform

“I think the worst of it is that the conflict between China and the U.S. is again showing the limits of multilateral institutions, in particular the World Trade Organization,” Roberto Bouzas, an international relations and economics professor at the Universidad de San Andres, told VOA.

In its communique Saturday at the conclusion of the leaders’ summit, the G-20 called for reform of the WTO to improve its functioning and said the group would review progress made by the trade organization at next year’s summit in Japan.

“For the first time ever, the G-20 recognized the WTO is currently falling short of meeting its objectives and that it’s in need of reform,” a U.S. official, speaking on condition of not being named, told reporters.

China, USA, Trade war
Secretary Kerry Touts Virtues of 10-Year U.S.-China Business and Tourism Visas Before Presenting First Documents in Beijing, flickr

“We’ll see what reactions we get in the next few months,” to the WTO reform call in the communique, G-20 host Mauricio Macri, the president of Argentina, told reporters, adding, “there is clearly a need for dispute mechanisms that are more agile.”

No press conference

Earlier in the day, Trump canceled a planned news conference, saying the timing was not right because of the death of former U.S. President George H.W. Bush at the age of 94.

“He was a terrific guy and he’ll be missed. He lived a full life and an exemplary life,” Trump said of the late president. He did not respond to a reporter’s question about whether he regrets his past criticism of the 41st president, and his son, George W. Bush, who was the 43rd president.

“The fact that we lost a president really puts a damper on it,” Trump said of Saturday evening’s dinner.

At the table, Trump announced his plane would fly to Houston, in the state of Texas, after the return of Air Force One from Argentina, to transport Bush’s casket to Washington.

Also Read: USA Finally votes On Tuesday To Render Decision On Trump

During the meal, Xi also expressed sympathies for the passing of the former president, saying Bush, who also was once the U.S. envoy to China, had “made many contributions to U.S.-China friendship.”

Xi, according to the White House, also told Trump he is open to approving the previously unapproved $44 billion bid by American semiconductor and telecommunication equipment manufacturer Qualcomm to purchase Dutch semiconductor maker NXP should the deal again be presented to him.

The acquisition collapsed four months ago after Chinese regulators expressed anti-trust concerns. (VOA)

Next Story

China- Top Contributor in Global Warming

China is the leader in coal and clean energy and is the top emitter of greenhouse gases

0
Climate China Coal
In this photo, smoke and steam rise from a coal processing plant that produces carbon black, an ingredient in steel manufacturing, in Hejin in central China. VOA

As world leaders gather in Spain to discuss how to slow the warming of the planet, a spotlight falls on China — the top emitter of greenhouse gases.

China burns about half the coal used globally each year. Between 2000 and 2018, its annual carbon emissions nearly tripled, and it now accounts for about 30% of the world’s total. Yet it’s also the leading market for solar panels, wind turbines and electric vehicles, and it manufactures about two-thirds of solar cells installed worldwide.

“We are witnessing many contradictions in China’s energy development,” said Kevin Tu, a Beijing-based fellow with the Center on Global Energy Policy at Columbia University. “It’s the largest coal market and the largest clean energy market in the world.”

That apparent paradox is possible because of the sheer scale of China’s energy demands.

But as China’s economy slows to the lowest level in a quarter century — around 6% growth, according to government statistics — policymakers are doubling down on support for coal and other heavy industries, the traditional backbones of China’s energy system and economy. At the same time, the country is reducing subsidies for renewable energy.

China solar panel
A solar panel installation is seen in Ruicheng County in central China. VOA

At the annual United Nations climate summit, this year in Madrid, government representatives will put the finishing touches on implementing the 2015 Paris Agreement, which set a goal to limit future warming to 1.5 to 2 degrees Celsius above pre-industrial levels. Nations may decide for themselves how to achieve it.

China had previously committed to shifting its energy mix to 20% renewables, including nuclear and hydroelectric energy. Climate experts generally agree that the initial targets pledged in Paris will not be enough to reach the goal, and next year nations are required to articulate more ambitious targets.

Hopes that China would offer to do much more are fading.

Recent media reports and satellite images suggest that China is building or planning to complete new coal power plants with total capacity of 148 gigawatts — nearly equal to the entire coal-power capacity of the European Union within the next few years, according to an analysis by Global Energy Monitor, a San Francisco-based nonprofit.

Separately, investment in China’s renewable energy dropped almost 40 percent in the first half of 2019 compared with the same period last year, according to Bloomberg New Energy Finance, a research organization. The government slashed subsidies for solar energy.

Last week in Beijing, China’s vice minister of ecology and environment told reporters that non-fossil-fuel sources already account for 14.3% of the country’s energy mix. He did not indicate that China would embrace more stringent targets soon.

“We are still faced with challenges of developing our economy, improving people’s livelihood,” Zhao Yingmin said.

China is alternately cast as the world’s worst climate villain or its potential clean-energy savior, but both superlatives are somewhat misplaced.

As a fast-growing economy, it was always inevitable that China’s energy demands would climb steeply. The only question was whether the country could power a sufficiently large portion of its economy with renewables to curb emissions growth.

Many observers took hope from a brief dip in China’s carbon emissions between 2014 and 2016, as well as Chinese leader Xi Jinping’s statement in 2017 that China had “taken a driving seat in international cooperation to respond to climate change.”

Renewed focus on coal

Today the country’s renewed focus on coal comes as a disappointment.

China Pollution
The pollution in China is at extreme levels. VOA

“Now there’s a sense that rather than being a leader, China is the one that is out of step,” said Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air in Helsinki. He notes that several developed countries — including Germany, South Korea and the United States — are rapidly reducing their reliance on coal power.

Fossil fuels such as coal, gasoline and natural gas release carbon dioxide into the atmosphere, trapping heat and changing the climate. Coal is the biggest culprit.

Last year, coal consumption in the United States hit the lowest level in nearly 40 years, according to the U.S. Energy Information Administration.

One place to consider the rise, pause and rise again of China’s coal sector is Shanxi province — a vast mountainous region in central China.

Shanxi is the heart of China’s traditional coal country, dotted with large mines, but also the site of some of the country’s largest solar and wind-power projects, according to state media.

During most of the past 30 years of rapid economic growth, the coal business boomed in Shanxi and nearby provinces. As China’s cities and industries expanded, coal supplied much of that power, and China surpassed the U.S. as the world’s top carbon emitter in 2006.

But after climbing sharply for two decades, China’s emissions stalled around 2013 and then declined slightly in 2015 and 2016, according to Global Carbon Budget, which tracks emissions worldwide. This dip came as Chinese leaders declared a “war on pollution” and suspended the construction of dozens of planned coal power plants, including some in Shanxi.

At the same time, the government required many existing coal operators to install new equipment in smokestacks to remove sulfur dioxide, nitrous oxide and other hazardous substances. About 80% of coal plants now have scrubbers, said Alvin Lin, Beijing-based China climate and energy policy director for the Natural Resources Defense Council, a nonprofit.

Climate change China
This coal processing plant in China produces toxic air pollutants. VOA

As a result, the air quality in many Chinese cities, including Beijing, improved significantly between 2013 and 2017. Residents long accustomed to wearing face masks and running home air-filter machines enjoyed a reprieve of more “blue sky days,” as low-pollution days are known in China.

Annual levels of PM 2.5 — a tiny but dangerous pollutant — dropped by roughly a third across China between 2013 and 2017, from 61.8 to 42 micrograms per cubic meter, according to scientists at Beijing’s Tsinghua University and other institutions. They made the report in November in the Proceedings of the National Academy of Sciences, a peer-reviewed journal.

“That’s a big improvement, although in terms of safe air quality, we’re still not there yet,” Lin said. China’s pollution levels are still well above standards set by the World Health Organization.

While these retrofitted coal plants emit fewer pollutants that harm human health, the scrubbers do not reduce greenhouse gases. “The new plants are good for air quality, but you still have all that carbon dioxide that goes into the atmosphere,” Lin said.

Carbon emissions rising

In the past three years, China’s carbon emissions have begun to rise again, according to Global Carbon Budget.

That trend was evident in the first half of 2019, when China’s carbon emissions from fossil fuels and concrete production rose 4%, compared with the same period last year, according to Myllyvirta’s preliminary analysis of Chinese government data.

The coming winter in Beijing may see a return of prolonged smog, as authorities loosen environmental controls on heavy industry — in part to compensate for other slowing sectors in the economy. Cement and steel production remain both energy intensive and heavily polluting.

Permits for new coal plants proliferated after regulatory authority was briefly devolved from Beijing to provincial governments, which see construction projects and coal operations as boosts to local economies and tax bases, said Ted Nace, executive director of Global Energy Monitor.

“It’s as though a boa constructor swallowed a giraffe, and now we’re watching that bulge move through the system,” said Nace. In China, it takes about three years to build a coal plant.

In November, Premier Li Keqiang gave a speech to policymakers emphasizing the importance of domestic coal to energy security.

But because China’s coal-power expansion is growing faster than energy demand, overcapacity “is a serious concern now,” said Columbia University’s Tu.

And once new infrastructure is built, it’s hard to ignore.

People in China
The highest red alert was issued for heavy smog in several cities in China. VOA

“It will be politically difficult to tear down a brand-new coal plant that’s employing people and supporting a mining operation. It will make it more difficult for China to transition away from coal,” Nace said.

Reliance on China

The world has already warmed by 1 degree Celsius. All scenarios envisioned by the Intergovernmental Panel on Climate Change for holding planetary warming to around 1.5 degrees Celsi