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U.S. Donald Trump And China Xi Jinping To Meet In Argentina

In Trump's "America First" rhetoric and persistent criticism of the damaging effect he says Chinese trade practices have on America.

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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

U.S. President Donald Trump and China ‘s President Xi Jinping are expected to meet on the sidelines of the Group of 20 (G-20) summit in Argentina this week for what some see as the most important meeting in years between the leaders of the world’s two largest economies.

After months of bitter bickering between their governments over trade and security that has raised questions about the very future of a complex but economically pivotal relationship, the two leaders took a step back from the edge with an ice-breaking telephone call early this month.

They expressed optimism about resolving their damaging trade war ahead of the meeting on Saturday, but there have been few tangible signs of progress. They will be in Buenos Aires for the summit of the leaders of the 20 major economies.

China, USA
(Representational Image) FILE – In this April 29, 2015 file photo, visitors use a laptop computer at a display booth as a security guard stands nearby at the Global Mobile Internet Conference in Beijing. A coalition of international business groups has appealed to China in a letter dated Wednesday, Aug. 10, 2016 to change proposed cybersecurity rules they warn will harm trade and isolate the country. VOA

Even so, differences among Trump’s top advisers over China policy and his personal unpredictability and fondness for headline-grabbing moments mean it remains anyone’s guess what the Trump-Xi meeting might bring.

What caused the trade war?

Trump railed against the massive U.S. trade deficit with China during his 2016 election campaign and after a year in office, with no sign of the gap narrowing, the U.S. president attacked the issue head-on.

Trump has imposed tariffs on $250 billion worth of Chinese imports to force concessions on a list of demands that would fundamentally change the two countries’ terms of trade. China has responded with tariffs of its own on U.S. goods, targeting farm states that are an important part of Trump’s political base.

Trump has threatened tariffs on another $267 billion worth of Chinese products, including cell phones, computers, clothing and footwear. And 10 percent tariffs on $200 billion of Chinese goods are scheduled to rise to a more prohibitive 25 percent on Jan. 1, 2019 unless a truce is agreed.

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

Washington wants Beijing to act to reduce a $375 billion trade surplus by opening its economy to foreign competition, increasing protection for U.S. intellectual property, ending joint venture requirements that lead to technology transfers and cutting subsidies to state-owned industries.

It particularly wants to prevent exports to China of advanced technologies in areas such as artificial intelligence and robotics and has tightened rules on foreign investment in 27 sensitive sectors to stop Chinese deals.

The U.S. Justice Department recently charged China state-owned Fujian Jinhua Integrated Circuit Co with conspiring to steal trade secrets in what is expected to be the first of several similar cases to attempt to stop the flow of intellectual property into China.

U.S. officials say China has delivered a written response to U.S. demands for wide-ranging trade reforms, but they remain doubtful this will be enough to bring about a breakthrough when Xi and Trump meet.

How serious is the US-China security rivalry?

In the past 20 years China has grown rapidly to become arguably Washington’s biggest security rival, with defense spending that now far outstrips former Cold War rival Russia. A hundred years after the end of World War One, some academics have even warned of another “Thucydides Trap” – a theory that sees a risk of rivalry between a rising and an established power spiraling into open conflict.

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Chinese censors have erased online debate over US-China trade negotiations as the two countries appeared to back away from a trade war.

Recent years have seen a steady uptick in tensions, punctuated by U.S. naval and air patrols challenging China’s extensive claims in the South China Sea and U.S. warship movements through the highly sensitive Taiwan Strait.

While the two sides have taken care to maintain military-to-military contacts, close encounters have raised fears that an accidental clash could escalate into an unexpected conflict – particularly over Taiwan, which Beijing considers a wayward province and a “red line” not to be crossed.

Trump added new uncertainty when he said the United States would quit a Cold-War era treaty with Russia that has prevented Washington from stationing ground-based intermediate-range missiles in Asia as well as Europe.

In what was billed as a major policy speech on Oct. 4, U.S. Vice President Mike Pence escalated Washington’s trade-driven pressure campaign, highlighting Chinese military and industrial espionage activity and accusing China of “malign” efforts to undermine Trump in the Nov. 6 mid-term congressional elections. He offered no concrete evidence of that.

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Video: US-China Trade Talks End in an Impasse. (VOA)

Is the current trend reversible?

White House insiders say there remain substantial differences within the Trump administration over how far to push China.

Also Read: U.N. Food And Agriculture Organisation Renews Its Policy To Achieve ‘Zero Hunger’

This division groups anti-China hardliner and trade adviser Peter Navarro, U.S. Trade Representative Robert Lighthizer and those who favor a complete reevaluation of the relationship on one side. On the other are pragmatists led by White House chief economist Larry Kudlow and Treasury Secretary Steven Mnuchin, concerned about the harm deepening friction could do to the U.S. economy and markets.

In Trump’s “America First” rhetoric and persistent criticism of the damaging effect he says Chinese trade practices have on America, he has appeared to favor Navarro’s school of thought. But he has also shown himself very aware of the immediately positive effects any indication of an improved mood with Beijing can have on U.S. financial markets and his ratings for handling of the economy at a time when he is under fire on other domestic fronts. (VOA)

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‘Debt-Trap’ Ahead of Cambodian PM Visit to China Belt, Expert Alerts

China’s Embassy responded with a statement accusing the U.S. of “trying to stir things up again with the so-called trade deficit issue,” adding that bilateral relations are “not just about trade.”

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A woman uses a Chinese national flag to protect the sun as she listens to Prime Minister Hun Sen who delivering his speech during an inauguration ceremony of a sky bridge funded by China for its official use in Phnom Penh, Cambodia, Monday, July 2, 2018. In early July, Cambodia will begin its election campaigning for the 2018's general election. (AP Photo/Heng Sinith) RFA

Overdependence, coupled with loans and the cost of maintaining infrastructure, could leave Cambodia in a “debt trap” to China, an expert said Tuesday, as Cambodia’s Prime Minister Hun Sen prepares to attend a summit in Beijing on Chinese President Xi Jinping’s sweeping Belt and Road Initiative (BRI).

China will hold its second Belt and Road Forum for International Cooperation from April 25-27 to outline the implementation of the BRI, which aims to strengthen infrastructure, trade, and investment links between the Asian superpower and 154 countries and international organizations.

Hun Sen will join nearly 40 other heads of state and 150 global representatives at the event, where he will speak on “boosting connectivity to explore new sources of growth,” according to a statement issued on Monday by Cambodia’s Ministry of Foreign Affairs.

Last week, China’s economic planning agency said that the total trade volume between China and BRI nations had exceeded U.S. $6 trillion from 2013 to 2018, and that China has spent U.S. $80 billion in direct foreign investment in these countries.

Critics of the BRI say that China is using investment to push its own political agenda, and that nations involved in the initiative see their sovereignty undermined if they fall into a “debt-trap” that leaves them beholden to Beijing because they are unable to meet regular payments on loans and default.

Speaking to RFA’s Khmer Service, Carlyle A. Thayer, Emeritus Professor at the University of New South Wales, noted that Cambodia is already an estimated U.S. $3 billion in debt to China, and that it stands to take on further debt through the BRI.

“China provides most of overseas development assistance in the form of loans—these must be repaid,” Thayer said.

“In addition, although China finances major infrastructure projects that do contribute to Cambodia’s economic development, recurrent maintenance costs are left to the host country,” he added.

“Overdependence on China, coupled with loan repayments and maintenance costs, could result in Cambodia’s falling into the so-called debt trap … Chinese companies involved in providing infrastructure take possession of the infrastructure. This could hypothetically mean Chinese ownership of Cambodian ports and even airports.”

Under the BRI, China has pledged to invest in Cambodian agriculture, finance, special economic zone development, capacity building, culture and tourism, and environmental protection—though the lion’s share of funding will be set aside for infrastructure projects that include highways, bridges, ports, airports, and high-speed rail.

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Cambodian Minister of Information Khieu Kanharith accused the U.S. of releasing “fake news,” as part of a bid to drive Cambodia and China apart. Pixabay

‘No realistic alternative’

Thayer noted that Cambodia was an early backer of the initiative and said Hun Sen’s attendance at this week’s forum will reaffirm his nation’s support for the BRI, while adding political clout for China’s hosting of the event.

“Beijing expects nothing less and will continue to reward Cambodia by extending diplomatic and political support, continued economic engagement [such as aid, trade and investment], and defense cooperation,” he said.

As Cambodia’s largest trade partner, its most important foreign investor, and a major supplier of development aid, Thayer said the country “has no realistic alternative to dependence on China,” while Beijing benefits from maintaining a regional client it can count on to support its core interests.

Cambodia drew condemnation from Western trade partners and aid donors  after its Supreme Court dissolved the CNRP in November 2017, paving the way for Hun Sen’s ruling Cambodian People’s Party (CPP) to steamroll a general election in July last year widely seen as unfree and unfair.

China, which offered its full support of Hun Sen’s government following the election, typically offers funding without many of the prerequisites that the U.S. and EU place on donations, such as improvements to human rights and rule of law.

But Thayer said Cambodia’s government had “painted itself in a corner” by targeting its political opposition amid a wider crackdown that also included restrictions on NGOs and the independent media.

Since the election, the U.S. has announced visa bans on individuals seen as limiting democracy in the country, as part of a series of measures aimed at pressuring Cambodia to reverse course. The European Union, which was the second biggest trade partner of Cambodia in 2017, has said it will drop a preferential trade scheme for Cambodian exports based on the country’s election environment.

Comparing ties

Hun Sen’s planned visit to Beijing comes as the U.S. Embassy in Phnom Penh warned through social media that Cambodia’s relations with China had done little to create jobs in the country, when compared to its partnerships with the U.S.

“China is Cambodia’s largest trade partner, but this relationship is heavily skewed in China’s favor,” the post to the embassy’s Facebook page said.

“About 87 percent of trade are Chinese imports, which do not support jobs or industry in the same way Cambodia’s trade relationship with the United States or EU does. This is just one more way Cambodia has shifted from a more balanced and diverse economic approach to one more dependent on China.”

China’s Embassy responded with a statement accusing the U.S. of “trying to stir things up again with the so-called trade deficit issue,” adding that bilateral relations are “not just about trade.”

The statement noted that China had built nearly 40 highways and bridges for Cambodia and helped to construct every hydropower station in the country, while questioning how the U.S. had contributed.

Workers of China
“China is Cambodia’s largest trade partner, but this relationship is heavily skewed in China’s favor,” the post to the embassy’s Facebook page said. RFA

Cambodian Minister of Information Khieu Kanharith accused the U.S. of releasing “fake news,” as part of a bid to drive Cambodia and China apart.

“We want to build a good relationship with all countries, especially the U.S., but some individuals are trying to destroy this relationship because of their ignorance,” the minister wrote on social media.

Lack of transparency

On Tuesday, Koul Panha, director of local NGO Comfrel, told RFA that Chinese money is negatively impacting the people of Cambodia because of the way it is invested.

“Chinese investment in Cambodia lacks transparency and doesn’t help to promote democracy,” he said, adding that the loans have left Cambodia “under Chinese influence both economically and politically.”

Also Read: Rare Earth Metals in Smartphones Can Now Be Tracked

Chinese investment has flowed into Cambodian real estate, agriculture and entertainment—particularly to the port city of Sihanoukville—but Cambodians regularly chafe at what they say are unscrupulous business practices and unbecoming behavior by Chinese residents, and worry that their country is increasingly bending to Beijing’s will.

Trade volume between Cambodia and China was valued at U.S. $5.8 billion in 2017, up 22 percent from U.S. $4.76 billion dollars a year earlier. China, Cambodia’s largest investor, has poured U.S. $12.6 billion into the Southeast Asian nation from 1994 to 2017. (RFA)