Swordsmyth
07-04-2018, 08:24 PM
China has proposed a novel idea: to form an alliance with the EU - the world's largest trading block - against the US, while promising to open up more of China's economy to European corporations. The idea was reportedly floated in meetings in Brussels, Berlin and Beijing, between senior Chinese officials, including Vice Premier Liu He and the Chinese government’s top diplomat, State Councillor Wang Yi, according to Reuters (https://www.reuters.com/article/us-usa-trade-china-eu-exclusive/exclusive-china-presses-europe-for-anti-u-s-alliance-on-trade-idUSKBN1JT1KT). Willing to use either a carrot or a stick to achieve its goals, in these meetings China has been putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit later this month.
However, perhaps because China's veneer of the leader of the free trade world is so laughably shallow - China was and remains a pure mercantilist power, whose grand total of protectionist policies put both the US and Europe to shame - the European Union has outright rejected any idea of allying with Beijing against Washington ahead of a Sino-European summit in Beijing on July 16-17.
Instead, in the tradition of every grand, if ultimately worthless meeting of the G-X nations, the summit is expected to produce a "modest communique", which affirms the commitment of both sides to the multilateral trading system and promises to set up a working group on modernizing the WTO. Incidentally, the past two summits, in 2016 and 2017, ended without a statement due to disagreements over the South China Sea and trade.
Then there is China's "free-trade" reputation: a recent Rhodium Group report showed that Chinese restrictions on foreign investment are higher in every single sector save real estate, compared to the European Union, while many of the big Chinese takeovers in the bloc would not have been possible for EU companies in China. And while China has promised to open up, EU officials expect any moves to be more symbolic than substantive.
Almost as if behind the facade of smiles and agreement, Europe has absolutely no belief that Beijing will ever follow through with its promises.
In other words, not even when faced with the specter of a full-blown trade war, is Europe willing to terminally alienate the world's biggest buying power: the US consumer, in exchange for some vague promises for "open trade" from Beijing.
“China wants the European Union to stand with Beijing against Washington, to take sides,” one European diplomat told Reuters. “We won’t do it and we have told them that.”
But why does Europe - which has so staunchly publicized its disagreement with Trump's policies - refuse to align with China? Simple: behind closed doors it admits that Trump's complaints about Beijing are, drumroll, spot on.
Despite Trump’s tariffs on European metals exports and threats to hit the EU’s automobile industry, Brussels shares Washington’s concern about China’s closed markets and what Western governments say is Beijing’s manipulation of trade to dominate global markets.
“We agree with almost all the complaints the U.S. has against China, it’s just we don’t agree with how the United States is handling it,” another diplomat told Reuters.
And while Europe's position is understandable, if hypocritical - after all if it believes that Trump's approach to dealing with an ascendant China is the right one, why not just say it - the attention will shift to China, and the admission that Beijing is terrified about the consequences of a full blown trade war.
As Reuters notes, China’s stance is striking given Washington’s deep economic and security ties with European nations. It shows the depth of Chinese concern about a trade war with Washington, as Trump is set to impose tariffs on billions of dollars worth of Chinese imports on July 6.
More at: https://www.zerohedge.com/news/2018-07-04/europe-turns-down-chinese-offer-grand-alliance-against-us
However, perhaps because China's veneer of the leader of the free trade world is so laughably shallow - China was and remains a pure mercantilist power, whose grand total of protectionist policies put both the US and Europe to shame - the European Union has outright rejected any idea of allying with Beijing against Washington ahead of a Sino-European summit in Beijing on July 16-17.
Instead, in the tradition of every grand, if ultimately worthless meeting of the G-X nations, the summit is expected to produce a "modest communique", which affirms the commitment of both sides to the multilateral trading system and promises to set up a working group on modernizing the WTO. Incidentally, the past two summits, in 2016 and 2017, ended without a statement due to disagreements over the South China Sea and trade.
Then there is China's "free-trade" reputation: a recent Rhodium Group report showed that Chinese restrictions on foreign investment are higher in every single sector save real estate, compared to the European Union, while many of the big Chinese takeovers in the bloc would not have been possible for EU companies in China. And while China has promised to open up, EU officials expect any moves to be more symbolic than substantive.
Almost as if behind the facade of smiles and agreement, Europe has absolutely no belief that Beijing will ever follow through with its promises.
In other words, not even when faced with the specter of a full-blown trade war, is Europe willing to terminally alienate the world's biggest buying power: the US consumer, in exchange for some vague promises for "open trade" from Beijing.
“China wants the European Union to stand with Beijing against Washington, to take sides,” one European diplomat told Reuters. “We won’t do it and we have told them that.”
But why does Europe - which has so staunchly publicized its disagreement with Trump's policies - refuse to align with China? Simple: behind closed doors it admits that Trump's complaints about Beijing are, drumroll, spot on.
Despite Trump’s tariffs on European metals exports and threats to hit the EU’s automobile industry, Brussels shares Washington’s concern about China’s closed markets and what Western governments say is Beijing’s manipulation of trade to dominate global markets.
“We agree with almost all the complaints the U.S. has against China, it’s just we don’t agree with how the United States is handling it,” another diplomat told Reuters.
And while Europe's position is understandable, if hypocritical - after all if it believes that Trump's approach to dealing with an ascendant China is the right one, why not just say it - the attention will shift to China, and the admission that Beijing is terrified about the consequences of a full blown trade war.
As Reuters notes, China’s stance is striking given Washington’s deep economic and security ties with European nations. It shows the depth of Chinese concern about a trade war with Washington, as Trump is set to impose tariffs on billions of dollars worth of Chinese imports on July 6.
More at: https://www.zerohedge.com/news/2018-07-04/europe-turns-down-chinese-offer-grand-alliance-against-us