BBC News – What could China do in a US trade war?

Karishma Vaswani, Asia business correspondent

Washington DC-USA, 24 January 2018. President Trump’s backing for slapping tariffs on imports of washing machines and solar panels will hit China and South Korea hardest.

And it has opened up the prospect of some retaliation, especially from Beijing.

The hardline Chinese publication Global Times says “nothing good” would come out of a trade war with President Trump, and has warned that China could fight back.

There’s lots at stake. The two countries did $578.6bn worth of trade in 2016.

And by the US government’s own estimates that trade supports just under a million American jobs.

So what could China do? Well here are a few options:

1) File complaints to the World Trade Organisation

China says the US tariffs are bad for global trade and has already said that it will work with other WTO members to defend itself.

Of course there will be plenty in Washington who won’t miss the irony of China, much-maligned for its own trade practices, complaining that it is being hard done by.

2) Limit US beef imports

Last May, the US and China signed a deal to allow, amongst other things, the resumption of US beef exports to China after 14 years.

But there are specific requirements from the Chinese that US beef companies need to adhere to.

Although trade has barely just begun, China could raise these health and safety standards and make life far more difficult for the US beef exporting businesses that are looking to capitalise on middle class Chinese consumers.

3) Tell Chinese customers not to buy American cars

China is the world’s biggest passenger car market. By 2022 it will contribute to over half of the world’s car growth.

China is also consistently among the top five export markets for US cars and car parts, so a directive from the government to stop buying American cars out of loyalty to the Chinese state would hurt US manufacturers.

It’s not unheard of for Beijing to dictate how Chinese consumers spend their money.

Korean retailer Lotte Mart for example, suffered massive losses in China because of the Beijing-Seoul spat over a US anti-missile system.

4) Tell tourists to stop visiting the US

China is the world’s leading outbound tourist market, with more than 130 million Chinese people travelling around the world each year, a number that just keeps rising.

They spend something like $260bn (£185.2bn) a year when they travel, and while the most popular Chinese tourist spots tend to be in Asia, the US has also benefited.

Chinese tourists are projected to spend $450bn on holidays and shopping overseas by 2025, so the US could lose out if Beijing says America is an unsavoury place to travel to.

5) Sell some US bonds

China owns more than a $1tn of US debt.

It has threatened to sell US Treasuries before, and many have worried that this level of debt could mean that Beijing has leverage over the US economy.

But the truth is even if China did sell US debt, it would most likely be picked up by other countries.

But will anything happen?

The reality is China doesn’t want a trade spat to escalate into a more damaging confrontation.

If a trade war between the two countries does escalate, it won’t just be Beijing and the USA losing out.

The wider Asian region could suffer too, simply because of how integrated global supply chains are.

But we might well be just days away from more tariffs, with President Trump to soon decide whether to slap extra duties on steel and aluminium imports. China is the world’s largest producer of both.

Then there’s the intellectual property theft investigation against China, or Section 301, the findings of which should be released soon.

Now, as I’ve said before, President Trump hasn’t really been as hard on China as he said he would during his election campaign, partly because he needs Beijing onside to help push North Korea into giving up its aggressive nuclear strategy.

But with more pressure coming from the voters who elected him, the Republican base, and mid-terms this year – President Trump could decide that now’s the time to finally push his ‘America first’ policy through.

@BBCKarishma on Twitter


The Hindustan Times – Doklam is part of China, learn lessons from standoff: PLA to India

Troops from India and China were locked in a 73-day standoff in Doklam during June-August last year after Indian forces stopped the construction of a road by the Chinese Army in the disputed area.

Sutirtho Patranobis

Beijing-China, 26 January 2018. The Chinese military on Thursday criticised the Indian Army chief’s remarks referring to Doklam as disputed territory and warned India to learn “lessons” from last year’s standoff near the Sikkim border so that similar incidents do not occur in future.

In its first response to General Bipin Rawat’s remarks on the standoff, the People’s Liberation Army contended Doklam or Donglang is part of China. The PLA also said Rawat’s comments showed Indian troops had illegally crossed into Donglang.

The 73-day standoff had pitted border troops from the two countries against each other from June to August-end. It ended when both sides agreed to pull back their forces from the area that is under Chinese control but claimed by Bhutan.

“I have noticed many of the Indian journalists’ remarks (on Rawat’s comments). Donglang is part of China and the remarks of the Indian side also shows the illegal border crossing of the Indian troops is clear in fact and nature,” Senior Colonel Wu Qian, a spokesperson for the PLA and the defence ministry, told a conference.

“We hope the Indian side will draw lessons from the incident to avoid similar incidents (being) repeated in the future,” he said.

The PLA reacted to Rawat’s comments earlier this month while responding to a question from the Chinese media.

“The PLA of China has occupied the area in the west of Torsa nullah called northern Doklam. At the actual spot, the two sides have disengaged. The tents remain. The observation posts remain. This is a territory disputed between Bhutan and China,” Rawat had said on January 12 on the eve of Army Day.

“The issue was that we had actually stepped into territory that wasn’t ours. And when you step into a territory which is not yours, the ministry of external affairs comes in. It is not that you have stepped into your territory, but into territory which either belonged to China or to Bhutan. It didn’t belong to us,” he had said.

Rawat had suggested India needs to shift focus from its border with Pakistan to the Chinese frontier. He also suggested that India needs to take along its other neighbours.

The PLA spokesperson referred to this remark and said: “Apart from this, I also want to emphasise that countries should be treated regardless of (their) size. The concept of the sphere of influence is a demonstration of the Cold War mentality which the Chinese side is always opposed to.”

Earlier, the foreign ministry had criticised Rawat’s remarks, describing them as “unconstructive”.

“Last year, India-China relations have witnessed some twists and turns,” foreign ministry spokesperson Lu Kang said. “The dialogue and consultation (between the leaders of the two countries) have shown sound momentum of improvement and development.

“Under such background, the unconstructive remarks by the Indian senior official not only go against the consensus reached by the two heads of state but also do not conform to the efforts made by the two sides to improve and develop bilateral relations,” Lu said, adding the remarks cannot help to preserve tranquillity and peace at the border.

The Hindu – Tibetan leader cautions India against China’s ‘Doklam plans’

Special Correspondent

New Delhi-India, 18 January 2018. India should be worried about China’s continued military build up in Doklam, said Lobsang Sangay, president of the Central Tibetan Administration in India.

Dr Sangay made his observations on the Doklam issue while announcing the upcoming events to mark the 60th anniversary of the arrival of the Dalai Lama and Tibetans in India.

“India has to be cautious about China’s plans in Doklam. China has traditionally maintained that Tibet is the palm and the five fingers are Bhutan, Nepal, Arunachal [Pradesh], Ladakh and Sikkim. Therefore its actions in the Doklam region should be taken seriously,” Dr Sangay said.

Dr Sangay announced that the Tibetan community in India will hold a major inter-religious event in New Delhi to commemorate March 31, 1959 arrival of the Dalai Lama in India. “We expect a representative of the Indian government to attend the event,” he said.

The Tibetan leader pointed out that Bhutan should also express concern about the Doklam situation. “Going to the UN is definitely one of the options for Bhutan,” he said.

The Statesman – Doklam ‘severely’ strained India-China ties: Wang told Sushma

Beijing-China, 12 December 2017. At his meeting with Indian External Affairs Minister Sushma Swaraj, Chinese Foreign Minister Wang Yi said that the military stand-off in Doklam had put a “severe” strain on bilateral ties.

The Chinese Foreign Ministry on Tuesday released a statement detailing what Wang told Sushma Swaraj during their bilateral meet in New Delhi where the Chinese leader attended the Russia, India and China trilateral meet.

According to the statement, Wang also said that lessons should be learned from Doklam crisis so that it does not happen again even though the crisis was resolved peacefully.

“The viciousness caused by the cross-border infiltration of the Indian border guards put bilateral relations under severe pressure.

“The matter was finally settled peacefully through diplomatic means, reflecting the maturing of bilateral relations. However, lessons should be learned and (it) should not happen again,” Wang was quoted as saying.

“In 2017, relations between China and India have maintained their momentum of development as a whole. Both sides have made efforts in this regard, but they are not very satisfactory,” the Foreign Minister said.

The armies of both countries were locked in a 73-day stand-off at Doklam in the Sikkim section of Sino-Indian border over the building of a road by the Chinese military in the area that is claimed by Bhutan.

Indian troops stalled the work citing the disputed status of Doklam and its proximity to its key artery in the northeast. The crisis was resolved on August 28 after both the armies retreated from the point of the face-off.

It was Wang’s first visit to India since the Doklam crisis.

“The leaders of the two countries pointed out that both China and India should regard each other as partners rather than adversaries.”

Wang said that Sino-India relations were at a crucial period and the most important thing between them should be to cultivate mutual trust.

“With mutual trust, the specific problems are expected to be resolved on the basis of mutual understanding and mutual accommodation.

“Without mutual trust, individual problems will continue to overflow and erode the overall situation of bilateral relations.

“To this end, both sides should strengthen strategic communication at all levels, restore the established dialogue mechanism, deepen pragmatic cooperation in various fields and at the same time control the existing differences and safeguard peace and tranquility in the border areas.

“If China and India speak with one voice, the world will listen. I hope this day will come soon,” Wang was quoted as saying.

The Hindu – A day in Delhi for Ghani and Tillerson

The visits will provide India opportunity to hold talks on crucial regional and security-related issues

Special Correspondent

New Delhi. 20 October 2017. Continuing with close bilateral consultation, Afghanistan’s President Ashraf Ghani will visit India on October 24. The official confirmation about the visit came even as the Ministry of External Affairs reiterated India’s commitment to ‘rule-based international order’, setting the stage for the visit of USA Secretary of State Rex Tillerson to the capital on the same day.

The visit by President Ghani comes within days of a visit to Kabul by National Security Adviser Ajit Doval and Thursday’s Taliban attack on the Afghan National Army base in Kandahar province that killed at least fifty-eight security personnel.

When asked about the details of the Afghan leader’s agenda, an MEA official source said that the visit was being “worked upon” and a statement on the agenda would be made soon.

Mr Ghani’s visit, which is likely to last for half-a-day, is significant as it comes two-months after USA President Donald Trump announced his government’s new Afghanistan policy for which he has urged India to do more.

Crucial talks

The visits of Mr Ghani and Mr Tillerson to Delhi indicate that they will provide all three, the USA, Afghanistan and India, the opportunity to hold talks on crucial regional and security-related issues.

Indicating at India’s stance to Mr Tillerson’s visit, MEA spokesperson Raveesh Kumar said, “We appreciate his positive evaluation of the relationship and share his optimism about its future directions. We look forward to welcoming him in India next week for detailed discussions on further strengthening of our partnership.”

The Ministry’s statement was a response to Mr Tillerson’s October 18 comments at the Centre for Strategic and International Studies (CSIS), Washington DC, where he highlighted his two decades-long personal ties with India and said:

Centre of gravity

“The world’s centre of gravity is shifting to the heart of the Indo-Pacific. The USA and India, with our shared goals of peace, security, freedom of navigation, and a free and open architecture, must serve as the eastern and western beacons of the Indo-Pacific.”

Mr Tillerson had also pointed out that China’s rise as an international power had been “less peaceful”. The Asia-Pacific component of the visit will unfold soon after the latest congress of the Communist Party of China which led to the consolidation of power of President Xi Jinping and his re-election for one more term.

The Hindu – Doklam, Rohingya issue to be examined by parliamentary panel

New Delhi-India, 11 October 2017. The 73-day Doklam standoff and the Rohingya issue will be examined by the Parliamentary Committee on External Affairs headed by Congress MP Shashi Tharoor. The panel, which also includes Congress vice-president Rahul Gandhi, will deliberate on a number of key foreign policy issues next month, one of its members said.

Sino-Indian relations, including the border situation and the Doklam stand-off, relations with Myanmar and the Rohingya issue are among subjects selected by the panel for deliberations, according to the Lok Sabha bulletin.

Voting rights to NRIs, the crisis of the European Union in the wake of Brexit and its implications for India and performance of passport issuance system including issuance of e-passport are topics for discussions shortlisted by the panel for its year—long agenda.

Foreign Secretary S. Jaishankar had in July briefed the panel on the Doklam stand-off.

India and China had in August struck a deal to pull back from their most serious face-off in two decades. The development had come a week before the BRICS summit in China which was attended by the Prime Minister Narendra Modi.

The Hindu – Nirmala Sitharaman surveys Doklam, Nathula

Review comes amid reports of significant Chinese presence not far from Doklam standoff point

Special Correspondent

Gangtok-Sikkim-India, 8 October 2017. Defence Minister Nirmala Sitharaman on Saturday made an aerial survey of the Doklam-Nathula stretch and reviewed the situation along the India-China border. The review comes in the face of reports of significant Chinese presence not very far from the Doklam standoff point.

Army sources said Ms Sitharaman, accompanied by the Vice-Chief of the Army Staff, Lieutenant-General Sarath Chand, reviewed the operational situation during her first visit to the area as the Defence Minister.

The visit comes just a couple of days ahead of a week-long biannual Army Commanders’ Conference in New Delhi, where the dominant subject would be recent developments along the China border and the situation within Kashmir and along the Pakistan border.

High alert

Both India and China have been maintaining a higher number of troops than normal near the tri-junction with Bhutan. The two countries are on a higher state of alert ever since the Doklam standoff.

The Defence Minister was briefed on the situation at the Gangtok-based 17 Mountain Division, which has four brigades and is responsible for the security at the tri-junction.

She will interact with the Army Commanders when they assemble for the conference.

India and China had been engaged in a two-month standoff in Doklam from mid-June to August 28. While the troops disengaged, China continues to have a sizeable presence a few hundred metres away, with stores and new bunkers.

Sources have spoken about China carrying out the overlay of a road leading towards the Doklam area, but within their territory.

The Hindu – Foreign Secretary in Bhutan amid reports of Bhutan-China tension

Jaishankar’s visit came in the backdrop of reports that China is amassing troops near Bhutan’s Doklam plateau and other areas

Special Correspondent

New Delhi, 4 October 2017. Foreign Secretary S Jaishankar met with Bhutan’s king Jigme Khesar Namgyel Wangchuk on Tuesday and will hold several meetings on Wednesday with officials in Thumphu, officials have confirmed.

Mr Jaishankar’s visit came in the backdrop of reports that China is amassing troops near Bhutan’s Doklam plateau and other areas, barely a month after a standoff with India ended at the Doklam plateau.

Reports suggested that Chinese troops entered disputed zones of Bhutan-China border in a few places over the last week. During the Doklam crisis, Bhutan had maintained a cautious position indicating that it would allow diplomacy to take its course in the tricky border issue.

During the visit, Mr Jaishankar is likely to hold talks with Foreign Minister Damcho Dorjee and Prime Minister Tshering Tobgay.

The visit is the first by the Indian Foreign Secretary following the resolution of the last round of tension between Indian and Chinese troops at Doklam where a 72-day standoff ended on August 28.

Bilateral ties between India and China are not yet normal as the People’s Liberation Army (PLA) of China did not invite representatives of the Indian army for the annual border personnel meeting (BPM) to mark the Chinese National Day on October 1.

China did not attend a similar meeting to mark the Independence Day celebrations on August 15 as it was overshadowed by the Doklam standoff.

A mechanism to discuss issues between China, Bhutan and India are also likely to be discussed during Mr Jaishankar’s visit.

Bhutan and China met for the 24th round of the bilateral border discussion in August 2016, but a similar meeting has not been held so far though Chinese diplomats based in Delhi have visited the kingdom on several occasions earlier this year.

The News – Pakistan will be defended, announces China

Beijing-China, 2 September 2017. China on Thursday sent out a signal that it would defend Pakistan and would object to any discussion about Pakistan’s role in sheltering terrorists during the upcoming BRICS summit, which would be attended by Indian Prime Minister Narendra Modi, foreign media reported.

China is worried Modi may raise the issue at the meeting because he did so at the Goa summit of BRICS last year while describing Pakistan as the “mother-ship of terrorism”.

“We also noticed that India, when it comes to Pakistan’s counter-terrorism, has some concerns. I don’t think this is an appropriate topic to be discussed at BRICS summit,” Hua Chunying, Chinese Foreign Ministry spokesperson, said at a briefing.

She also indicated that raising the topic might affect the success of the summit because Chinese leaders may be forced to defend its close ally, Pakistan.

“The world is paying great attention to the BRICS summit. I hope relevant parties can work with China to ensure the success of the summit and make due contributions,” Hua said. She meant the five members of BRICS including India when she mentioned “relevant parties”.

This time the BRICS summit is taking place on 3 September in Xiamen in China, which regards Pakistan as an
“all-weather friend”.

India is in a stronger position to raise the issue because US President Donald Trump recently accused Pakistan of sheltering terrorists and threatened to withdraw financial aid if Islamabad refused to mend its ways. There are chances Chinese leaders might come to Pakistan’s defence at the summit.

One of the main objectives of BRICS is to enhance cooperation among the five member countries in fighting against terrorism. But it is difficult for India to join hands in any meaningful manner unless Beijing adopts a different attitude on this issue when it comes to the role of Pakistan.

Hua said, “Pakistan is at forefront of counter terror efforts and has made sacrifices for this. The international community should recognise their contributions and sacrifices made by Pakistan.”

She added, “China is willing to work with Pakistan and other countries to enhance our cooperation in counterterrorism. This serves the common interest of all parties.”

China routinely refers to “sacrifices” made by Pakistan in battling terrorism.

The Times of India – Doklam row: China removes road-building equipment from face-off site

Indrani Bagchi

New Delhi, 29 August 2017. In a diplomatic victory, India and China have agreed to “disengage” from the stand-off in Doklam on Bhutanese territory.

After almost 10 weeks of sustained negotiations between top-level Indian and Chinese officials, the MEA on Monday said “expeditious disengagement of border personnel at the face-off site at Doklam has been agreed to and is on-going.”

By the end of the day, as Indian troops withdrew from their post at Doka La, Chinese troops and their road-building equipment too were removed from the face-off site.

The standoff has been on since June 16 when Indian troops physically stopped the PLA from building a road on Doklam plateau. In a second statement at the end of the day, MEA confirmed that both sides had moved out “under verification.”

The negotiations were conducted at various levels, first, during the visit by NSA Ajit Doval to China in July, where he held discussions with his counterpart Yang Jiechi.

Next, foreign secretary S Jaishankar led the diplomatic talks with the Chinese side, helped by India’s ambassador to China Vijay Gokhale, who worked ceaselessly with the Chinese government over the last couple of months to achieve an outcome that would be acceptable to both sides.

The MEA spokesperson said that in numerous meetings between the Indian and Chinese officials in the past couple of months, India has been successful in conveying its “concerns and interests.”

“In recent weeks, India and China have maintained diplomatic communication in respect of the incident at Doklam. During these communications, we were able to express our views and convey our concerns and interests.”

Post-disengagement, China will continue to patrol the region as it had done earlier, but there will be no road construction activity. The resolution comes ahead of Prime Minister Narendra Modi’s visit to China for the BRICS summit.

It also comes before a crucial 19th party congress in China where Xi Jinping expects to be “cleared” for another five years and he will choose the core group of leaders who will rule China for the next five years.

The Indians went in with some demands:

– That China should not change the ground realities unilaterally.
– That China should respect the the 2012 understanding on tri-junctions.

This was detailed by external affairs minister Sushma Swaraj in parliament where she said, “Point 13 of the common understanding states that “The tri-junction boundary points between India, China and third countries will be finalised in consultation with the concerned countries.”

Since 2012, we have not held any discussion on the tri-junction with Bhutan. The Chinese action in the Doklam area is therefore of concern.”

While China was breathing fire in the public domain, during the negotiations, sources said, India held the line that bilateral relations would be affected if China did not ensure “peace and tranquillity” on the border.

This could happen only if there was a reversal to the status quo. The two sides only came to an understanding after continued conversations and a realisation in China that India would not move from the ground until they withdrew.

In addition, India also provided China with a face-saving exit. China’s initial response on Monday morning was to confine itself to saying that only Indian troops had withdrawn from the site, and that they would continue to “maintain sovereignty”on the Doklam plateau.

India did not contest this publicly until in the afternoon, when a second Indian statement clarified that both sides had withdrawn “under verification.”