China pledges $20 billion in loans for Arab states

1 / 2
Kuwaiti ruling Emir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, right waves after giving a speech as China's President Xi Jinping looks on during the 8th Ministerial Meeting of China-Arab States Cooperation Forum in Beijing on Tuesday, July, 10. (AFP)
2 / 2
Since taking office, Chinese President Xi Jinping has overseen a concerted effort to expand Chinese influence in the Middle East and Africa, including the construction of the country’s first military base in Arab League state Djibouti. (AFP)
Updated 10 July 2018
0

China pledges $20 billion in loans for Arab states

  • Beijing is also prepared to provide another one billion yuan to countries in the region to “build capacity for stability maintenance”
  • The Arab states’ position at the center of the ancient trade route makes them “natural partners” in China’s new undertaking

BEIJING: China will provide Arab states with $20 billion in loans for economic development, President Xi Jinping told top Arab officials Tuesday, as Beijing seeks to build its influence in the Middle East and Africa.
The money will be earmarked for “projects that will produce good employment opportunities and positive social impact in Arab States that have reconstruction needs,” said Xi, without providing further details.
It is part of a special Chinese program for “economic reconstruction” and “industrial revitalization,” Xi told participants at a China-Arab States forum in Beijing’s Great Hall of the People.
Beijing is also prepared to provide another one billion yuan to countries in the region to “build capacity for stability maintenance,” Xi said, using a term commonly associated with policing and surveillance.
Since taking office, Xi has overseen a concerted effort to expand Chinese influence in the Middle East and Africa, including the construction of the country’s first military base in Arab League state Djibouti.
China has already provided vast sums to Arab countries, with Djibouti alone owing some $1.3 billion, according to estimates from the US-based China Africa Research Initiative.
The financial largesse has raised concerns both at home and abroad over the vulnerability of poor nations to such massive debt.
Last year Sri Lanka was forced to hand over majority control of its Hambantota port to China after being unable to repay its loans.
At the heart of Xi’s vision is the “Belt and Road” initiative, a $1-trillion infrastructure program billed as a modern revival of the ancient Silk Road that once carried fabrics, spices and a wealth of other goods between Asia, Africa, the Middle East and Europe.
The Arab states’ position at the center of the ancient trade route makes them “natural partners” in China’s new undertaking, he said, adding he expected the summit would end with an agreement on cooperation on the initiative.
“Chinese and Arab peoples, though far apart in distance, are as close as family,” he said, describing a romanticized history of trade along the Silk Road.
The project, which has already financed ports, roads and railways across the globe, has spurred both interest and anxiety in many countries, with some seeing it as an example of Chinese expansionism.
“China welcomes opportunities to participate in the development of ports and the construction of railway networks in Arab states” as part of a “logistics network connecting Central Asia with East Africa and the Indian Ocean with the Mediterranean,” said Xi.


China: Trump forces its hand, will retaliate against new US tariffs

Updated 18 September 2018
0

China: Trump forces its hand, will retaliate against new US tariffs

  • The commerce ministry’s statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China
  • The latest US duties spared smart watches from Apple and Fitbit and other consumer products such as baby car seats

BEIJING/WASHINGTON: China said on Tuesday that it has no choice but to retaliate against new US trade tariffs, raising the risk that President Donald Trump could soon impose duties on virtually all of the Chinese goods that America buys.
The commerce ministry’s statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the US action.
The brief statement gave no details on China’s plans, but Foreign Ministry spokesman Geng Shuang told a daily news briefing later that the US steps had brought “new uncertainty” to talks between the two countries.
“China has always emphasised that the only correct way to resolve the China-US trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does does not give the impression of sincerity or goodwill,” he added.
Geng said he would not comment on “hypotheticals” such as what measures Beijing might consider apart from tariffs on US products, saying only that details would be released at the appropriate time.
Trump had warned on Monday that if China takes retaliatory action against US farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”
The latest US duties spared smart watches from Apple and Fitbit and other consumer products such as baby car seats. But if the administration enacts the additional tariffs it would engulf all remaining US imports from China and Apple products like the iPhone and its competitors would not likely be spared.
Last month, China unveiled a proposed list of tariffs on $60 billion of US goods ranging from liquefied natural gas to certain types of aircraft — should Washington activate the tariffs on its $200 billion list.
China is reviewing plans to send a delegation to Washington for fresh talks in light of the US action, the South China Morning Post reported on Tuesday, citing a government source in Beijing.
Collection of tariffs on the long-anticipated US list will start on Sept. 24 but the rate will increase to 25 percent by the end of 2018, allowing US companies some time to adjust their supply chains to alternate countries.
So far, the United States has imposed tariffs on $50 billion worth of Chinese products to pressure Beijing to reduce its huge bilateral trade surplus and make sweeping changes to its trade, technology transfer and high-tech industrial subsidy policies.
Beijing has retaliated in kind, but some analysts and American businesses are concerned it could resort to other measures such as pressuring US companies operating in China.
A senior Chinese securities market official said US trade actions will not work as China has ample fiscal and monetary policy tools to cope with the impact. The government already has been ramping up spending on infrastructure.
“President Trump is a hard-hitting businessman, and he tries to put pressure on China so he can get concessions from our negotiations. I think that kind of tactic is not going to work with China,” Fang Xinghai, vice chairman of China’s securities regulator, said at a conference in the port city of Tianjin.
FURTHER TALKS IN DOUBT
Trump’s latest escalation of tariffs on China comes after several rounds of talks yielded no progress. US Treasury Secretary Steven Mnuchin last week invited top Chinese officials to fresh discussions, but thus far nothing has been scheduled.
“We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly,” Trump said in a statement. “But, so far, China has been unwilling to change its practices.”
Fang told the Tianjin forum that he hopes the two sides can sit down and talk, but added that the latest US move has “poisoned” the atmosphere.
A senior Trump administration official told reporters that the United States was open to further talks with Beijing, but offered no immediate details on when they may occur.
“This is not an effort to constrain China, but this is an effort to work with China and say, ‘It’s time you address these unfair trade practices that we’ve identified that others have identified and that have harmed the entire trading system,’” the official said.
So far, China has either imposed or proposed tariffs on $110 billion of US goods, representing most of its imports of American products.
“Tensions in the global economic system have manifested themselves in the US-China trade war, which is now seriously disrupting global supply chains,” the European Union Chamber of Commerce in China said in a statement on Tuesday.
China’s yuan currency slipped against the dollar on Tuesday after news of the US measures. It has weakened by about 6.0 percent since mid-June, offsetting the 10 percent tariff rate by a considerable margin.
CONSUMER TECH TRIMMED
The US Trade Representative’s office eliminated 297 product categories from the latest proposed tariff list, along with some subsets of other categories.
But the adjustments did little to appease technology and retail groups who argued US consumers would feel the pain.
“President Trump’s decision...is reckless and will create lasting harm to communities across the country,” said Dean Garfield, president of the Information Technology Industry Council, which represents major tech firms.
Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai, said three quarters of its members will be hit by the tariffs, and they will not bring jobs back to the United States.
“Most of our member companies are ‘in China, for China’ — selling goods to Chinese companies and consumers, not to Americans — and thus ultimately boosting the US economy,” Jarrett said.