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Despite the US-China Trade War, Relations Will Continue to Grow

May 27, 2019

Graduate students from China attend the Columbia University Commencement ceremony in New York, the United States, May 22, 2019 xin

 

Economic Watch: Impact of U.S. tariff hikes on China's manufacturing sector controllable

Source: Xinhua| 2019-05-27 20:45:21|Editor: ZX

BEIJING, May 27 (Xinhua) --

Tariff hikes by the United States will to some extent result in an increase of enterprise operation costs, lower competitiveness and fewer orders, but their impact on China's manufacturing sector is generally controllable, a senior official told Xinhua in an interview.

The 200 billion U.S. dollars worth of Chinese goods on which the United States imposed additional tariffs accounts for 41.8 percent of China's exports to the country, but only 8 percent of China's total exports, said Wang Zhijun, vice minister of industry and information technology.

Moreover, about half of the affected enterprises are foreign-funded enterprises, including many American companies, said Wang.

In other words, the tariff hikes hurt not only the interests of Chinese enterprises and consumers, but also U.S. companies and consumers as well as the global supply chain, said Wang.

Latest statistics from the National Bureau of Statistics (NBS) showed that the value added by China's major industrial firms increased 5.4 percent year on year in April, beating market expectations and posting an optimized structure.

In addition, the purchasing managers' index for the manufacturing sector held steady at 50.1, remaining within the expansion range.

NBS statistics also showed that profits of China's major industrial firms fell 3.7 percent year-on-year in April, thanks to a higher base in April last year and an earlier unleash of the market demand in March as lower value-added tax rate was implemented on April 1.

Li Chao, an analyst with Huatai Research Institute, said that industrial profits would return to the positive territory, but how fast will depend on market demand, prices and the policy incentives of tax cuts and fee reductions.

"Trade frictions may amplify short-term fluctuations but will not impact the long-term trend of asset prices based on what happened during the U.S.-Japan and U.S.-EU trade frictions," Li said.

As enterprises may continue to foreload their exports, the data will not worsen in the second quarter, he said.

BETTER STRUCTURE

Based on figures from April, China's manufacturing sector has seen improving structure and efficiency. Among the 41 sub-sectors, 27 saw higher profits and 14 reported lower earnings in April.

On the positive side, consumer product manufacturers and equipment producers maintained relatively fast profit growth, reflecting structural improvement.

In the period, major special-purpose equipment producers recorded a 17.9 percent profit growth, while electrical machinery and device producers' profits climbed 14.5 percent.

The structural change was in line with a shift in China's economic growth drivers from exports and investment to domestic consumption and high-end industries, analysts said.

For every 100 yuan of revenue they generated, the costs they bore fell by 1.1 yuan from a year earlier to 88.7 yuan in April.

Wang said that manufacturing firms' confidence had been enhanced thanks to the gradual unleashing of policy dividends as a result of the country's lower value-added tax rate.

INNOVATION ENCOURAGED

In the long run, innovation will be the main engine to propel the expansion of China's manufacturing industry. To encourage corporate innovation, China unveiled various measures, including establishing a series of innovation centers and laboratories, increasing support for enterprises in key fields and optimizing innovation-oriented policies.

Wang said China will place greater emphasis on innovation in enterprises' development and urge them to increase research and development investment with more tax cuts and fund and loan issuances for innovation projects.

More efforts will be made to facilitate research on core technologies, accelerate the intelligent, green and service-oriented upgrading of the manufacturing industry, and advance the integrated development of the manufacturing industry and industrial internet, Wang said.

While enhancing resource sharing on various research platforms, the country will promote the application of scientific achievements, encourage domestic enterprises to carry out international innovation cooperation and intensify the protection of intellectual property.

Despite the disruptions from the increased tariffs imposed by the United States, Wang said the country's manufacturing industry has a bright prospect.

Official statistics showed that from January to April, actual foreign investment in China's manufacturing sector jumped 11.4 percent year on year.

http://www.xinhuanet.com/english/2019-05/27/c_138094437.htm

Interview: Huawei ban could deal blow to U.S. firms, consumers: expert

Source: Xinhua| 2019-05-27 18:13:03|Editor: Li Xia

BUENOS AIRES, May 26 (Xinhua) -- The U.S. government's ban on Huawei could end up hurting U.S. businesses and consumers badly, said an Argentine expert on international relations.

Lucas Gualda, a member of the Argentine Council for International Relations, an academic institution, told Xinhua that the decision to limit U.S. companies from doing business with Huawei is not just "unfounded," but also likely to backfire, leading to unintended negative consequences.

"This measure could cost it (the United States) dearly, because let's not forget that China is one of the most important markets for Android," the mobile operating system employed by Huawei and developed by U.S. tech giant Google, Gualda said.

"In China, there are more than a billion mobile devices. It's truly a very important market," he stressed.

The United States cited security concerns to justify the ban, but Gualda sees competition as the main worry keeping Washington up at night.

"Huawei is a direct target of the United States because it really represents direct competition for any technology manufacturers in the world," he said.

"While it appears to be a threat, it is really an opportunity for China to make a technological leap, (and) to develop its own operating system," said Gualda, who also teaches corporate social responsibility at Maimonides University in Buenos Aires.

What's more, China's technological progress can help not only the Asian country to prosper but also its development partners around the globe, owing to Chinese investment in infrastructure and other projects, he said.

"Africa has experienced a technological leap," Gualda said. "Today, the continent has seen enormous development in trade and electronic payment thanks to Chinese investment in infrastructure, and Chinese companies."

The expert also noted that in general U.S.-China trade tensions are bound to cause "collateral damage" to the United States and other countries.

"The consequences of the conflict between the United States and China are global, leading to increased uncertainties in international markets," he said.

"What we see is a country that constantly threatens the economic stability of (other) countries it claims to be helping, and a nation that's offering the countries of the South a unique opportunity to achieve economic development," Gualda said.

http://www.xinhuanet.com/english/2019-05/27/c_138094159.htm

Interview: U.S. universities remain committed to China -- expert

 Xinhua | 2019-05-27 22:11:16 | Editor: huaxia

CHICAGO, May 26 (Xinhua) --

U.S. universities will continue to be committed to China, said Brad Farnsworth, a senior executive of a leading U.S. education association.

Farnsworth, vice president of American Council on Education (ACE)'s Center for Internationalization and Global Engagement, made the remarks in response to the difficulties certain Chinese students and scholars have recently encountered when they applied for U.S. visas.

"We are definitely seeing a longer time to approve visas, and this has been documented. We have solid evidence to show that the length of time that it takes to approve visa is longer than it used to be," Farnsworth said in an interview with Xinhua recently.

"It's become more complicated politically," he said. "We've expressed concerns to our government about the slowdown in visa approvals ... We're in a challenging time now, but I don't think anybody's giving up."

ACE is a major coordinating body for U.S. colleges and universities, and a membership organization that mobilizes the higher education community to shape effective public policy and foster innovative, high-quality practice. It provides advice to over 1,700 college and university members on international strategy.

"We know from our survey research that China's the No. 1 country for establishing partnerships, our universities are saying China's their top priority," said Farnsworth.

Statistics tally with ACE's survey. There are over 1 million international students studying in the United States at present, with some 360,000 or one-third from China.

International students contributed 42 billion U.S. dollars to the U.S. economy in 2017, according to the U.S. Department of Commerce. One third of it would be 14 billion dollars.

"It's very substantial," said Farnsworth.

"This is a very difficult thing for our institutions because Chinese students have choices. They can go to Australia or New Zealand or to Europe," said Farnsworth. "There are many good universities all over the world."

If Chinese students have the impression that it is difficult to get a visa for the United States, maybe they will go to another country, he said. "This is now a global market for international students."

Farnsworth said there are many good reasons to have international students beyond the financial one: interaction between international and American students is very valuable for them to develop cultural skills and to learn more about other countries.

"When international students graduate, they in many cases go back to their countries and form this really valuable global network that can help the institutions for many years after they graduate," he added.

"We want our members to be successful and our members tell us that in order to be successful, they want international students on campus," he said.

http://www.xinhuanet.com/english/2019-05/27/c_138094595.htm

China-U.S. ties still have great potential to grow: Chinese diplomat

CHICAGO, May 25 (Xinhua) --

There is still great potential and opportunity for China-U.S. relations to continue to grow, a Chinese diplomat said here Saturday.

Liu Jun, deputy Chinese consul general in Chicago, made the remarks at the first Northwestern U.S.-China Forum in Evanston of U.S. state of Illinois, which is hosted by Chinese Students and Scholars Association (CSSA) of Northwestern University.

The association said in a statement that the United States and China are the two most influential countries, and have extensive collaboration in different areas.

"We want to discuss and show such potentials in different areas," said the statement.

"That's our main goal and we want to bring a place for students to study and for speakers to discuss," Liu Chuanlu, president of Northwestern University CSSA, said at the opening ceremony.

Liu Jun said that as this year marks the 40th anniversary of China-U.S. diplomatic ties, it is a moment to recall the past with old friends and look forward to the future.

"The past 40 years of our relations has brought tremendous benefits to the two peoples. Cooperation and collaboration is the only way out. We have no other choice in the 21st century," he said.

"We have no time to fight, engage in Cold-War mentality, or (a) zero-sum game. And I believe there is still tremendous potential (and) an opportunity for this relationship to continue to grow," the diplomat added.

http://www.xinhuanet.com/english/2019-05/27/c_138094593.htm

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