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Egypt Independent
10-04-2025
- Business
- Egypt Independent
Chinese professor Jing Zhao discusses repercussions of China-US trade war in exclusive interview
A professor of the Middle East Studies Institute at the Shanghai International Studies University, Jing Zhao, stated that on April 2, the Trump administration announced it would impose 'reciprocal tariffs' on all trading partners, with a 34 percent rate applied to China. On April 8, it further imposed an additional 50 percent tariff on Chinese goods, bringing the total reciprocal tariff rate to 84 percent. Combined with other tariffs, the overall tariff rate on Chinese goods has soared from 12 percent in 2018 to 104 percent this April. In this exclusive interview, Zhao explained that the US has adopted a 'benchmark tariff + reciprocal tariff' model imposing a 10 percent benchmark tariff on all imported goods, an additional 10 percent tariff on Chinese products under the pretext of fentanyl, and an 84 percent reciprocal tariff. This brings the overall tariff rate on Chinese goods to 104 percent, with actual rates potentially higher depending on the industry. When asked as to how effective has the US tariff policy been, Zhao said that the protectionist policy of imposing tariffs has failed to improve the US trade deficit. In 2024, the US trade deficit reached $1.21 trillion, an increase of 50 percent compared to 2017, before the trade war began. The actual cost of the trade war has been borne by America's households and businesses. According to an analysis by Yale University, this round of tariff policies has led to a 2.3 percent increase in US inflation, a 2.8 percent rise in food prices, and an 8.4 percent increase in automobile prices, resulting in an annual loss of US$3,800 for the average American household. In the face of America's unilateral tariff bullying, China has responded with resilience and determination. The Chinese government has introduced several countermeasures, including imposing an 84 percent tariff on all US imports, filing a lawsuit against the US under the WTO dispute settlement mechanism, placing multiple US entities on export control lists, and implementing export restrictions on rare earth materials. These actions not only defend China's legitimate interests but also uphold the fairness and freedom of the global trading system. She added that China's economy, characterized by its strong resilience, is confident and capable of withstanding the new round of US containment, adding that the decline in exports to the US will not have a destabilizing impact on China's economy. From the perspective of Sino-US trade, China's reliance on the US market has been decreasing in recent years, with the proportion of exports to the US dropping from 19.2 percent in 2018 to 14.7 percent in 2024. Meanwhile, the US remains highly dependent on certain Chinese products, with some categories having a dependency rate exceeding 50 percent. As it becomes harder alternative sources in the short term, a complete disruption of Sino-US trade becomes impossible. From the perspective of China's economy as a whole, as the world's second-largest economy, China's GDP reached $18.94 trillion in 2024, with an economic growth rate of five percent, continuing to serve as a key driver of global economic growth. China's massive economic scale and comprehensive industrial system enable it to withstand external market fluctuations and ensure stable economic operations. Zhao explained that US suppression has forced China to accelerate technological innovation and industrial upgrading. China's '14th Five-Year Plan' prioritizes self-reliance and self-strengthening in science and technology as a national strategy, with continuous growth in research and development investment. In 2024, China's R&D expenditure accounted for 2.68 percent of its GDP, surpassing the EU average of 2.11 percent and approaching the OECD average of 2.73 percent. China has concentrated resources on breakthroughs in key areas such as semiconductors, artificial intelligence, and aerospace. The domestic production rate of semiconductor equipment increased from less than 10 percent in 2018 to approximately 20 percent in 2023. China's share of global 5G patents exceeds 38 percent, while new energy vehicle exports have risen to the top globally, and the C919 large passenger aircraft has been put into commercial use. China is transitioning from 'catch-up innovation' to 'original innovation,' driving comprehensive industrial upgrades through technological innovation. According to Zhao, China's 'Dual Circulation' strategy has shown significant results. China is promoting mutual reinforcement between domestic and international circulations to mitigate the impact of external shocks on the economy. On the one hand, the dominant role of the domestic circulation has been strengthened, with enhanced resilience in domestic demand and industrial chains. The government has introduced a series of policies to stimulate the domestic market, increase household incomes, and reduce burdens, using domestic demand to offset export risks. In 2024, domestic demand contributed over 80 percent to economic growth, becoming the main driver of growth. Among enterprises with export performance, nearly 85 percent also engage in domestic sales, with domestic sales accounting for nearly 75 percent of total sales. On the other hand, international circulation has been improved in quality and efficiency, with high-level opening-up countering external blockades. China has deepened economic and trade cooperation with countries along the 'Belt and Road.' In 2024, total imports and exports with BRI countries reached $3 trillion, a year-on-year increase of 6.4 percent, with the proportion of these countries in China's total imports and exports exceeding 50 percent for the first time. China is diversifying its export markets and international cooperation, Zhao said, adding that it is accelerating its shift away from over-reliance on traditional markets, turning instead to emerging economies in Southeast Asia, Latin America, and the Middle East. In 2024, exports to ASEAN and Latin America grew by 8.4 percent and 11.9 percent year-on-year, respectively, significantly higher than the 2.5 percent growth rate for exports to the US. At the same time, China is deepening institutional opening-up through free trade agreement (FTA) networks and the Regional Comprehensive Economic Partnership (RCEP). By 2025, China had signed 23 FTAs with 30 countries and regions, with the proportion of imports and exports to FTA partners increasing to 34 percent. The expansion of logistics hubs such as the China-Europe Railway Express and Beibu Gulf Port has further opened up trade channels between Asia, Europe, and Africa. America's imposition of tariffs harms both others and itself and is unlikely to achieve its intended goals, according to Zhao. In the face of the US's tariff bullying, China remains calm and resolute, focusing on managing its own affairs, she added. By strengthening technological innovation, optimizing industrial structures, and expanding international markets, China has effectively countered external pressures and maintained stable economic growth, demonstrating strategic resilience. China welcomes dialogue with the US based on equality, mutual respect, and reciprocity. However, if the US insists on waging tariff and trade wars, China is prepared to see it through to the end. The Chinese professor said that looking ahead, China will continue to adhere to reforms and opening-up, promoting high-quality economic development, and strengthening international cooperation to safeguard the multilateral trading system, thereby making greater contributions to the stability and development of the global economy.
Yahoo
21-03-2025
- Politics
- Yahoo
Closer China-Iran ties could provoke US into 'harsher' response on nuclear issue
Analysts expect that Washington will ramp up pressure on Tehran in response to last week's trilateral nuclear talks between China, Iran and Russia - given the hardening consensus in the US against both the meeting's host Beijing and the Middle East nation. Despite the pushback, China will continue to pursue multilateral negotiations on the nuclear issue, using them to reinforce its role as a key Middle East mediator and further expand its regional influence, the experts said. At the Beijing talks on March 14, the three nations reaffirmed their commitment to non-proliferation and jointly condemned "sanctions, pressure, or the threat of force". Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Foreign Minister Wang Yi also proposed a five-point plan for the settlement of the Iranian nuclear issue that included a commitment to the Joint Comprehensive Plan of Action (JCPOA) nuclear deal that President Donald Trump pulled the US out of during his first term. Tehran's positive response to the talks - which came just days after Trump sought to engage Iran in bilateral nuclear negotiations - was in stark contrast to Supreme Leader Ayatollah Ali Khamenei's swift rejection of the Washington proposal. Khamenei said Tehran would not be bullied into negotiations after Trump announced he had written to Iran suggesting a restart to bilateral talks - followed by a declaration that the US would have to "go in militarily" if the Iranians did not want to negotiate. Iran's stockpile of uranium enriched up to 60 per cent - a short step from the weapons-grade level of 90 per cent - was reported to be around 280kg (617lbs) in February - an increase of 90kg (198lbs) in only three months. While Tehran's preference for Beijing's multilateral approach over Washington's bilateral outreach underscored its strategic positioning in an increasingly hostile diplomatic environment, it could provoke an even harsher response from the US. Chinese Foreign Minister Wang Yi hosts the trilateral meeting between China, Iran and Russia in Beijing on March 14. Photo: Xinhua alt=Chinese Foreign Minister Wang Yi hosts the trilateral meeting between China, Iran and Russia in Beijing on March 14. Photo: Xinhua> "Trump must be upset with Russia and China's strategic support for Iran ... It is highly possible that Trump will impose some extra pressure on Tehran in the near future," said Middle East specialist Wen Shaobiao from Shanghai International Studies University. Wen also observed that the US would be very unlikely to return to multilateral talks - "because Trump never believed multilateralism can solve problems". Trump's recent approach to Iran mirrors the hardline stance of his first administration's withdrawal from the JCPOA, followed by the imposition of sweeping economic sanctions under the so-called maximum pressure strategy. Despite former president Joe Biden's efforts to revive negotiations during his term in office, the second Trump White House has made it clear that the maximum pressure strategy will continue for the next four years. Yan Wei, deputy director at the Institute of Middle Eastern Studies at China's Northwest University, said it was possible that Beijing's deepening engagement in nuclear negotiations may further escalate tensions. According to Yan, Beijing's engagement could potentially push Washington towards adopting a more aggressive stance on Iran, rather than seeking a balanced diplomatic solution. "Amid growing Sino-US rivalry across the globe, Washington might conduct a further rightward policy to Iran. Meanwhile, Beijing is conducting a more stable approach towards the Iranian nuclear issue," he said. Analysts also noted that China's engagement with Iran and Russia on the nuclear issue aligns with its broader diplomatic strategy in the Middle East, where Beijing is actively engaging with regional politics, after previously focusing primarily on economic ties. China's presence in the region has expanded significantly since the JCPOA was signed in 2015, with Beijing these days regarding the Middle East as a critical arena for its global ambitions. In 2023, China brokered a landmark peace deal between Saudi Arabia and Iran. This was followed last year with negotiations in Beijing that brought together 14 Palestinian factions, including Hamas and Fatah. "China's continued diplomacy in the Middle East would reflect its own calculus in portraying itself as an active player in the region," said Clemens Chay, a research fellow at the National University of Singapore's Middle East Institute. According to Chay, hosting last week's trilateral discussions also allows Beijing to challenge what it views as coercive tactics by Washington. "China's calculus on hosting Iran's nuclear talks is also to seize the opportunity to denounce a bullying narrative of America." Sun Degang, director of the Centre for Middle Eastern Studies at Fudan University, noted that even as a close partner, China is also working to prevent Iran's nuclear ambition - a stance that could drive Arab states, particularly in the Gulf, closer to Washington. "If Iran keeps moving forward on the nuclear issue, it will upset the regional balance and push many Arab countries into the US, which is not in China's interest," Sun said. "China is involved in the Iranian nuclear issue for regional balance ... It hopes that the Iranian nuclear issue can achieve a soft landing and avoid a confrontation between the US and Iran." For the Gulf states, Iran remains the region's most pressing security concern. Several of the monarchies strengthened diplomatic ties with Israel during Trump's first term, motivated by the perceived Iranian threat. In 2023, Saudi Arabia and the US were reportedly close to finalising a defence treaty aimed at countering Iran's regional power when the deal was stalled amid the outbreak of the Gaza war. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.
