Trade battles with China are likely to intensify as the country looks to a policy of self-sufficiency and subsidy to boost its domestic producers.
Foreign governments need to understand the implications of China’s new ‘dual circulation’ strategy says trade specialist Stephen Olson, writing in the South China Morning Post.
Olson began his career in Washington DC as an international trade negotiator and served on the US negotiating team for the NAFTA negotiations.
'China first'
The approach, which was first revealed to the Chinese Communist Party Politburo last year, will see less emphasis on export-led growth and more focus on the country’s massive internal market.
Foreign investors will not be locked out, but will find life getting tougher as China becomes more demanding over the terms of engagement, Olsen writes.
Although international trade and investment will not disappear, they will be subordinate to the needs to the home economy.
End of mutuality
As China looks to upgrade its technological capability, the age of mutual benefit between China and the West is over, says Olson. The West will not overlook China’s “questionable practices in pursuit of development”.
US president Jo Biden has highlighted his concerns about the growth of Chinese influence.
The recent G7 conference saw the US get the member nations behind a historic rebuke to China focused on its unfair trade practices and human rights abuses, Politico reported.
Biden on China
Biden has spoken about the emerging threat to US and European dominance in aircraft manufacture, and this helped push through a deal on the 17-year Boeing-Airbus dispute, as reported in the IOE&IT Daily Update bulletin.
The US was also behind a green alternative to the Chinese Belt and Road initiative, reported the Guardian.
However, Biden is also looking for high level engagement with Beijing, reports the FT.
A possible meeting between Antony Blinken, secretary of state, and Chinese foreign minister Wang Yi at a G20 meeting in Italy next week, is being discussed. Wendy Sherman, deputy secretary of state could also visit China this summer.