He Yafei argues that the balance of power is shifting in favor of emerging markets, causing anxieties among US elites that “the world is not theirs anymore.”  Nobody can live about the rules in a world of shared interests and responsibilities and shared destiny, he asserts.

He Yafei, Former Vice Foreign Minister of PRC. 

At a meeting on the margins of the G20 in Argentina, President Xi Jinping of China and US President Donald Trump agreed not to escalate the trade tensions between the two largest economies and give time for negotiators to reach a deal. Veteran Chinese diplomat He Yafei gives his takes on what lies ahead.

He Yafei, Former Vice Foreign Minister of PRC.

Key words: US-China trade war, Xi Jinping, Donald Trump, G20 Buenos Aires summit

China's well-documented air quality problems, and its status as the world leader in greenhouse gas emissions, have given the country a bad rap. Nonetheless, China is now the world’s leading producer of renewable energy and has gained global attention for its efforts to address its energy dependence problems. This video explains the nation's efforts in growing a more sustainable economy supported by green energy, including expanding wind and solar power generation, reducing dependency on coal, rolling out the “cap and trade” system to cut emissions, as well as its commitment to the Paris Climate Agreement.

Keywords: Renewable Energy, Green Energy, Paris Climate Agreement, Cap and Trade, China’s economy.

The escalating trade war has raised important concerns for the U.S. and China to negotiate including jobs, deficit, and growth. The U.S. Chamber of Commerce says on its website “Trade Works. Tariffs Don’t.” It predicts that the tariffs will cause “extremely significant damage” to conservative-leaning states: Idaho, South Dakota, Alaska, Louisiana, Alabama, and South Carolina. 3M is bracing itself for a 10 million dollar hit. Harley-Davidson is earmarking extra costs this year of up to 20 million dollars. General Electric is anticipating up to 400 million dollars in raised costs. Nor will the damage be limited to the U.S. Christine Lagarde of IMF compares the outlook for the global economy to “clouds on the horizon getting darker by the day.”

How much debt does China have, and could it cause a financial crisis? Can it cut down on debt without sacrificing its targets for economic growth ?

In recent years, economists around the world have warned of China’s surging debt-to-GDP ratio, which Forbes called “China's Debt Bomb.” But how much debt does China actually have, and could it cause a financial crisis?

Between 2007 and 2014, China’s total debt quadrupled. Estimates vary, but the International Monetary Fund puts China's total debt at 230% of gross domestic product (GDP.) China’s central government in 2017 estimated that it was around 260%. The U.S.’s debt, by comparison, is 105%, according to the U.S. bureau of public debt.

Where did China’s debt come from? Economists argue that China’s spectacular growth over the past few decades has led to rising credit and the rapid accumulation of debt. China’s debt buildup since the global financial crisis has been one of the largest in modern history. Nearly half of new debt since 2007 is in the property sector and related industries, with considerable debt held by China’s local governments, state-owned companies, and the “shadow banking” sector of unregulated non-bank lenders. However, unlike some advanced economies, such as the U.S., China’s household debt and total government debt are relatively low.

Last year, the ratings agency Moody’s downgraded China's credit rating, highlighting global concern over the amount of debt the world’s second-largest economy holds.

At last year’s 19th Party Congress, Chinese President Xi Jinping classified debt as one of the three major risks to the country’s stability. The government began a campaign to reduce corporate debt, tighten controls on local government spending, reign in unregulated non-bank lenders, and increase oversight in the banking sector. It also readjusted to prioritize quality of economic growth over quantity. Consequently, the pace of debt buildup during 2017 was much slower than in previous years.

China has taken measures to address its rapidly accumulating debt. But can it cut down on debt without sacrificing its targets for economic growth? That remains to be seen.

Tariffs and other forms of protectionism diminish opportunities, while free trade provides them to all.

In his 2012 State of the Union address, President Obama said over a thousand Americans were in jobs because he stopped what he called a “surge in Chinese tires”.

That may have been accurate. But the Peterson Institute for International Economics says Obama may have done more harm than good. It calculates that Obama’s move saved a maximum of 1200 jobs – but in tariffs it cost American consumers 1.1 billion dollars – that’s 900,000 dollars per job saved. Only a small fraction of this bloated figure reached the pockets of tire worker.

Not only that, but when losses in retail were absorbed into the equation, it seems likely that tire protectionism cost the U.S. economy around 2,531 jobs. 

Many Americans have been told that international trade - and more specifically, China’s trade relationship with the United States - is bad for workers and hurts U.S. growth. What is the real picture?

It is estimated that exports to China support 1 million U.S. jobs. U.S. firms sell high value products to China, including cars, trucks, construction equipment, and semiconductors, all of which support manufacturing jobs for Americans.

Over 350,000 Chinese students studying in the U.S. means tens of thousands of U.S. jobs; Chinese tourists visiting your cities and spending at local businesses support local jobs. You can add direct investment from China - billions of dollars of investment from China also means one thing: more American jobs. 

Today, there are 68,000 American companies who manufacture, distribute and sell goods in China. It challenges the belief that the Chinese market is closed to the U.S., when in fact China subsidiaries belonging to these American businesses sold 223 billion dollars’ worth of goods in 2015 alone. This 223-billion-dollar figure is not calculated into the US-China trade deficit.

Former U.S. Secretary of Treasure Larry Summers says, "I think the American strategy should be to pick the U.S. up, not hold China down. These are many steps that I think will push our economy forward. Increasing our infrastructure investment, increasing the commitment on basic science, and making investment in increasing hires, and proper rate of subsidies, provide human capital in community college education for our citizens."

Trade is essential to the success of America and the American people. It represents about a third of U.S. GDP, and has helped build the U.S. economy into the undisputed #1. Tariffs are bad news for everyone. What does the escalating trade tensions between the two largest economies have to do with us? The IMF says U.S. tariffs could cost the global economy $430 billion. And it thinks Americans would be “especially vulnerable” to an escalating tariff war. The World Bank predicts that tariff increases could trigger a drop in global trade of 9 percent – what it calls “crisis levels” not seen since the recession of 2008.