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Trade Tensions A Blessing For Asia
Trade Tensions A Blessing For Asia
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China’s President Xi Jinping (left) and US President Donald Trump attend a welcome ceremony at the Great Hall of the People
in Beijing on November 9, 2017. Trade tensions between Beijing and Washington will reap benefits throughout Asia this year.
FRED DUFOUR/AFP
As usual, the US has overestimated its competence in managing economic and geopolitical issues. And as a
result, trade tensions between Beijing and Washington will reap benefits throughout Asia this year – and
While US President Donald Trump aims to reduce his country’s trade deficit with China by increasing tariffs
and threatening punitive actions, China has counter-punched without blinking once.
It’s clear that even as Trump says he will “put America first”, China has no plans on being left behind either.
Cooperative agreements signed under the auspices of the Belt and Road Initiative have opened doors for
developing nations to finally get a piece of the “manufacturing pie” that allowed China to be the global
China has transformed itself from an agrarian society to an industrialised nation. As the world’s foremost
superpower, the US considers China’s advances – in less than 40 years – a serious threat to its own ambitions.
The “Asian miracle” has been built on the success of labour intensive jobs. The tigers or dragons that have
emerged from the region fuelled its development through manufacturing and agricultural sectors.
Trade tariffs would inevitably mean that manufacturers, already accustomed to selling goods on the
international market, will likely move to greener pastures like Cambodia, Myanmar, Laos, Bhutan and
As a result, these countries will finally be able to diversify trade, improve the quality of life of their citizens,
introduce new skills to the labour force and eventually move beyond just being the rice fields and bread baskets
China has spent years preparing itself for this eventuality. The country has a successful recent history of
developing long-term and short-term national goals that have allowed it to fast-forward through the arc of
development.
Already, China accounts for nearly half of all capital investment in artificial intelligence. The country is poised
to look beyond just being “the factory of the world”. Instead, the communist government’s success has allowed
The result can only be shared economic prosperity for those who need it most.
Chinese and American firms have put plans into action which would allow them to bypass harsher trade
Chinese bicycle manufacturers – a $13 billion industry in 2018 – are happy to move their plants to Vietnam,
where improved bilateral relations with the US has resulted in a free-trade agreement between the two nations.
Similarly, garment manufacturers like GAP, Levi’s and Zara have set up contingency plans which would allow
them to move manufacturing to Bangladesh in the event their products are targeted by stricter trade regulations.
The US garment market was worth $390 billion in 2018 Mercedes and BMW parts manufacturers in China that
export to the US – another $700 billion industry in 2018 – have looked towards Thailand as being an
alternative.
Malaysia, which hosts over 800 auto component manufactures on its shores will also certainly benefit from the
The Economist Intelligence Unit forecasts that Asia’s GDP is expected to grow by 5.4 per cent this year, while
North America and Western Europe’s GDP will grow by only 2.2 per cent and 1.7 per cent, respectively.
In fact, eight of the top 10 fastest growing economies are anticipated to emerge out of Asia next year – with
Youngest populations
Cambodia, despite facing a potential withdrawal of its Everything But Arms preferential agreement with the
EU, is set to see its GDP grow at 6.8 per cent this year.
The problem which has faced Asia and the 10-nation Asean block itself is that large swaths of its population
have not been given the opportunity to progress even to an industrial state.
This is especially detrimental to a region that has enjoyed the bounty of having some of the youngest
Ironically, it’s the young people in the West who feel they are losing ground to Asians because the region has
All the while, China seems to be turning away from funding gains by manufacturing to export – and their youth
Asia has never been doomed to reflect pleasantly upon how we did the same old thing last year about this time.
It’s a luxury that Asia has never had and in that is the entire region’s strength.
Asians by virtue invent and then reinvent, rework and reintroduce themselves to the world a little stronger and
As our mobile phones update themselves to yet another calendar year – this time to the penultimate year of a
new decade in the a millennium – let us remind ourselves that economic prosperity is on the way for all Asians
The Asian Writers’ Circle is a series of columns on global affairs written by top editors and writers from
members of the Asia News Network and published in newspapers and websites across the region.