27.01.2021 Author: Vladimir Terehov

On Some Results of China’s Foreign Trade in 2020

FR2

In mid-January 2021 the PRC published a very noteworthy document summarizing its foreign trade in goods for 2020. Its main summary by Xinhua News Agency is defined as follows: “China emerged from the global economic and trade challenges in 2020 as the world’s only major economy to have registered positive growth in foreign trade in goods.”

In support of this thesis are the following figures: “exports rose 4 percent, while imports went down 0.7 percent”, in other words, compared with 2019, the total volume of trade of goods of the second world power with the outside world rose by 3.3 percent. It’s a very optimistic thing to say against the backdrop of a general depression caused by the coronavirus pandemic.

An increase in trade was observed with each of the top five external partners, which are ranked as follows: 10 ASEAN countries ($685 billion, up 6.7%), the EU ($649.5 billion, up 4.9%), the United States ($586.7 billion, up 8.3%), Japan ($317.5 billion, up 0.8%), South Korea ($285.3 billion, up 0.3%).

China attaches particular importance to the Southeast Asian region’s emergence as a major foreign trade partner. The author will also pay attention to this fact, because it confirms the political message that Beijing has consistently conveyed in recent years: China’s leadership intends to make every effort to create and maintain a climate of political and strategic calm in Southeast Asia, despite the existing (often serious) problems in relations with most countries in this extremely important region, in whose affairs other leading world players, above all the US, are interfering more and more definitely.

At the end of November last year, Chinese leader Xi Jinping gave a very positive assessment of the state and prospects of China’s relations with ASEAN countries. China finds the “staggering” growth (by almost 19%) of the volume of trade with Vietnam, whose political relations with Beijing are perhaps the most complex of all ASEAN countries, to be extremely remarkable. At the same time, imports from Vietnam grew ahead of schedule. Note that the large-scale negative balance of trade with China has always been one of the components of Hanoi’s claims against it.

No less remarkable is the Chinese Global Times’ citation of Vietnam’s relations with the PRC as an example for India, which has recently had just as many difficulties in the political sphere of relations with Beijing as Hanoi. But unlike the latter, New Delhi (as the PRC believes, “blindly following Washington”) seeks not to develop, but to reduce the scale of trade and economic cooperation with Beijing. Which, incidentally, recently made an important gesture aimed at mitigating the conflict with India in Ladakh by announcing the withdrawal of 10,000 troops from the area.

As for the Europeans, they are mostly accused of being slow-witted, indecisive, and still “blindly following Washington”. However, at the very end of last year there was a trend to escape this negativity, when a bilateral agreement on mutual investment was finally signed between Beijing and Brussels. But, as the PRC believes, almost a year of this “indecision” has led to the EU surrendering leadership in trade with the PRC to ASEAN for the first time in 2020.

However, the indicators of the first three major trading partners of China are not fundamentally different from each other, and the position (for several years now) of the United States in third place does not negate the fact that from the perspective of assessing the situation in the region and the world as a whole, trends in the US – Chinese trade are of greatest interest.

And the first thing that Chinese commentators point out is that the same trend in trade with the US that began ten years ago is still in place. It consists in a continuous rise, year by year, in the total volume of mutual trade turnover. That is, throughout the past year (as well as before) US business refused to follow the anti-China political campaign of the part of the US establishment represented in the Trump administration by former Secretary of State Michael Pompeo.

NEO has previously noted that this (understandable) “uncooperative” nature of American business is perhaps the best hope for keeping relations between the two leading world powers from descending into total confrontation.

Quite expectedly, the Trump administration in China was “seen off”, to put it mildly, without regret. Although it took an important positive step by concluding the so-called “Phase 1 Agreement” with the PRC in January 2020, its series of anti-Chinese actions in its final two months in power have been described as nothing short of “final frenzy”.

As for the prospects for China’s relations with the new US administration, they are assessed from a position of very cautious optimism. Everyone hopes that at least the spread of this “frenzy” will be stopped. The PRC is watching the personal filling of seats in the new administration and, in particular, has taken note of the candidacy of Secretary of Commerce, Gina Raimondo, who previously served as governor of Rhode Island.

The published main results of China’s foreign trade in 2020 do not confirm the frequent prophecies about the exhaustion of China’s potential for foreign expansion (quite positive so far) due to growing internal problems and the global economic depression. The country continues to carry out projects under a key national Belt and Road Initiative (BRI) program. In 2020, the volume of trade with BRI member countries, even in the face of a coronavirus pandemic, increased by 1% to $1.45 trillion.

In particular, in mid-December a record number of freight trains passed to Europe from XUAR through the Alataw Pass.

An important component of the BRI are all sorts of projects for a (strategically extremely important) land corridor, which should provide the PRC with access to the Indian Ocean, bypassing the vulnerable Strait of Malacca. Apparently, one of the most realistic projects is the one that connects the southwestern Chinese province of Yunnan with the Myanmar port city of Kyaukpyu, located on the Bay of Bengal.

This project has long been discussed, but the decisive step to translate it into practice was the visit of Chinese leader Xi Jinping to Myanmar a year ago. In January of this year, a Memorandum of Understanding was signed between China and Myanmar to address the specific problems of building the final section of the corridor, which will connect Kyaukpyu with “Mandalay, the country’s second largest city in Myanmar’s central region.”

Finally, among the complex of issues that arise with the publication of the results of foreign trade in 2020 of the second world power, there is one of particular importance, associated with the problem of forecasting the development of the “Great World Game”. In the author’s opinion, this case is largely unpromising. Mainly because it is impossible to predict the future with the necessary completeness and accuracy. If one cannot clearly see what “has already happened,” what can one say about what “has not yet happened”?

Who could have foreseen a year ago that SARS-CoV-2, like a hurricane, would appear out of nowhere and immediately shuffle all the cards on the gaming table. There is a plausible hypothesis that the initiators of the First World War did not intend anything particularly serious: “we will fire a few (“devilish”) machine guns, kill a few tens or hundreds of thousands of people, but quickly empty the arsenals, and then sit down to negotiations – we’re not going to fight with clubs”. They underestimated the pace and scale of their own ferocity: they “shot” (i.e. bombed, tanked and gassed) for five years, “killing” 10 million soldiers and an equal number of civilians.

One could, of course, try to ask the constellations on the topic of interest. But even Blessed Augustine spoke most negatively of such attempts. Not of the finest quality is also the information obtained from some “powerful behind-the-scenes forces,” that is, the same slivers on top of the wave of the historical process as any other member of the “world community”.

China offers hope for the possibility of a positive development of the “Great World Game”. But, of course, no guarantees.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook”.

 


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