The United States has set off a trade war, Indonesia has stabbed China in the back, and plans to impose a 200% tax on Chinese goods, Brazil, Vietnam, and India are also eyeing each other, surrounded by wolves, how can China break the situation?
Backstabbing China? Indonesia Proposes to Impose 200% Tariff on Chinese Goods
On May 14 this year, the Biden administration announced a 100% tariff on Chinese-made electric vehicles, which not only worsened US-China relations again, but also set a bad precedent for violating WTO principles.
At that time, Xiaolin thought that as soon as this example was opened, there would definitely be countries following the example of the United States, but what Xiaolin didn't expect was that this kind of imitation would come so quickly:
On June 28, local time, Indonesian Trade Minister Zulkifli Hassan announced that Indonesia would impose a "safeguard tariff" of 100% to 200% on many imported products from footwear to ceramics.
While not announcing that it was directed at China, Hassan made it clear that China is now redirecting exports of Chinese products to other markets, including Indonesia, after the trade war with the West has rejected them, which could lead to "the possibility that our micro, small and medium-sized businesses will face closure." ”
As for whether he has the right to do so, Hassan said that it is reasonable: "The United States can impose a 200% tariff on imported ceramics or clothing; We can certainly do the same. ”
In fact, Shinobayashi noticed that aside from the excuse of the United States, the Indonesian side has long had the intention of preventing Chinese products from entering its own market. Late last year, Indonesia enacted a regulation to tighten regulations on more than 3,000 imported goods, but the regulation was soon rescind after Indonesia's domestic industry said it was blocking the flow of imported materials needed by the country's industry.
Now, Indonesia is drafting a new ministerial regulation to address concerns from stakeholders that earlier regulations to protect local industries from the influx of Chinese manufacturing were inadequate.
All in all, Indonesia is going to fight China to the end on the tariff issue.
However, Shinobayashi noted that in 2023, the total bilateral economic and trade volume between the two countries will be 139.4 billion US dollars, making China Indonesia's largest foreign trade partner for the eleventh consecutive year.
And in January this year, when the first round of BRICS expansion officially came into effect, Indonesian Foreign Minister Retno also said that Indonesia will continue to study the possibility of joining the BRICS and is weighing the benefits of promoting membership.
Therefore, in the face of its largest foreign trade partner today, and possibly a future BRICS partner, Indonesia is so cold to China?
But as mentioned earlier, Shinobayashi is not surprised by Indonesia's choice:
Like almost all ASEAN countries, Indonesia is eager to strengthen its economic and trade ties with China and catch the high-speed train of China's economic rise, but few people have noticed that this is actually a precondition that it does not have a devastating impact on Indonesia's domestic industries.
In other words, the large-scale entry of cheap Chinese low-end industrial products into the Indonesian market, although it is beneficial to the Indonesian consumer group, will also cause an impact similar to "dumping" on similar enterprises in the country, which is not conducive to the long-term healthy development of Indonesia's domestic industry.
To put it bluntly, ASEAN countries just hope to open their local markets to China in exchange for China's capital and technology to come to their own countries, that is, to transfer China's low-end industrial chains to their own countries, so that these industrial chains become their own things, so as to achieve the rapid development of the country.
Shinobayashi noticed that Malaysia, which is next to Indonesia, is the country that has been most active in this matter in the past two years, which has also made Malaysia extremely pro-China in diplomatic posture in the past two years.
So why doesn't Indonesia follow Malaysia's example?
This is because Indonesia has always been the first power in ASEAN, compared with Malaysia, which is still climbing, its domestic corresponding low-end industrial chain has a sufficient degree of maturity, but it is quite wary of the introduction of Chinese counterparts - in January this year, Indonesian Foreign Minister Retno said that he was "still studying" the issue of joining the BRICS, in fact, it is based on this reason.
On June 25, Russian Foreign Minister Sergei Lavrov announced that after the BRICS member countries voted to integrate the five new members that had just joined, the admission of new members needed to be temporarily terminated, which means that even if Indonesia decides to join the BRICS, it is far away.
According to Shinobayashi, this may also be one of the reasons why Indonesia intends to "knock" China by raising tariff barriers.
Of course, to tell the truth, Shinobayashi believes that Indonesia has never been our so-called partner, let alone friends, everyone is talking business, and we should be mentally prepared for this kind of "backstabbing" from the beginning.
India, Vietnam, and Brazil are all eyeing Chinese goods
In fact, Shinobayashi noticed that in addition to Indonesia, Brazil and Vietnam, two countries, one is a member of the BRICS, last year vowed to fight with China against the hegemony of the dollar, and the other is a traditional old neighbor, which has also accelerated the pace of getting closer to China since last year, plus India, which has a bad relationship with us, is actually thinking about similar things now.
According to a recent report by the French newspaper Le Monde, between 2022 and 2023, a large amount of Chinese steel flocked to overseas markets due to the difficulties of China's domestic infrastructure, which not only caused global steel prices to fall by 25%, but also increased the total amount of steel imported by Brazil from China by 50%.
As a result, domestic steel production fell by 6% over the same period, forcing several local Brazilian steel companies to close factories and lay off workers, destroying thousands of jobs.
According to the report, CSN, Brazil's largest steel company, has asked the Brazilian government in March to conduct an "anti-dumping" investigation on several Chinese products. Although the left-wing Lula government has not yet responded to this, the report believes that the Brazilian government should also start in the near future as Chile, Brazil and Mexico have raised steel import tariffs, and the Indian government is also negotiating whether to impose tariffs on Chinese steel products.
In addition, a report released in May by Japanese investment bank Nomura Securities pointed out that China's trade relationship with Asia "is undergoing structural changes", with many Asian countries struggling to balance trade with China as China's exports to Asia increase and imports decrease.
A typical example is Vietnam, although after entering 2023, China-Vietnam relations began to enter a new stage of upward period, but also in 2023, the total bilateral economic and trade volume between China and Vietnam decreased by 0.5% year-on-year, the first decline since 2009.
In fact, many media have noted that in Vietnam's high-level diplomatic exchanges with China in 2023, increasing Vietnam's exports to China has always been one of the key requirements put forward by Vietnam. Although under this urging, Vietnam's exports to China did increase by 4.8% in 2023 compared with the previous year, Xiaolin also noted that this "achievement" was achieved under the premise that China as a whole maintained a huge surplus of US$45.5 billion in the bilateral economic and trade volume between China and Vietnam in 2023.
So will China be able to tolerate the continuation of this trend of shrinking foreign surpluses over time? And if this kind of concession is not made, will these partners also turn their faces and start to follow the example of the United States and erect tariff barriers against China?
The French newspaper "Le Monde" quoted an expert as saying that for a long time, the development model of the geese form, that is, when a developing country takes off and enters the high-end market, it will leave room for the development of another developing country, which is the cornerstone of the smooth development of the global economy, but the current Chinese manufacturing industry does not seem to intend to leave any space for other countries.
According to Shinobayashi, this kind of accusation is really hard to hear, but it does prompt us to recognize the fact that it is true:
Don't think that only the United States and the West are our competitors. The United States and the West want to control high-end industries, and the vast third world is eyeing low-end industries, and the global competition problems that China is facing are actually far more severe than we imagined.