China's government has hit back at the Trump administration, accusing the US president of "bullying" over his aggressive tactics in the escalating trade conflict between the two nations, saying it will "rise up" should a full-scale trade war break out.
"China doesn't want a trade war, but would rise up to it should it break out," Zhong Shan, China's minister for commerce said in a statement.
So far, the Trump administration has placed tariffs on $250 billion (R3.7 trillion) worth of Chinese goods, affecting more than 5,000 products. The president, however, has said he is willing to "go to 500"- a colloquial term for placing tariffs on all US imports from China.
What was initially seen as an empty threat is now viewed by many observers as a genuine possibility after the latest round of tariffs were announced in late September, after which Trump doubled down on his threats to tax all Chinese imports. Such threats, Zhong said, will not lead China to back down and offer the US concessions.
"There is a view in the US that so long as the US keeps increasing tariffs, China will back down. They don't know the history and culture of China," he said.
"This unyielding nation suffered foreign bullying for many times in history, but never succumbed to it even in the most difficult conditions," he continued.
"The US should not underestimate China's resolve and will."
Zhong's comments came just a few hours after President Trump once again accused China of taking advantage of the US over trade.
"We can't have a one-way street," Trump said during a press conference to discuss the resignation of UN Ambassador Nikki Haley on Tuesday afternoon.
"It's got to be a two-way street. It's been a one-way street for 25 years. We've got to make it a two-way street. We've got to benefit also," he told reporters.
Alongside increasing tariffs, communications between the two sides have become more and more strained in recent weeks. China in September called off planned talks between mid-level officials, and this week US Secretary of State Mike Pompeo exchanged displeased words with Chinese foreign minister Wang Yi during a trip to Beijing.
"Recently, as the US side has been constantly escalating trade friction toward China, it has also adopted a series of actions on the Taiwan issue that harm China's rights and interests, and has made groundless criticism of China's domestic and foreign policies," Wang said at a press conference.
"We demand that the US side stop this kind of mistaken action."
Pompeo hit back, saying the US has "great concerns about the actions that China has taken."
A currency war brewing?
Away from the escalating tensions over trade, the US Treasury has shown new concern about China's devaluation of the renminbi, an action it believes Beijing is using to strengthen its hand with regard to trade by making Chinese goods cheaper.
"As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations," Treasury secretary Steven Mnuchin said in an interview with the Financial Times published on Wednesday.
"We are going to absolutely want to make sure that as part of any trade understanding we come to that currency has to be part of that."
Trump has frequently criticised China for his belief that Beijing is artificially weakening its currency to make Chinese exports more competitive, something he believes Beijing is doing to hurt the US economy.
In August, he claimed that Beijing is a "currency manipulator."
President Muhammadu Buhari said Chinese loans to Nigeria were not “debt trap” as being purported, noting that the nation was able to repay all the loans as and when due.
This was contained in a statement on Tuesday by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu.
According to the statement, President Buhari was dispelling insinuations on how the Asian nation could be putting Nigeria under a massive debt through its financial support.
It said Nigeria’s partnership with China has resulted in the execution of critical infrastructure projects valued at more than $5 billion over the last three years.
It added that the projects being funded were perfectly in line with Nigeria’s Economic Recovery and Growth Plan (ERGP), adding that “some of the debts incurred are self-liquidating.”
“Let me use this opportunity to address and dispel insinuations about a so-called Chinese ‘debt trap’. We have completed and flagged off West Africa’s first urban rail system, valued at $500 million, in Abuja. Before then was the 180km rail line that connects Abuja and Kaduna, completed and commissioned in 2016, and running efficiently since then,” the statement read.
Buhari said Nigeria was leveraging Chinese funding to execute $3.4 billion worth of projects at various stages of completion, including upgrading of airport terminals, the Lagos – Kano rail line, Zungeru hydroelectric power project, and fibre cables for the country’s internet infrastructure, among others.
“Less than 3 months ago, Nigeria signed an agreement for an additional $1billion loan from China for additional rolling stock for the newly constructed rail lines, as well as road rehabilitation and water supply projects,” it added.
Two days ago, the presidential spokesman in a separate statement had said the two nations would sign a $328 million agreement on the National Information and Communication Technology Infrastructure Backbone Phase 11 (NICTIB 11) at the 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC).
On Monday, China pledged a total of $60 billion financial support for projects in Africa, but noted the funds are not for “vanity projects” but for building infrastructure that can remove development bottlenecks.
The Forum on China-Africa Cooperation (FOCAC) has proven to be productive and effective in boosting China-Africa cooperation, a Chinese special envoy said.
Zhou Yuxiao, China’s ambassador for FOCAC affairs, said this in an interview with Xinhua prior to the FOCAC Beijing Summit in September, expressing his confidence in the event’s success.
Zhou said FOCAC has grown into a dynamic mechanism with rich content and tangible results, following the principles of sincerity, practical results, affinity and good faith and the values of friendship, justice, and shared interests.
“China neither imposes its own will on others nor seeks its sphere of influence,” said Zhou.
“The concept of extensive consultation, joint contribution, and shared benefits’ is upheld when China cooperates with African countries.”
FOCAC was founded in 2000 and its membership had grown to have China, 53 African countries having diplomatic relations with China, and the African Union Commission as of June 2018, according to the FOCAC website.
Under the FOCAC framework, there are regular consultations at ministerial and senior-official levels, and between the Chinese Follow-up Committee and the African Diplomatic Corps in China.
Sub-forums on business, youth, health and poverty reduction, and many others, have also been set up.
FOCAC has held two summits gathering leaders of China and African countries, one in Beijing in 2006 and another in Johannesburg in 2015.
“FOCAC is not for idle words, but a platform to unleash real actions,” said Zhou.
The veteran diplomat, who spent years in Africa and served as the Chinese ambassadors to Liberia and Zambia, said he had witnessed the development of FOCAC over the years.
It began with small steps, with a focus on aid, trade, debt relief, personnel training but gradually grew to a comprehensive platform that covers industrialization, agricultural modernization, financing, green development, people-to-people exchanges, and security.
Zhou said FOCAC has won wide support from African countries for its efficient enforcement means, clear time-bound action plans, and an effective evaluation system.
He also attributed the mechanism’s effectiveness to the adequate funding.
For example, Zhou said, China pledged financing support amounting to 60 billion U.S. dollars to implement the ten cooperation plans announced at the 2015 FOCAC summit in Johannesburg.
Projects can also be funded by the Silk Road Fund or the BRICS New Development Bank.
Meanwhile, the Chinese government encourages trustworthy and competent Chinese enterprises to invest in Africa.
Both China’s ability to “walk the walk” and African countries’ active collaboration are key to the success of FOCAC, Zhou said.
“That is why FOCAC has earned wide recognition from African countries as well as the international community, and expectations are high for the upcoming summit,” said Zhou.
The summit is scheduled for Sept. 3 to Sept. 4 in Beijing. Priorities and key directions for China-Africa cooperation in the next three years will be announced.
A key aspect to watch, Zhou said, will be how China and Africa link the Belt and Road Initiative (BRI) with the UN 2030 Agenda for Sustainable Development, the African Union’s Agenda 2063, and African countries’ development plans.
With the “twin engines” of the BRI and FOCAC, China-Africa cooperation is poised to move forward more steadily, faster and further.
“I’m confident that the summit will be a complete success,” said Zhou.
China would invest 14.7 billion dollars in South Africa President Cyril Ramaphosa said on Tuesday after talks between the two countries, news that sent the rand one percent firmer.
Speaking at the same event, Chinese President Xi Jinping said the world’s second-biggest economy would take active measures to expand imports from South Africa to support development in Africa’s most industrialised economy.
Xi arrived South Africa on Monday night for a State visit ahead of the much anticipated 10th BRICS Summit in Sandton.
This is Xi’s third visit to South Africa, having visited the country for the 2013 BRICS Summit, and the 2015 Forum on China-Africa Co-operation. Xi made State visits to Senegal and Rwanda before arriving in South Africa.
The two presidents engaged in bilateral talks and evaluated progress achieved by the two countries on the Strategic Programme with specific reference to the six priority areas identified in 2015.
Those areas include the Alignment of industries to accelerate South Africa’s industrialisation process; Enhancement of co-operation in Special Economic Zones; Enhancement of marine co-operation; Infrastructure development; Human resources co-operation; as well as Financial co-operation.
China has been South Africa’s largest trading partner for nine years in a row, and South Africa is China’s largest trading partner in Africa.
Two-way trade has reached a historic 39billion dollars, 20 times the volume of that at the onset of official diplomatic relations. Direct Chinese investment in the South African economy has also grown eight fold, reaching 10 billion dollars.
While there is a trade imbalance between China and South Africa, both countries have implemented mechanisms to address these discrepancies.
The Central Bank of Nigeria (CBN) on Friday sold Chinese Yuan for the first time through an auction-based system designed for Chinese Yuan foreign exchange window with the People’s Republic of China (PBoC).
According to a report by Bloomberg, CBN Governor, Godwin Emefiele, approved the auction to take place on Friday.
The CBN and PBoC had signed a three-year renewable bilateral currency swap deal worth about N720 billion or 15 billion Renminbi to facilitate trade between Nigeria and China and ensure stability in the foreign exchange market, among others.
Earlier this month, CBN acting Director of Corporate Communications, Isaac Okoroafor, while speaking at a Town hall meeting to enlighten stakeholders on the agreement between the two apex banks in Lagos, said the idea behind the agreement was to ease the pressure on the nation’s foreign exchange reserves which was occasioned by the high demands of U.S dollar for transactions.
“This is will help us build our reserves to give confidence to investors that we have the arsenal to maintain the international value of the Naira,” he said.
The CBN asked banks to bid for renminbi between 9:00 a.m. and midday, while results might probably be announced by Monday, according to the report.
A source who spoke with Bloomberg said that, the size of sale or the exchange rate was not stated by the apex bank, noted that allocations will be for businesses importing raw materials and machinery.
Recall that the CBN said it would announced the exchange rate of transactions in the Chinese Yuan window after the first auction, adding that banks are not expected to charge more than 50 kobo spread on the rate.
China is Nigeria’s biggest trading partner after the U.S., with volumes between the two totaling $9.2 billion in 2017, according to data compiled by Bloomberg. Nigeria runs a deficit, importing $7.6 billion of goods including textiles and machinery from China and exporting just $1.6 billion, mainly oil and gas.
Chinese cities have some of the world's tallest skyscrapers, including the almost 600m-tall Ping An Finance Centre in Shenzhen, the 540m-tall CTF Finance Centre in Guangzhou, and the 527m-tall China Zun tower in Beijing.
More recently. construction began on the mega-tall Shimao Shenzhen-Hong Kong International Centre in Shenzhen.
At 688m tall, it could become the second tallest skyscraper in the world when it opens in 2024. (The even taller Dubai One Tower is also currently under construction.) As Dezeen notes, both high rises will surpass the 631m-tall Shanghai Tower, which currently holds the title of world's second tallest skyscraper.
Shimao Group, the Shenzhen-Hong Kong International Centre's developer, is not releasing many design details yet, but China Daily reports that the firm has invested about $7.5 billion in the project. It will have a floor surface area of over 315,000m².
The tower will be part of a larger complex that includes apartments, offices, a startup incubator, hotels, shopping centres, international schools, and a convention centre in Shenzhen's Longgang district.
The project builds on the city's urbanisation boom, which began in 1979 when China opened itself to capitalism and foreign investment. Shenzhen — a formerly poor fishing community of just 30,000 people — was the first city the country chose to rapidly develop.
Since then, the city has transformed into one of China's largest tech hubs and epicenters of high-rise development. In 2017, Shenzhen completed more skyscrapers than any other city in the world.
By some estimates, Shenzhen's population now exceeds 12.5 million, making it one of the fastest growing megacities.
President Donald Trump directed the US Trade Representative to prepare new tariffs on $200bn (R2.77tr) in Chinese imports Monday as the two nations moved closer to a potential trade war.
The tariffs, which Trump wants set at a 10% rate, would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the two countries. Trump recently ordered tariffs on $50bn (R692.77bn) in Chinese goods in retaliation for intellectual properly theft. The tariffs were quickly matched by China on US exports.
"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," Trump said in a statement Monday announcing the new action. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong."
Trump added: "These tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced."
Trump said that if China responds to this fresh round of tariffs, then he will move to counter "by pursuing additional tariffs on another $200bn (R2.77tr)of goods."
Trump's comments came hours after the top US diplomat accused China of engaging in "predatory economics 101" and an "unprecedented level of larceny" of intellectual property.
He said China's recent claims of "openness and globalisation" are "a joke." He added that China is a "predatory economic government" that is "long overdue in being tackled," matters that include IP theft and Chinese steel and aluminum flooding the US market.
"Everyone knows ... China is the main perpetrator," he said. "It's an unprecedented level of larceny."
"Just ask yourself: Would China have allowed America to do to it what China has done to America?" he said later. "This is predatory economics 101."
The Chinese Embassy in Washington did not immediately respond to a request for comment.
Pompeo raised the trade issue directly with China last week, when he met in Beijing with President Xi Jinping and others.
"I reminded him that's not fair competition," Pompeo said.
Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump's watch. Gary Cohn, Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt — "historic ingredients for an economic slowdown."
Pompeo on Monday described US actions as "economic diplomacy," which, when done right, strengthens national security and international alliances, he added.
"We use American power, economic might and influence as a tool of economic policy," he said. "We do our best to call out unfair economic behaviors as well."
In a statement, Trump says he has an "excellent relationship" with Xi, "but the United States will no longer be taken advantage of on trade by China and other countries in the world."
Beijing - Global carmakers touted their latest electric and SUV models in Beijing on Wednesday, as China promises a more level playing field in the world's largest auto market where domestic vehicles are making major inroads.
Industry behemoths like Volkswagen, Daimler, Toyota, Nissan, Ford and others are displaying more than 1000 models and dozens of concept cars at the Beijing auto show.
Thousands of Chinese auto enthusiasts are expected to wander the halls of the mega exhibition centre this week, with electric cars and gas-guzzling sport-utility vehicles grabbing the spotlight.
Joint ventures imperative for automakers
Nissan presented its first Made in China electric car produced for Chinese consumers, the four-door Sylphy Zero Emission, with a drive range of 338km.
"The new Sylphy Zero Emission is the next step in our electrification strategy for China," said Jose Munoz, Nissan's chief performance officer, adding that the company will unveil 20 electrified models over the next five years.
Auto executives may have their minds on the boiling trade war between Beijing and Washington, with every twist and turn fanning fears that it could bring their plans for China to a screeching halt.
But last week Beijing announced it will liberalise foreign ownership limits in the sector, a move seen as a possible olive branch to President Donald Trump, who has railed against China's policies in the sector.
China currently restricts foreign auto firms to a maximum 50% ownership of joint ventures with local companies.
The changes will end shareholding limits for new energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022.
Foreign automakers who account for more than half of vehicle sales in China have cautiously welcomed the changes, with VW saying it has "strong" local partners in their joint ventures.
"This will have no impact on our JVs. But the overreaching principle is important. Hopefully, liberalisation will as well help for fair competition, and having a level playing field," Jochem Heizmann, CEO of Volkswagen Group China, told reporters.
The show comes as China's market hits a transition period -- the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types.
Chinese consumers are following their American peers toward SUVs while policymakers in Beijing push an all-electric future.
Ride-sharing is also on the up. On Tuesday Didi - China's answer to Uber - announced it had joined forces with some 30 partners, including Renault and Volkswagen, to develop vehicles and products specifically tailored for ride-sharing.
Accounting for some 28.9-million car sales in 2017, the Chinese market could soon match those of the European Union and United States combined.
General Motors sold over four million cars here last year, more than in the United States. Volkswagen sold more than three million, roughly six times its home market.
But domestic firms are outselling foreign firms in the SUV segment.
In the electric car market the figures are even more lopsided, as Beijing has heaped money on projects to dominate what it sees as the future.
At the auto show, the domestic upstarts have a separate exhibition hall mostly to themselves, 124 of the 174 electric car models on display are homegrown.
Government subsidies help consumers purchase the green cars, while policymakers are planning a quota system to force producers to build electric vehicles, with plans to one day phase out gas vehicles altogether.
Volkswagen announced Tuesday investments of $18-billion in electric and autonomous vehicles in China by 2022.
"China is our second home," recently installed chief executive Herbert Diess said at a Beijing press conference, with its market set to be "the biggest" worldwide for electric cars.
African central bank leaders are currently discussing whether to hold the yuan as part of their foreign reserves, highlighting the Chinese money’s rise as one of the world’s major reserve currencies.
Government officials from 14 African nations in eastern and southern Africa met on May 29 2018 in the Zimbabwean capital Harare to discuss sovereign reserve management, according to a report from the official China press agency Xinhua. The forum is being held by the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI), a regional establishment with members including Angola, Kenya, Tanzania, Zambia, and Tanzania. Besides strategizing on how to improve the weakened external positions of member nations during the global economic downturn, policymakers will also debate how to keep pace with large shifts in the global economy, where China has risen as a dominant and disruptive player.
“Most countries in the MEFMI region have loans or grants from China and it would only make economic sense to repay in renminbi (Chinese yuan),” MEFMI spokesperson Gladys Siwela-Jadagu said. “With China as the largest trading partner of over 130 countries, the main challenge for African countries is how to benefit from the new pattern of international commerce,” she added.
The move underscores China’s push to internationalize its currency in order to promote trade and investment, besides boosting its soft power. This is especially true in the era of Xi Jinping whose extended rule and assertive governance are set to reshape the country’s diplomatic, military, and economic place in coming years. The move is also indicative of China’s emergence as a greater power willing to fill in a financial gap, especially in the isolationist post-Brexit and “America first” era.
For Africa, the current interest in the yuan signifies the growing Sino-Africa relations, especially as China dishes out loans, funding projects ranging from energy and transportation to agriculture, telecommunications, and infrastructure. As China takes on greater responsibilities as a world power, many African nations are also signing up to join its internationally-funded bank which offers loans to emerging economies with fewer strings attached— an action that could entrap many in debt.
Beijing’s tight control on capital flows and a lack of transparency in monetary policies, however, continue to dampen global investor confidence in the yuan. Yet that hasn’t stopped the International Monetary Fund from adding the renminbi to the list of the Special Drawing Rights basket, an alternative global reserve asset to the dollar.
This has pushed banks globally to replace dollar reserves with the yuan, including the European Central Bank which converted €500 million worth of its US dollar reserves into the Chinese currency last year. In March, Nigeria also signed a currency swap worth $2.4 billion with China, allowing companies to avoid the difficulty of dealing in dollars while doing business in China and vice-versa.