China Daily - 07.08.2019

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CHINA DAILY Wednesday, August 7, 2019 | 9

US Trade Representative Robert Lighthiz-

er and Treasury Secretary Steven Mnuchin

are reportedly against imposing new tar-

iffs on Chinese goods.

The talks at the current stage are more

political than commercial in nature since

the two sides’ differences over trade and

intellectual property rights mask the fun-

damental change in bilateral relations and

conflicts on various fronts.

Contentious issues in Sino-US relations

cannot be easily resolved. And China

knows well that concessions on trade

would not necessarily ease tensions, espe-

cially on issues of core interest such as Tai-

wan and the South China Sea.

But despite the dilemma, the termina-

tion of the talks is unlikely as the trade

rules and new interaction framework

between China and the US will play an

important role in helping reform the

World Trade Organization and improve

the global trade mechanism.

On Monday, the yuan went beyond 7

against the US dollar for the first time

since 2010, prompting some to argue

that China has manipulated the

exchange rate to offset the impact of the

new US tariffs.

Such arguments are baseless, as Wash-

ington would likely wage a financial war

against Beijing if the yuan devalues by

more than 8 percent, jeopardizing bilateral

relations.

Since China and the US are locked in

conflicts on multiple fronts, it is essential

to take damage control measures to pre-

vent bilateral relations from worsening

further, because that would send shock-

waves across the world and destabilize the

global economy.

Zhu Feng, director of the Institute of

International Studies, Nanjing University

Populist move to garner

support for US leader

The US leader has threatened to levy

new tariffs on Chinese goods for the fol-

lowing reasons: to garner more votes in

the 2020 presidential election by projec-

ting to act tough against China; to “pun-

ish” China ostensibly for not importing

soybeans from the US as quickly and

substantially as the White House expect-

ed it to; and for being unaware of the

changes in China’s negotiation strategy

and style.

That the US has suddenly labeled China

as a currency manipulator shows Wash-

ington’s resolve to further pressure China.

Which will add more uncertainties to

both economies as well as the world econ-

omy. And the US leader will be forced to

strike a balance between his craving for

re-election and assuage Wall Street.

After a year of back and forth, both par-

ties seem to be prepared for the worst-case

scenario.

Notably, China is hearing more hawkish

voices, even those calling for decoupling

the US and Chinese economies.

So instead of looking for external media-

tors to help resolve their disputes, the two

sides have to find an amiable way to settle

their differences.

Chen Fengying, a senior researcher in

world economy at the China Institutes of

Contemporary International Relations

The views don’t necessarily represent those

of China Daily.

Ding Meng

Fed’s rate cut

to have limited

impact on China

T

he US Federal Reserve cut the

interest rate by 0.25 percent on

July 31 for the first time since the

2008 global financial crisis. The

Fed said the rate cut is in light of the impli-

cations of the global economic outlook and

muted inflation pressure. Fed Chairman

Jerome Powell, on his part, said the rate cut

is a mid-cycle adjustment to policy rather

than the beginning of a series of rate cuts.

Compared with the large-scale interest

cuts to cope with the 2008 global financial

crisis, the rate cut this time is more like a

“preventative” measure.

Many real economy indicators show the

US’ economic growth has been higher and

faster than its potential growth rate. Last

year, the United States’ GDP grew 2.9 per-

cent, while in the first half of 2019 its esti-

mated growth rate was 2.6 percent, which

was higher than the 2.5 percent potential

growth rate based on US economic data

since 1990.

The labor market and inflation are two

major concerns for the Fed’s policymakers.

At present, the US’ non-agricultural

employment rate is high while the unem-

ployment rate remains at a historical low. If

the US can sustain a 0.2 percent monthly

growth rate of core inflation, it would be

able to keep the inflation rate at or below

the 2 percent target set by the Fed.

But taking economic growth, employ-

ment and inflation into consideration, the

Fed could have waited for some time

before cutting the interest rate. Perhaps

the main reason for the Fed to cut the

interest rate is to prevent global economic

downturn in the backdrop of the US-China

trade war.

First, the Fed is more worried about the

negative impact of the Sino-US trade war

and US-European Union trade frictions on

the US economy, because any major disrup-

tion in the global trade chain can greatly

undermine the US economy.

Second, in July the International Mone-

tary Fund downgraded its forecast for glob-

al economic growth for the second time this

year because of sluggish global demands,

which could weaken the US economy.

And third, the US’ economic growth has

been propelled largely by tax cuts, which

will gradually fade out. As such, it is doubt-

ful whether it could maintain its current

economic growth rate.

Besides, the Fed’s rate cut could consoli-

date the US’ financial condition, which in

turn could help the US maintain a relatively

healthy economic growth rate. But at the

same time, the rate cut could be conducive

to promoting global economic growth,

which in turn could further promote Chi-

na’s economic growth.

Also, the Fed’s previous interest rate

hikes increased the real interest differen-

tials between China and the US, putting

more pressure on China to depreciate its

currency and increasing the risk of foreign

exchange outflow. So to keep the interest

rate stable and maintain the international

balance of payment, China’s monetary poli-

cy should centered on its economy.

Although the Fed’s rate cut doesn’t neces-

sarily mean the US has initiated its mone-

tary easing cycle, it does indicate that the

US has stopped its interest hike cycle.

Which means China should devise a mone-

tary policy that suits its domestic economic

conditions.

Judging by the monetary policy signals

given by the recent meeting of the Political

Bureau of the Communist Party of China

Central Committee and China’s central

bank, the country is not expected to alto-

gether ease its monetary policy.

The Fed’s remarks indicate the rate cut

this time will not open the gate for continu-

ous interest rate cuts. Moreover, weakening

the dollar is not an option for the US eco-

nomic decision-makers. Also, if the US

doesn’t opt for competitive devaluation of

the dollar, it would be conducive to main-

taining stability in the foreign exchange

market.

This probably means there will not be

any competition for devaluing currencies in

the short term, which could be beneficial to

Chinese exporters in the backdrop of the

trade war.

The author is a senior analyst with the

Bank of China, Macao Branch. The views

don’t necessarily represent those of China

Daily.

... the Fed’s rate cut could

consolidate the US’

financial condition ... But at

the same time, the rate cut

could be conducive to

promoting global economic

growth, which in turn could

further promote China’s

economic growth.

has attended and/or hosted numerous

regional and global summits in an effort

to boost cooperation and combat disease.

Many focus on using the Belt and Road

Initiative to improve global health. And

often overlooked are Beijing’s efforts to

establish international standards on prod-

ucts related to global health such as food

additives and pesticide residues.

With respect to health information

exchange, China has much to share with

the world — particularly knowledge about

its spectacular health care accomplish-

ments. For example, more than 95 percent

of China’s population now enjoys basic

health care coverage. And life expectancy

has climbed to 76.7 years compared with

35 years in the 1940s.

China’s successes in controlling tropical

disease, reducing infant mortality, con-

taining malaria and schistosomiasis, and

battling deadly infectious diseases (partic-

ularly tuberculosis) are truly remarkable

and deserving of study as valuable lessons

for the global community. Not surprising-

ly, Chinese universities are accelerating

research in health policy and expanding

cooperative programs with foreign uni-

versities.

Unfortunately, however, some coopera-

tive programs in the US have fallen victim

to the “anti-China hysteria” that has swept

parts of Washington. Medical programs at

prestigious institutions ranging from the

M.D. Anderson Cancer Center to Johns

Hopkins University — have been pres-

sured by the US National Institute for

Health to scuttle exchange programs.

In sum, five decades after China

launched a modest health assistance initi-

ative in Algeria, it has made rapid progress

in each domain of global health. In many

respects, the country has followed its own

distinctive approach in each area. Under-

standably, this practice confuses and con-

founds some foreign observers. But one

fact is perfectly clear. Namely, observers

should anticipate that in the future China

will play an increasingly important role in

shaping the contours of global health. As

Tedros Adhanom Ghebreyesus, director-

general of WHO, observed, this is good

news because “we can all learn something

from China”.

The author is a distinguished professor

and the James F. Morris endowed profes-

sor of Political Science at Missouri State

University. The views expressed in this

article are the author’s own and do not

necessarily reflect those of Missouri State

University, the state of Missouri, the US

government or China Daily.

Dennis V. Hickey

China’s contributions to global health considerable

F

or most of the 19th and much of

the 20th century, China was

called, “the sick man of Asia”. But

those days are over. As President

Xi Jinping observed, “China has bid fare-

well to the problems that plagued its peo-

ple for thousands of years, including

hunger, shortages and poverty.” In a mat-

ter of decades, China has successfully

transformed itself from a closed and rela-

tively backward country into a global eco-

nomic and political power.

China’s ascendency is generating some

questions. One question centers on the

country’s role in global health. This is

because China is making rapid progress in

all four primary domains of global health

— health aid, health security, health gov-

ernance and health information exchange.

China’s health aid was launched in 1963

when its first medical teams were dis-

patched to Algeria. Today, Beijing has

medical teams in more than 40 African

countries and dozens of others posted

elsewhere around the global South.

Employing a project approach, the largest

share of China’s health assistance is spent

on medical teams and donated facilities. A

small number of foreign critics allege that

Beijing uses such aid to prop up “authori-

tarian regimes”.

However, a group of more than 100

researchers at major universities located

in the United States and Europe teamed

up to shed some light on the matter. The

so-called “AidData Project” found that

China’s health assistance “does not dis-

criminate based on the recipient coun-

tries’ governance”. It also concluded that,

contrary to popular misperception, Chi-

nese aid is not inferior to Western aid. Yet

another reputable study punctured the

myth that China channels its aid preferen-

tially to resource-rich countries.

In the past decades, the world has con-

fronted periodic crises generated by infec-

tious disease. As President Xi observed,

these pandemics have “sounded the alarm

for international health security”. Each

has cost countless lives and billions of US

dollars to combat. Given the situation,

China has invested in various initiatives

designed to detect emerging health

threats early, develop and stockpile vacci-

nes and drugs, and establish more robust

health systems to deliver preventive tools

and cures.

The basic idea is to get out ahead of new

health threats before they become global

disasters. Disease control and internation-

al cooperation is accelerating to unprece-

dented levels. Especially noteworthy is

China’s partnership with the World

Health Organization to strengthen health

security along the Silk Road Economic

Belt and the 21st Century Maritime Silk

Road. And its response to the 2014-15 Ebo-

la epidemic in Africa drew praise from

WHO. Some also find it significant that

China has bolstered domestic, regional

and global health security by addressing

commodity and food safety issues and

aggressively tackling its problems with air

pollution.

Since the early 2000s, China has played

a more active role in global health govern-

ance. The country participates in all of the

United Nations’ specialized bodies relat-

ing to health — including WHO, UNICEF,

UNFPA, UNAIDS — and other multilater-

al health forums.

Moreover, as discussed in the govern-

ment’s 2017 White Paper on Public Health,

China is now energetically, “taking part in

the formulation of international medical

and health rules”. In recent years, China

SONG CHEN /CHINA DAILY

US tariffs will do more damage to ties

Efforts needed

to rescue bilateral ties

That Washington has gone back on the

consensus reached by the two heads of

state on the sidelines of the G20 Summit

in Osaka in June suggests the US leader

believes the new 10 percent tariffs on

another $300 billion of Chinese-made

goods will earn him more votes in the

2020 presidential election.

Deft at using public diplomacy and

discourse through his Twitter account,

the US leader knows how to draw nation-

al and global attention to a particular

issue in order to fulfill his own political

agenda.

Yet his move, which is a continuation of

his “maximum pressure” strategy, is

expected to do more damage than good to

the US, not least because China will never

submit to the US’ demands.

More important, the US administration

is both unreasonable and arrogant in its

dealing with other countries.

The US leader’s reckless pursuit of per-

sonal gain and glory has invited opposi-

tion inside the White House, too, as both

Editor's Note: On Aug 1, the day after the 12th round of China-US trade talks concluded on a “constructive” note, according to US negotiators, the United States threatened to slap

10 percent additional duties on another $300 billion of Chinese goods starting Sept 1. And on Tuesday the US designated China as a currency manipulator and China announced to

partly suspend purchase of US farm produce. Why has the US gone back on its words again? And is there a threat of a breakdown in the talks? Two experts share their views on the

issue with China Daily’s Liu Jianna. Excerpts follow: