The US seems all too determined to drag others along with it in a clear attempt to “separate” China from the global economy and block or delay any progress in China’s new technology sector.
In place of “separation” a euphemism has recently been found in English – “to reduce risk” – that is, to eliminate risks – but it’s basically the same thing.
Not everyone agrees, and that is why Ngozi Okonjo-Iweala, director-general of the World Trade Organization, warned of the danger of this strategy at the last meeting in Tanjin, dubbed the Davos of Asia.
According to this Nigerian economist, if two trade blocs are formed, which may be from the Western and the so-called global South, world GDP will suffer in the long run, which could fall as low as 5 percent.
The International Monetary Fund is even more pessimistic in this regard and says the decline could reach 7 percent.
A huge volume equivalent to the GDP of Japan, the world’s third-largest economy, and in Okonjo-Iweala’s view “there is no way the world can afford it”.
Maybe it won’t be able to afford it, but that doesn’t seem like something to worry too much about Washington, which is already preparing the next steps in this direction.
One of them, perhaps most important because of its possible impact on China, is something like “Outbound Investment Screening”, which in English is called “Outbound Investment Screening”.
This means that the investments that US companies want to make in that country will pass through the ideological sieve and will be banned if it implies undesirable technology transfer.
In principle, it is about technology for military use, but there is nothing stopping it from expanding into all sectors that can benefit the technological development of the country, which the US currently sees as its main economic rival.
According to a recent report by the Washington-based Peterson Institute for International Economics, the rules set by the Joe Biden government are not clear at all and will create great distrust in international trade.
Beijing is skeptical of Washington’s intentions, and therefore the head of the Chinese government, Li Qiang, warned at the Tianjin meeting that imposing “invisible” barriers, as claimed by the United States, could only lead to “fragmentation and even conflict.”
But not all of the West agrees with the strategy chosen by Washington, so New Zealand Prime Minister Labor Christopher Hipkins says he is determined to intensify trade relations with China.
It seems that not all Europeans are willing to follow Washington on this issue: the head of Hungarian diplomacy, Peter Szijarto, condemned the “extremely ideological” atmosphere in the EU on this issue in the Chinese city in question.
Not only have three main German automakers – Audi, BMW and Mercedes Benz – opened plants in Hungary, but the country has also benefited from multi-million dollar investments from Chinese auto battery maker CATL.
“Either segregation or risk-taking (risk elimination) would be suicidal for the European economy and especially for German industry,” Szijarto said at the Tianjin meeting.