Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
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An increasing proportion of young people no longer willing to wait tables in China as restaurant owners look to new technology for answers
Catering robots developed by Pudu Tech, the three-year-old Shenzhen start-up, have been adopted by thousands of restaurants in China, as well as some foreign countries including Singapore, Korea, and Germany. Photo: Handout
Two years ago, Bao Xiangyi quit school and worked as a waiter in a restaurant for half a year to support himself, and the 19 year-old remembers the time vividly.
“It was crazy working in some Chinese restaurants. My WeChat steps number sometimes hit 20,000 in a day [just by delivering meals in the restaurant],” said Bao.
The WeChat steps fitness tracking function gauges how many steps you literally take and 20,000 steps per day can be compared with a whole day of outdoor activity, ranking you very high in a typical friends circle.
Bao, now a university student in Hangzhou, Zhejiang province, quit the waiter job and went back to school.
“I couldn’t accept that for 365 days a year every day would be the same,” said Bao. “Those days were filled with complete darkness and I felt like my whole life would be spent as an inferior and insignificant waiter.”
Olivia Niu, a 23-year-old Hong Kong resident, quit her waiter job on the first day. “It was too busy during peak meal times. I was so hungry myself but I needed to pack meals for customers,” said Niu.
Being a waiter has never been a top career choice but it remains a big source of employment in China. Yang Chunyan, a waitress at the Lanlifang Hotel in Wenzhou in southeastern China, has two children and says she chose the job because she needs to make a living.
Catering robots developed by Pudu Tech, the three-year-old Shenzhen start-up. Photo: Handout
Today’s young generation have their sights on other areas though. Of those born after 2000, 24.5 per cent want careers related to literature and art. This is followed by education and the IT industry in second and third place, according to a recent report by Tencent QQ and China Youth Daily.
Help may now be at hand though for restaurants struggling to find qualified table staff who are able to withstand the daily stress of juggling hundreds of orders of food. The answer comes in the form of robots.
Japan’s industrial robots industry becomes latest victim of the trade war
Shenzhen Pudu Technology, a three-year-old Shenzhen start-up, is among the tech companies offering catering robots to thousands of restaurant owners who are scrambling to try to plug a labour shortfall with new tech such as machines, artificial intelligence and online ordering systems. It has deployed robots in China, Singapore, Korea and Germany.
With Pudu’s robot, kitchen staff can put meals on the robot, enter the table number, and the robot will deliver it to the consumer. While an average human waiter can deliver 200 meals per day – the robots can manage 300 to 400 orders.
“Nearly every restaurant owner [in China] says it’s hard to recruit people to [work as a waiter],” Zhang Tao, the founder and CEO of Pudu tech said in an interview this week. “China’s food market is huge and delivering meals is a process with high demand and frequency.”
Pudu’s robots can be used for ten years and cost between 40,000 yuan (US$5,650) and 50,000 yuan. That’s less than the average yearly salary of restaurant and hotel workers in China’s southern Guangdong province, which is roughly 60,000 yuan, according to a report co-authored by the South China Market of Human Resources and other organisations.
As such, it is no surprise that more restaurants want to use catering robots.
According to research firm Verified Market Research, the global robotics services market was valued at US$11.62 billion in 2018 and is projected to reach US$35.67 billion by 2026. Haidilao, China’s top hotpot restaurant, has not only adopted service robots but also introduced a smart restaurant with a mechanised kitchen in Beijing last year. And in China’s tech hub of Shenzhen, it is hard to pay without an app as most of the restaurants have deployed an online order service.
Can robots and virtual fruit help the elderly get well in China?
China’s labour force advantage has also shrank in recent years. The working-age population, people between 16 and 59 years’ old, has reduced by 40 million since 2012 to 897 million, accounting for 64 per cent of China’s roughly 1.4 billion people in 2018, according to the national bureau of statistics.
By comparison, those of working age accounted for 69 per cent of the total population in 2012.
Other Chinese robotic companies are also entering the market. SIASUN Robot & Automation Co, a hi-tech listed enterprise belonging to the Chinese Academy of Sciences, introduced their catering robots to China’s restaurants in 2017. Delivery robots developed by Shanghai-based Keenon Robotics Co., founded in 2010, are serving people in China and overseas markets such as the US, Italy and Spain.
Pudu projects it will turn a profit this year and it is in talks with venture capital firms to raise a new round of funding, which will be announced as early as October, according to Zhang. Last year it raised 50 million yuan in a round led by Shenzhen-based QC capital.
To be sure, the service industry is still the biggest employer in China, with 359 million workers and accounting for 46.3 per cent of a working population of 776 million people in 2018, according to the national bureau of statistics.
And new technology sometimes offers up new problems – in this case, service with a smile.
“When we go out for dinner, what we want is service. It is not as simple as just delivering meals,” said Wong Kam-Fai, a professor in engineering at the Chinese University of Hong Kong and a national expert appointed by the Chinese Association for Artificial Intelligence. “If they [robot makers] can add an emotional side in future, it might work better.”
Technology companies also face some practical issues like unusual restaurant layouts.
“Having a [catering robot] traffic jam on the way to the kitchen is normal. Some passageways are very narrow with many zigzags,” Zhang said. “But this can be improved in future with more standardised layouts.”
Multi-floor restaurants can also be a problem.
Dai Qi, a sales manager at the Lanlifang Hotel, said it is impossible for her restaurant to adopt the robot. “Our kitchen is on the third floor, and we have boxes on the second, third, and fourth floor. So the robots can’t work [to deliver meals to downstairs/upstairs],” Dai said.
But Bao says he has no plans to return to being a waiter, so the robots may have the edge.
“Why are human beings doing something robots can do? Let’s do something they [robots] can’t,” Bao said.
ANKARA (Reuters) – Turkey sees opportunity to boost trade with the United States amid Washington’s trade war with Beijing, the Turkish trade minister said on Tuesday, reinforcing an ambitious goal of quadrupling the bilateral trade to $100 billion (81.1 billion pounds) a year.
“We have determined that the issues between the U.S. and China will create a significant opportunity for trade in various sectors,” Trade Minister Ruhsar Pekcan told a joint press conference with U.S. Secretary of Commerce Wilbur Ross.
“We have expressed to the U.S. side our readiness to provide goods,” she said.
Pekcan added that trade and investment would be the main topic when U.S. President Donald Trump and Turkish counterpart Tayyip Erdogan meet during the United Nations General Assembly later this month in New York.
On Saturday, Turkey asked the United States to lift trade barriers during talks aimed at sharply increasing bilateral commerce.
Washington and Ankara’s goal of $100 billion in trade a year comes despite the prospect of U.S. sanctions over Turkey’s purchase of Russian S-400 missile defence systems. The United States says trade with Turkey totalled $24 billion in 2017, with the U.S. surplus standing at $1.5 billion.
The White House said in May it was ending a preferential trade agreement with Turkey, saying Turkey’s level of economic development meant it was no longer eligible for the support.
Chinese government advisers say Beijing has not reached direct intervention point but that could change if the violence continues
Military action would trigger international backlash, observers say, as US expresses concern over reported paramilitary movements and ‘erosion of Hong Kong’s autonomy’
Footage of trucks from the paramilitary People’s Armed Police in Shenzhen has circulated online. Photo: Handout
The unrest in Hong Kong does not yet warrant direct intervention by Beijing despite hardening public sentiment and calls for tougher action in mainland China, according to Chinese government advisers.
Shi Yinhong, an international relations expert at Renmin University and an adviser to the State Council – China’s cabinet – said China would risk damaging its ties with the United States and other major foreign powers, upsetting its own development and losing Hong Kong’s special status if it took the matter directly into its hands.
“I don’t think we need to use troops. Hong Kong police will gradually escalate their action and they haven’t exhausted their means,” Shi said, expressing a view shared by other mainland government advisers and academics.
But he warned that if the violence and chaos continued, it “won’t be too far away from reaching that point”.
A US State Department spokeswoman said the United States was “deeply concerned” about reports of paramilitary movements along the Hong Kong border and reiterated a US call for all sides to refrain from violence.
She said it was important for the Hong Kong government to respect “freedoms of speech and peaceful assembly” and for Beijing to adhere to its commitments to allow a high degree of autonomy for Hong Kong.
She said the protests reflected “broad and legitimate concerns about the erosion of Hong Kong’s autonomy”.
“The continued erosion of Hong Kong’s autonomy puts at risk its long-established special status in international affairs,” she said.
brought the city’s air traffic to a halt and triggered a huge backlash on the mainland
, where the public feel they have been wrongly targeted by the increasingly violent protesters. Many demanded the central government take action to end the chaos.
The tension deepened after US President Donald Trump, citing intelligence sources,
to the border with Hong Kong. Trump described the situation in the city as “tricky” and called on all sides to remain “calm and safe”.
Footage of trucks from the paramilitary People’s Armed Police rolling into Shenzhen began circulating online on Saturday.
Beijing ‘unlikely to intervene’ in Hong Kong as pressure mounts on police
But Shi and others said direct intervention would be too costly to China and would only be used when all other methods had been exhausted.
“As the trade war with the US goes on, Hong Kong’s importance to our financial system is getting bigger,” Shi said. “If Beijing intervenes with too much assertiveness, the US might revoke the preferential status of Hong Kong.”
He was referring to the US’ 1992 Hong Kong Policy Act which gives the city a special status. In June, American lawmakers introduced a bipartisan bill requiring the US government to examine Hong Kong’s autonomy annually to decide whether to extend the arrangement.
Losing that status could cripple the operations of many businesses based in Hong Kong, said Shen Dingli, a Shanghai-based international affairs expert.
A satellite image appears to show a close-up of Chinese military vehicles at Shenzhen Bay Sports Centre in Shenzhen. Photo: Maxar Technologies
Wang Yong, another specialist on international political economy with Peking University, agreed.
“There would be a lot of opposition from interest groups in the US. Hong Kong is the bridgehead for many multinational corporations and investors from Wall Street to get into the Chinese market,” said Wang, who also teaches at an academy affiliated with China’s Ministry of Foreign Affairs.
“Hong Kong and the Chinese government will need to handle this with extra care, so as not to give any ammunition to hawks in the United States.
“If Hong Kong is not handled properly, it could add tensions to the bilateral ties and ruin any prospect of a trade deal.”
China rejects requests for US warships to visit Hong Kong amid protests Pang Zhongying, an international relations specialist at Ocean University of China in Qingdao, said direct intervention could also damage China’s ties with other countries.
“The whole world is watching. Beijing has exercised restraint for two months and still hasn’t taken any clear action because this is not an easy choice,” said Pang, who is also a member of the Beijing-based Pangoal Institution, a think tank that advises several ministerial offices.
While some observers said Beijing was under political pressure to end the protests in Hong Kong before October 1 – the 70th anniversary of the founding of the People’s Republic, Shi said the central government would not lose patience so easily.
“National Day [on October 1] is an important time, but the Chinese government is not naive to believe there has to be peace under all heaven then,” he said.
“It’s only a bit more than a month from now, we can almost say for sure the trade war will still be on by then and a major turning point in Hong Kong is not likely to happen. But the celebration must go on.”
Three-year-old security treaty between US and two key allies under threat as tensions between Seoul and Tokyo continue to escalate
End of General Security of Military Information Agreement risks undermining Washington’s influence in the region
South Korean protesters hold signs saying “No Abe” during a rally demanding the abolition of the General Security of Military Information Agreement. Photo: AP
The possible termination of a military information-sharing pact between South Korea and Japan would be a symbolic victory for China, a security analyst has warned.
Recent tension between the two countries recently threatened to spill over into the sphere of intelligence after Seoul signalled that it may pull out of the General Security of Military Information Agreement (GSOMIA) pact.
The agreement signed in 2016 enables three-way intelligence gathering between the US and its two allies and provides a crucial framework for coping with North Korea’s nuclear and missile threats.
But the escalating trade dispute between Seoul and Tokyo, prompted by a dispute about Japan’s colonial legacy, has left the future of the deal in jeopardy as the annual deadline for its renewal looms.
Japan approves first hi-tech exports to South Korea since start of ‘trade war’ – but with a warning
Ramon Pacheco Pardo, the first Korea chair at the Institute for European Studies at Vrije Universiteit Brussel in Belgium, said scrapping the pact would help strengthen China’s influence in the Asia-Pacific region at the expense of the US.
“It is undeniable that termination of GSOMIA would dent the US-South Korea-Japan alliance. The alliance system in northeast Asia will be weaker, strengthening China in relative terms in the process. “This could embolden China and Russia to strengthen their military cooperation in northeast Asia, said Pardo, a member of the non-governmental EU Council for Security Cooperation in the Asia-Pacific.
“Ending GSOMIA would signal that South Korea and Japan are not ready to follow Washington’s lead in the way the latter would like, given the political capital that successive US administrations spent in convincing both countries to share intelligence.”
Ramon Pacheco Pardo said the collapse of the pact would have a largely symbolic impact on China. Photo: Facebook
But Pardo also stressed that the intelligence alliance was not directly targeting China.
“While it is true that GSOMIA serves to connect the weakest link of the US-South Korea-Japan security triangle, ultimately South Korea’s security posture and the capabilities of each country independently mean that it is difficult to argue that the agreement is a concerted effort to contain China.”
“After all, Beijing does not share any significant information on North Korea’s nuclear and missile programmes with South Korea, Japan or the US.
“This is not going to change any time soon. So the good news for China would be symbolic rather than substantial.”
US missiles, jittery neighbours and South Korea’s big security dilemma
Beijing warned on Tuesday that it would take “countermeasures” if the US deployed ground-based missiles in either Japan or South Korea, and Pardo argued that scrapping the intelligence-sharing pact would expose the weaknesses in their co-ordinated approach towards China.
The security deal is automatically renewed every year unless one party decides to pull out. To do so, it must notify the others 90 days before its expiry – a deadline that falls on August 23.
The trade row was sparked by a recent South Korean court ruling that Japanese should compensate individual victims of wartime forced labour. Tokyo believes it settled all necessary compensation under a treaty signed in 1965, but Seoul believes that individual victims’ right to file a claim has not expired.
Relations between South Korea and Japan have deteriorated following a court ruling over forced labour in the wartime era. Photo: Shutterstock
Last week Japan said it would remove South Korea from its “white list” of countries with preferential trade status. Seoul has threatened to respond in kind, but also warned that it may reconsider whether to renew the intelligence-sharing pact.
Both the US and Japan have said they want the arrangement to continue, but Pardo said the effect of the termination would remain largely symbolic.
South Korea has already been investing in its own satellite and anti-submarine programmes to monitor the North’s activities, while Japan has also been developing its own intelligence programmes.
“This shows that neither South Korea nor Japan wants to rely on each other or third parties, namely the US, when it comes to monitoring North Korea’s military activities,” Pardo said.
But he argued that this behaviour already indicated that the alliance was weakening and suggested that terminating the treaty would increase China’s room for manoeuvre.
South Korea buys helicopters worth US$800 million after Trump seeks contribution for US presence
Since the 1990s successive US administrations have pushed for intelligence-sharing arrangements with Japan and South Korea to help build a framework to check Chinese and Russian military expansion in the Pacific.
“Beijing and Moscow are clearly moving in the direction of closer cooperation anyway. GSOMIA or not, military cooperation will continue … as long as Xi Jinping and Vladimir Putin lead each country and most probably even beyond then,” Pardo said.
China and Russia flexed their muscles in the region last month as the trade dispute between the two key allies intensified.
Russian and Chinese long-range military aircraft conducted their first-ever joint air patrol over the Sea of Japan – also known as the East Sea – and the East China Sea.
“The East Asian security landscape would be reshaped insofar that China, North Korea and Russia would see that their main opponent in the region – the US – is unable to convince its two key allies, South Korea and Japan, to cooperate on a key issue,” Pardo said.
“The current dispute between South Korea and Japan will need a negotiated solution … In any case, Japan will have to learn to live with the fact that former colonisers will, from time to time, receive criticism by many of their former colonies, criticism that sometimes will escalate.
“It happens to former European colonial powers, for example, and it is only logical because the interpretation of the past is always in flux.”
China’s Wang Yi and US’ Mike Pompeo at summit in Thailand to sell their visions of future for Southeast Asia
Analysts expect pragmatism from Asean as world’s two biggest economic powers play diplomatic game
Chinese Foreign Minister Wang Yi (right) greets his Philippine counterpart Teodoro Locsin at the Asean meeting in Bangkok, Thailand. Photo: Xinhua
China and the United States are on a mission to strengthen ties with allies and expand their influence in Southeast Asia this week as their trade war enters a second year.
US Secretary of State Mike Pompeo arrived for a meeting of the Association of Southeast Asian Nations (Asean) in Bangkok on Wednesday to promote the US-led Indo-Pacific strategy, while Chinese Foreign Minister Wang Yi touched down a day earlier to advance Beijing’s Belt and Road Initiative.
The US Department of State said Pompeo’s trip was aimed at deepening Washington’s “long-standing alliances and vibrant bilateral relations with these countries, and [to] reaffirm our commitment to Asean, which is central to our vision for the Indo-Pacific region”.
In Beijing on Wednesday, Chinese foreign ministry spokeswoman Hua Chunying said that while their meeting was yet to be set, Wang and Pompeo were expected to meet and talk “frankly” about bilateral relations.
“I think that it is indeed necessary for China and the United States to maintain communication, as the two countries face many situations,” Hua said. “The issues would be communicated frankly”.
The Indo-Pacific strategy is a military and economic framework to contain China’s expansion into the Pacific and Indian oceans, and give an alternative to Beijing’s flagship belt and road development programme.
En route to Thailand, Pompeo said that after a stalled start to US Indo-Pacific policy during the Barack Obama administration, Washington’s strategy was well on its way to bearing fruit for the US and its allies.
South China Sea tensions, US-China trade war loom over Asean summit
“We have watched these coalitions build out,” he said.
Pompeo dismissed claims that China’s sphere of influence among Asean members was growing, saying such speculation was “not factually accurate”.
“[Asean countries] are looking for partners that are going to help them build out their economies and to take good care of their people,” he said, pledging greater engagement from President Donald Trump’s administration.
Pompeo was expected to sit down on Friday with his South Korean and Japanese counterparts to consolidate their trilateral alliance in the region.
He was also expected to hold talks with Thai Foreign Minister Don Pramudwinai that day.
US Secretary of State Mike Pompeo is expected to meet Chinese Foreign Minister Wang Yi at Asean in Thailand. Photo: EPA-EFE
Meanwhile, Wang launched his belt and road pitch to his Cambodian, Philippine and Indonesian counterparts after he arrived in Thailand for the gathering, which ends on Saturday.
The belt and road projects are largely commercial and aimed at strengthening land and sea infrastructure linking Asia, Europe and Africa. But they raised suspicion in the West that they are aimed at eroding the US-led world order.
During his meeting with Philippine Foreign Affairs Secretary Teodoro Locsin, Wang said: “China is willing to have high-level exchanges with the Philippines, to deepen the mutual trust, and promote the Belt and Road Initiative [in the Philippines] … to accelerate the development of regional infrastructure.”
Can China’s trade boost with Asean help get the Regional Comprehensive Economic Partnership over the line?
This year’s Asean forum was taking place as countries were more receptive to Chinese initiatives, in part due to the unpredictability of the US administration, according to Rajeev Ranjan Charturvedy, a visiting fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore.
“Policy uncertainties under the Trump administration have already pushed some Asean countries towards China in ways that would have seemed unlikely a few years ago,” Charturvedy said.
Analysts said Trump’s “America first” approach shaped his Asean policy. The president had vowed to apply “punishments” to countries – including Asean member states – for contributing to the US trade deficit.
Chinese Foreign Minister Wang Yi is talking to Asean counterparts at a time when they are receptive to China’s proposals, an analyst says. Photo: AFP
Trump was absent at the Asean summit in Singapore last year, leading to concerns that Washington’s commitment to Asia was declining.
Charturvedy said the Asean forum’s focus was about building constructive regionalism, but China’s attitudes to security could pose a challenge.
“[However] Asean countries clearly hope not to be forced to choose between the US and Chinese offers. Rather, they would like more freedom of choice while accommodating for a larger role for China in the region,” he said.
Clarita Carlos, a professor of political science at the University of the Philippines, suggested that Asean members would be pragmatic during the forum.
Robert Lighthizer warns Vietnam over trade deficit with US
They would try to find their own balance between the two major powers – as countries rather than a bloc – to try to maximise each state’s interests and advantages, Carlos said.
“Vietnam has a love-hate relationship with China, especially as a winner in the ongoing US-China trade war,” she said. “Singapore has close relations with China. There are also ups and downs in the relationship with China for Brunei, Malaysia and Indonesia.”
Development minister leads high-level investment forum in Beijing
Points to free trade agreements and preferential duty deals to offset trade war pressures for Chinese factories
Sri Lankan Minister for Development Strategies and International Trade Malik Samarawickrama at the Sri Lanka Investment Forum in Beijing on Wednesday. Photo: Simon Song
Sri Lanka is wooing Chinese manufacturers, urging them to make use of its preferential duty-free treatment by the US and Europe as a way to offset the growing tariff pressure of the trade war.
The country’s development minister, Malik Samarawickrama, was in Beijing on Wednesday as part of an investment forum at the Sri Lankan embassy attended by dozens of Chinese businesspeople.
“China has invested heavily in infrastructure and they are assisting us to invest in ports, roads, railways, water supplies and so on. Now we would like China to get involved in setting up their manufacturing plants in Sri Lanka, primarily for the purpose of exports,” he said.
“They can make use of the preferential market access we have – we have duty free access to the European Union countries and we have free trade agreements with Pakistan, Singapore and India. And, since the cost of manufacturing in China is going up, we would like the Chinese to look at Sri Lanka for their manufacturing and we want it to be exported back to China.”
Sri Lanka, bruised from Easter bombings, seeks US$1 billion loan from China
Along with trade officials and diplomats, Samarawickrama, one of Sri Lanka’s most senior government ministers, was also keen to boost investor confidence following the deadly Easter Sunday bombings in Colombo which killed 253 people.
“Let me assure you, absolutely, Sri Lanka is safe for investment,” he told the dozens of representatives from Chinese state-owned and private companies who attended the forum.
“We must bring to your notice that none of the industries have been affected as a result of the bombings and none of the export orders were cancelled or delayed. This is a testament to the resilience of the economy.”
China is one of Sri Lanka’s largest trading partners and – sometimes controversially – the largest financier of its booming new infrastructure. Other big lenders to the island nation are the Asian Development Bank and Japan.
Earlier this year the Sri Lankan government signed a US$989.5 million loan agreement with China’s Export-Import Bank for a major new motorway project. And last month Sri Lanka’s finance ministry confirmed it was in talks with the China-led Asian Infrastructure Investment Bank (AIIB) for a further loan of nearly US$1 billion for energy and motorways.
Did Japan and India just launch a counter to China’s Belt and Road?
The surge of Chinese investment has raised concerns that Sri Lanka could become caught up in the rivalry between China and India as Beijing seeks to expand its influence in South Asia and the Indian Ocean.
Last month, Sri Lanka signed an agreement with India and Japan to jointly develop the East Container Terminal at the Port of Colombo, which some observers said could become a competitor to the China-funded Hambantota Port, and was perhaps a sign that the island nation was seeking to neutralise the growing influence of China.
Samarawickrama denied claims the involvement of Japan and India in Sri Lanka’s biggest port project was to counter China’s influence.
Under the agreement, he said, the terminal was owned by Sri Lanka Port Authority, with a 51 per cent stake, while Japan and India would develop the remaining 49 per cent.
“We need the expertise from Japan,” Samarawickrama said. “We need the Indians to get involved in the operation because 75 per cent of the transshipment cargoes in the Colombo port come from India and India is extremely important to us.
“They are the operators of the terminal and they are not building any ports.”
with punitive environmental trade regulations that should leave the waste exporting nations in delirium. Last week, the Malaysian Environment Minister, Yeo Bee Yin,
that countries should manage their own waste, and that Malaysia will take care of its own.
Modern economic theory maintains that the trade of global “goods” and services should be optimised by countries embracing their competitive advantages – letting others excel where their own advantages exist.
What it did not account for is the trade in “bads” between nations, whereby a country’s externalities (in this case waste) are sent to another’s shores to take advantage of the other country’s “competitive advantages” – low labour costs and lax environmental enforcement.
As a result of the planet’s awakening to the vast challenges of what do to with plastic in its second life, we now have two large-scale trade wars to contend with. One is between the two largest economies, the
. The other is much broader in scope, undercutting the previously perceived values of globalisation, using environmental trade barriers as a proxy for national benefit.
is not the only ill which countries share with one another, but it is one that has generated the most sharing of ideas and momentum across virtually every country on the planet.
To put the scale into context, one can conservatively estimate that at least 10 per cent of the plastic waste sent to Asia for recycling was of quality too poor to make value from.
If all of this “poor quality” material from the European Union alone was returned to its rightful exporting countries for the past 10 years of their exports, they would receive over 95,000 40-feet containers, each containing 35 metric tons of material. This would create a line of containers over 1,150km (715 miles) long.
A global reckoning on waste is under way, thanks to China
It may not be likely that all 95,000 containers will be returned to their ports of origin, but it is clear that the ability to keep moving this volume of material offshore will quickly evaporate, creating all types of disruptions and needing innovative interventions to solve the complex plastic waste challenge.
Join us, and industry leaders and influencers, at our action-based plastic circular economy forum –
In the last half of the 20th century US worries about a rising Japan led to tariffs and technology mistrust
Differences in the Chinese experience may predict a different outcome
Toshiba was one of the companies affected by US actions to prevent the rise of Japan in a trade war that echoes in today’s tensions between the US and China. Photo: Reuters
If history is a mirror to the future, the similarities between the spiralling technology stand-off between China and the US and the economic wars waged by the US with Japan – which peaked in the 1980s and 1990s – may be instructive. But there are differences between the two which may predict a different outcome.
The US-Japan economic tensions started in the 1950s over textiles, extended to synthetic fibres and steel in the 1960s, and escalated – from the 1970s to 1990s – to colour televisions, cars and semiconductors, as Japan’s adjusted industrial policy and technology development moved it up the industrial chain.
Boosted by government support, Japan’s semiconductor industry surpassed the US as the world’s largest chip supplier in the early 1980s, causing wariness and discontent in the US over national security risks and its loss of competitiveness in core technologies.
The Reagan administration regarded Japan as the biggest economic threat to the US. Washington accused Tokyo of state-sponsored industrial policies, intellectual property theft from US companies, and of dumping products on the American market.
The US punished Japanese companies for allegedly stealing US technology and illegally selling military sensitive products to the Soviet Union. It also forced Japan to sign deals to share its semiconductor technologies and increase its purchases of US semiconductor products.
“The Trump administration is using similar tactics against China that were used against Japan in the 1980s and 1990s,” said an adviser to the Chinese government, on condition of anonymity, adding that the US was continuing its hegemony to curtail China’s tech development and was trying to mobilise its allies to follow suit.
After talks to end the US-China trade faltered last month, Huawei – a global leader in the 5G market – is now standing at centre stage of a protracted technology stand-off between Beijing and Washington, which has grown increasingly wary of the rising competitiveness of Chinese tech companies.
Zhang Monan, a researcher with the Beijing-based China Centre for International Economic Exchanges, does not foresee an easing of the rivalry between the US and China.
“The current US-China conflicts are more complicated than those between the US and Japan,” she said.
“The US will only get more intense in its containment of China and the tech rivalry won’t ease, even if China and the US could reach a deal to de-escalate the trade tensions.”
Huawei is at the centre of a technology stand-off between Beijing and Washington. Photo: AP
Back in 1982, the US justice department charged senior officials at Hitachi with conspiracy to steal confidential computer information from IBM and take it back to Japan. IBM also sued Hitachi. The two companies settled the case out of court and Hitachi paid 10 billion yen (US$92.3 million) to IBM in royalties in 1983, while accepting IBM inspections of its new software products for the next five years.
Toshiba, a major electronics producer in Japan, and Norway’s Kongsberg Vaapenfabrikk secretly sold sophisticated milling machines to the Soviet Union from 1982 to 1984, helping to make its submarines quieter and harder to detect. This transfer of sensitive military technology in the middle of an arms race between the US and the Soviet Union was not revealed until 1986.
The US issued a three-year ban on Toshiba products in 1987 and the company ran full-page advertisements in more than 90 American newspapers apologising for its actions.
In 1985, the US imposed 100 per cent tariffs on Japanese semiconductors. A year later, in its five-year semiconductor deal with the US, Japan agreed to monitor its export prices, increase imports from the US, and submit to inspections by the Office of the United States Trade Representative.
A display of chips designed by Huawei for 5G base stations on show at the China International Big Data Industry Expo. Photo: AP
This was followed by a second five-year semiconductor deal in 1991, in which Japan agreed to double the US market share in Japan to 20 per cent. In yet another bilateral semiconductor deal in 1989 Japan was required to open its semiconductor patents to the US.
Meanwhile, the US government boosted its efforts to help American businesses cement their industrial leverage in the chip sector and unveiled rules to protect its domestic chip industry.
The two countries were irreconcilable in 1996 on how to measure their respective market share. Overall market circumstances had also changed by then, with the US becoming competitive in microprocessing, and South Korea and Taiwan emerging as strong rivals to Japan.
Its dominance in semiconductors lost, Japan reached out to Europe for a range of cooperative technology deals.
Cooperate, don’t confront: academic advises Beijing on trade war tactics
“History can tell that high technology matters greatly to national security strategies. It is not a process of mere market competition. It follows the law of the jungle,” Zhang said.
The US has intensified its investment scrutiny by rolling out the Foreign Investment Risk Review Modernisation Act last year, which extends the regulation to key industrial technology sectors.
Zhang predicted the US would continue to contain China’s technological development in key sectors such as AI, aerospace, robots and nanotechnology – all of which are of great importance to Beijing.
The US has said Chinese tech giants Huawei and ZTE present a national security risk. Last April it cut US supplies to ZTE, citing violations of sanctions against Iran and North Korea. The ban was removed three months later after ZTE paid US$1.4 billion in fines.
It was a wake-up call for China to develop its own core technologies. The subsequent US ban on Huawei added to the urgency to do so, observers said.
Wang Yiwei, a professor in international relations with Renmin University, said China had to develop its own hi-tech know-how while continuing the opening up process.
“China has paid a price to learn whose globalisation it is,” he said.
“We may see some extent of disengagement with the US in technology and dual-use sectors, but China can speed up cooperation with European countries, and other countries such as Israel, to offset the risks from the US.”
In December, the US filed criminal charges against Huawei and its chief financial officer Sabrina Meng Wanzhou, alleging bank fraud, obstruction of justice and technology theft.
The squeeze continued last month with the US blacklisting Huawei, restricting its access to American hi-tech supplies and putting pressure on its allies to freeze the company out of the 5G market. So far, those allies, including Germany and Japan, have remained hesitant about meeting the US request and refrained from siding with either country.
Chinese foreign ministry spokesman Geng Shuang said on Monday that Huawei had obtained 46 commercial contracts in 30 countries as of June 6, “including some US allies and some European countries that the US has been working hard to persuade out of the contracts”.
For Zhang, the differences between Japan’s experience of US concerns of technological advancement and China’s may offer some hope for Chinese ambitions.
“Dependent on US for security protection, Japan was limited in [its ability to] push back and was already a developed country,” she said.
“But China has huge domestic market potential to address the imbalance [between] economic and technology development. This remains a big attraction to multinational companies, which would enable China to integrate into global innovation and technology cooperation, but China has to figure out how to dispel the doubts on its growth model.”
China-Vietnam (Shenzhen-Haiphong) Economic and Trade Cooperation Zone is only Chinese state-owned industrial park in Vietnam
Venture has attracted increasing interest since start of US-China trade war, but operators say first duty is to support Xi Jinping’s trade initiative
A total of 16 of the 21 Chinese companies that have relocated to the China-Vietnam (Shenzhen-Haiphong) Economic and Trade Cooperation Zone did so after the start of the US-China trade war. Photo: Cissy Zhou
Until the middle of 2018, business was slow for the only Chinese state-owned industrial park in Vietnam, located in the northeastern manufacturing hub of Haiphong and wholly-owned by the Shenzhen city government.
US President Donald Trump’s tariffs on Chinese goods enacted last year changed that, with 16 of the 21 Chinese companies that have relocated to the China-Vietnam
(Shenzhen-Haiphong) Economic and Trade Cooperation Zone – many of them electronic device manufacturers – having done so since the start of the trade war.
However, profit-making was never the top priority for the park’s operators, which took over the reins from private investors after a series anti-Chinese riots raged through southern and central Vietnam in May 2014 forced the owners to abandon the project.
Protesters set fire to other industrial parks and factories and attacked Chinese workers, killing more than 20 people and injuring more than 100.
While any commercial organisation would be thrilled at the rush of manufacturing firms into Vietnam, for the park’s operators, the first duty is to showcase the Chinese government’s top international economic cooperation project, the Belt and Road Initiative.
[They] requested that we make this industrial park a showcase for the Belt and Road Initiative, so that when our top leaders pay state visits to Vietnam, they can come to our park Chen Xu
The Shenzhen arm of the State-owned Assets Control and Supervision Commission (SASAC), which oversees all city owned companies “has requested that we make this industrial park a showcase for the Belt and Road Initiative, so that when our top leaders pay state visits to Vietnam, they can come to our park”, Chen Xu, vice general manager at the Vietnam-China Economic and Trade Cooperation Park (VCEP), told the South China Morning Post.
The Chinese industrial enclave in Vietnam is part of a largely untold story of the trade war. The common narrative is that Chinese and international firms are fleeing China to avoid paying tariffs, setting up in low-cost hubs in Vietnam and elsewhere in Southeast Asia, but the picture is more nuanced than that.
In Haiphong, a part of the Chinese government is actively encouraging firms to come to Vietnam, armed with US$200 million in investment capital and with a vision of creating 30,000 jobs by the time the entire three-phase project is completed in 2022.
The then-private VCEP project was suspended after the 2014 riots, and after the local government in Vietnam said it would reclaim the land unless it resumed, the Shenzhen government “decided to fully take over the project”, according to VCEP general manager Zhang Xiaotao.
Newcomers must now buy land from the park and build their facilities themselves as the original buildings have already been rented out. Photo: Cissy Zhou
“Our evaluation then was that we could not make a profit out of this project. Then why did we still take it over? We have to serve the Belt and Road Initiative, as it is a national strategy,” Zhang added. “In fact, we surrender part of our profit [because] we sell the land [in the park] at a lower price and with better facilities than in neighbouring industrial parks. We are still in the red based upon the current land price. Our bosses understand the situation and ask us at least not to lose money.
“To make a profit is of course the priority of any company. But we are different, we are not a pure commercial project.”
Furthermore, it is a commonly held assumption that China is only open to losing low-end, labour intensive and high-polluting industry, as it looks to upgrade its manufacturing profile domestically. And while there is certainly truth to that as examples of low-value Chinese manufacturing plants litter Vietnam, VCEP is keen to avoid that persona.
Because of the need to maintain a relatively high-profile, the park does not welcome labour-intensive manufacturers such as shoes factories, because “it is bad for our image”, Chen said. Instead, it is focused on hi-tech engineering – exactly the kind of industry China is desperate to nurture on its own soil. In this sense, the Shenzhen-Haiphong facility represents something of a paradox.
With 1,500 people currently employed, it is some way from reaching its 30,000 goal, but the number of Chinese manufacturers wanting to set up factories in the park is now about eight times what it was before the trade war started last July, according to both Chen and Zhang. Newcomers must now buy land from the park and build their facilities themselves as the original buildings have already been rented out.
The relatively poor state of the surrounding infrastructure has also led VCEP to spend 30 million yuan (US$4.3 million) on a new road and bridge linking the park to the national highway in Haiphong.
“We could not wait for the Vietnamese government to build the infrastructure. They don’t have the money and their efficiency is low, so we built it ourselves,” said Li Meng, a member of VCEP’s Strategic Investment Department, who said it took less than nine months to finish the project.
The cost of the bridge was more than triple what it would have cost in China as “the efficiency is much lower here and we needed to import a lot of material from China due to lack of material in Vietnam”, Li added
“Every inch of the road and the bridge linking the national highway in Haiphong to VCEP is paved with renminbi.”
The Vietnam-China Economic and Trade Cooperation Park has a vision of creating 30,000 jobs by the time the entire three-phase project is completed in 2022. Photo: Cissy Zhou
TP-Link, the Shenzhen-based Chinese manufacturer of computer networking products, has rented a plant in the park and will start testing its equipment in July. The company, the world’s largest provider of consumer Wi-fi networking devices, has bought an additional 140,000 square metres of land in the park to expand production.
When TP-Link bought the land in late-2018, the price was between US$75 to US$80 per square metre, Chen said. Now, six months later, the price has risen to US$90 per square metre. This is indicative of the huge spike in interest in manufacturing in Vietnam caused by the trade war. Data from Vietnam’s Foreign Investment Agency shows that Vietnam attracted US$16.74 billion in foreign capital over the first five months of 2019, a year-on-year increase of 69.1 per cent. Of this, 72 per cent was invested in the processing and manufacturing sectors.
“Chinese local governments are, of course, unhappy with the increasing number of manufacturers who are relocating to Vietnam, but President Xi has clearly put forward the Belt and Road Initiative, which local governments cannot disturb. So local governments are not encouraging manufacturers to relocate, but they dare not try to stop them,” said vice-general manager Chen.
The Chinese inflow has also met with opposition in Vietnam, although far from the scale of the deadly riots of 2014.
“Some local [Vietnamese] media have been demonising China, with local prime time TV news talking about fake Chinese meat and poisoned food and hyping these cases. High-ranking Chinese officials have asked the Vietnamese government to guide public opinion in the right direction,” Chen added.
General manager Zhang added that the Vietnamese authorities have also become more sensitive to investment from China, a view reflected by Lam Thanh Ha, a senior lecturer at the Diplomatic Academy of Vietnam university which operates under the management of Vietnam’s Ministry of Foreign Affairs. “Overreliance on foreign cash in general and Chinese capital in particular may pose risks for Vietnam in terms of exchange rate fluctuations and external influences,” Ha warned.
“As production is generally dependent on transnational supply chains, foreign enterprises in Vietnam are often deeply engaged in both import and export processes, leaving the Vietnamese economy vulnerable to global economic conditions,” Ha added.
by the Post earlier in May, Ha warned that Vietnam should avoid “becoming China’s dirty industrial backyard”, although Zhang had the opposite view.
“We are not shifting all our low-end industries to Vietnam, which would be irresponsible. China is trying to help Vietnam with sincerity, even if we don’t make a profit, we still want to proceed with the project,” he said.
WASHINGTON (Reuters) – The U.S. military said it sent two Navy ships through the Taiwan Strait on Wednesday, its latest transit through the sensitive waterway, angering China at a time of tense relations between the world’s two biggest economies.
Taiwan is one of a growing number of flashpoints in the U.S.-China relationship, which also include a bitter trade war, U.S. sanctions and China’s increasingly muscular military posture in the South China Sea, where the United States also conducts freedom-of-navigation patrols.
The voyage will be viewed by self-ruled Taiwan as a sign of support from the Trump administration amid growing friction between Taipei and Beijing, which views the island as a breakaway province.
The transit was carried out by the destroyer Preble and the Navy oil tanker Walter S. Diehl, a U.S. military spokesman told Reuters.
“The ships’ transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific,” Commander Clay Doss, a spokesman for the U.S. Navy’s Seventh Fleet, said in a statement.
Doss said all interactions were safe and professional.
Chinese Foreign Ministry spokesman Lu Kang said Beijing had lodged “stern representations” with the United States.
“The Taiwan issue is the most sensitive in China-U.S. relations,” he told a daily news briefing in Beijing.
Taiwan’s Defense Ministry said the two U.S. ships had sailed north through the Taiwan Strait and that they had monitored the mission.
Taiwan President Tsai Ing-wen said there was no cause for alarm.
“Nothing abnormal happened during it, please everyone rest assured,” she wrote on her Facebook page.
U.S. warships have sailed through the Taiwan Strait at least once a month since the start of this year. The United States restarted such missions on a regular basis last July.
The United States has no formal ties with Taiwan but is bound by law to help provide the island with the means to defend itself and is its main source of arms.
The Pentagon says Washington has sold Taipei more than $15 billion in weaponry since 2010.
China has been ramping up pressure to assert its sovereignty over the island, which it considers part of “one China” and sacred Chinese territory, to be brought under Beijing’s control by force if needed.
Beijing said a recent Taiwan Strait passage by a French warship, first reported by Reuters, was illegal.
China has repeatedly sent military aircraft and ships to circle Taiwan on exercises in the past few years and worked to isolate it internationally, whittling down its few remaining diplomatic allies.
The U.S. Defense Intelligence Agency released a report earlier this year describing Taiwan as the “primary driver” for China’s military modernization, which it said had made major advances in recent years.
On Sunday, the Preble sailed near the disputed Scarborough Shoal claimed by China in the South China Sea, angering Beijing.
The state-run China Daily said in an editorial on Wednesday that China had shown “utmost restraint”.
“With tensions between the two countries already rife, there is no guarantee that the presence of U.S. warships on China’s doorstep will not spark direct confrontation between the two militaries,” it said.
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