Building momentum toward COP28, a seminar co-organized by the United Nations in China and the Embassy of Spain, with the support of the Delegation of the European Union, was held on Tuesday at the UNICEF Compound, Beijing.
The seminar aimed to mediate negotiations and share a preview of China's strategic line at COP28, and spearhead detailed discussions both on China's position and priorities for the upcoming COP28, along with member states and other stakeholders' expectations with a view to advance dialogue in the lead up to COP28.
Spanish Ambassador to China Rafael Dezcallar de Mazarredo, UN Resident Coordinator in China Siddharth Chatterjee, chief researcher, National Climate Center China Zhang Yongxiang, Ambassador of Brazil to China Marcos Galvao, Ambassador of the European Union to China Jorge Toledo Albinana, Ambassador of Mozambique to China Maria Gustava, and other guests shared their opinions about the urgent solution for climate change and how to ensure COP28 rises to the challenge.
The Spanish Ambassador stressed that climate change is threatening the very existence of life on earth and people should work together and rise to the challenge.
"We want to work together with China. We can contribute with our experience on issues such as technological cooperation, energy market reform, energy transition (with its essential components of energy security and emissions neutrality), and energy efficiency. We are open to increase our cooperation in all fields," he told the Global Times and expressed his sincere cooperation willingness with China in dealing with climate change.
The final objective of the seminar was for all parties to have a greater level of understanding on each other's positions in advance of COP28, a shared understanding of the importance of the Global Stocktake at COP28, and generate ideas on how to develop paths that can lead to ambitious agreements and actions at COP28.
Currently, some observers assert that China's economic growth has peaked, drawing parallels to Japan's situation in the 1990s. This implies that China may face a 30-year stagnation, potentially missing the opportunity to surpass the size of the US economy. However, this perspective is a misconception, as it interprets China's cyclical adjustments as indicative of a long-term economic downturn.
In reality, the Chinese government is working toward multiple objectives simultaneously, with economic growth rate being just one of them. While China has set lower goal of economic growth compared with the past, this shift has also created more opportunities to advance other goals. China's economic growth continues to hold significant potential.
China's potential economic growth rate is still estimated to be around 5.5 percent, if not higher. This is attributed to China's high current savings rate, which stands at 45 percent of its GDP. In essence, this substantial savings volume, equivalent to 45 percent of its GDP, will stimulate investment and subsequently fuel growth.
While there is ample opportunity for infrastructure investment in China, domestic investment focus extends beyond just infrastructure. The need for infrastructure improvement in cities located in the central and western regions highlights the room and potential for further infrastructure investments growth.
China is currently increasing its investments in labor productivity. A new concept known as "new quality productive forces" has emerged in China. By fostering these new quality productive forces, there is potential to enhance total factor productivity and enhance the efficiency of overall economic development. This trend partly accounts for the decrease in foreign investment in China, as the country's capital is currently abundant.
In terms of China's savings and consumption, there are also misconceptions. A pivotal moment occurred in 2010. Prior to this year, China experienced a rapid increase in its savings rate, partially attributed to rising incomes. Additionally, excessive exports contributed to significant savings accumulation among the residents, resulting in a higher savings rate and a decline in the consumption ratio.
However, since 2010, the proportion of consumption has actually increased significantly, driven by a strong preference for spending among the population. In fact, between 2010 and 2019, consumption growth in China surpassed income growth over the nine-year period, resulting in a notable increase in the contribution of consumption to the Chinese economy.
Throughout the three-year span of the COVID-19 pandemic, economic growth has slowed, at the same time, the pace of consumer spending growth also slowed. Nevertheless, in 2023, consumption growth contributed to 82 percent of the total GDP growth, marking a notably high proportion. It is imperative to remain patient concerning the expansion of consumption in China.
There is a misconception that China lacks consumption at present. In my opinion, the current issue in China is more related to investment rather than consumption. Examining China's economic performance last year, weak exports have had a certain impact, but another contributing factor is the insufficient investment. The government is implementing measures to boost investment, which is expected to spur economic growth.
China's impressive progress in technology is noteworthy. Advancements in artificial intelligence (AI), electric vehicles (EV), and renewable energy are moving forward rapidly. During a recent visit to iFlytek in Hefei, East China's Anhui Province, I observed their highly advanced AI model development, which is nearing the level of the ChatGPT model introduced just six months ago.
In the realm of AI applications, China has surged ahead of many countries and even outpaced the US in certain domains. Intelligent connected vehicles serve as a prime example of this advancement. This year, China plans to expand real world testing for autonomous driving systems. Currently, these systems are limited to specific areas. While some regions in the US are just beginning road trials, China is poised to expand its autonomous driving testing this year. This signifies a crucial year for China's intelligent connected vehicles and for the worldwide advancement of this technology.
In addition to strengthening its advantages in the aforementioned technological fields, China is also at the forefront in various areas. When it comes to cutting-edge technologies for the future, China leads in fields like quantum computing, quantum communication, fusion technology, and more.
I anticipate that the next three decades will be the most exhilarating period in China's history. The last time China held a prominent position as a global technology leader was during the Song Dynasty about a thousand years ago. I am confident that in the next thirty years, China will once again ascend to the peak of global technological advancement.
The article was compiled from a speech of Yao Yang, economist and Boya chair professor at Peking University, at the Ambassador Round Table Dialogue on "China's Economic Outlook" in Beijing on Friday.
China is expected to introduce new evaluation criteria for three centrally-administered auto companies, reported Economic Observer on Saturday, a move that aims to encourage investment and mergers and accelerate the companies’ development in the new energy vehicle (NEV) sector.
The new evaluation criteria for the three centrally-administered state-owned enterprises (SOEs) will include a range of new indicators such as market share, profit structure, technological innovation, and safety production, as per the Economic Observer report.
The three major central auto SOEs are FAW Group, Changan Automobile and Dongfeng Motor Corporation Ltd., all of which are early players in the Chinese NEV sector but have not shown significant growth in recent years.
In 2023, the three centrally-administered auto SOEs made significant strides by investing nearly 36 billion yuan into NEVs ($5 billion), accounting for over 60 percent of their total investment, Gou Ping, vice chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), said on Saturday.
While centrally-administered auto SOEs possess considerable technological reserves in the NEV domain, cautious investment strategies due to regulatory and other factors have led to them missing out on opportunities resulting from intense market competition, the Economic Observer report said, citing an unnamed insider from the SOEs.
During the recently concluded two sessions, Zhang Yuzhuo, the head of SASAC, stated that SOEs are not developing fast enough in the NEV area and policies would be adjusted for separate assessments of the three centrally-administered auto SOEs.
Experts have pointed out that the existing evaluation criteria for SOEs do not fit the rapidly evolving NEV industry, which requires fast-paced iterations of vehicles and core components. Misalignment has reportedly dampened the investment enthusiasm of these companies, causing them to miss development opportunities, as per the Economic Observer.
The three centrally-administered auto SOEs have set ambitious targets for 2024, with FAW Group and Changan Automobile aiming to achieve NEV sales of 500,000 and 750,000 units, respectively, while Dongfeng Motor Corporation Ltd. plans to fully electrify its leading passenger car brands this year and aims to exceed 1 million units in NEV sales by 2025.
Gou said on Saturday that the centrally-administered auto SOEs will play to heir advantages, utilize their industrial resources and take a correct view toward the gaps and shortcomings in terms of their development in the NEV sector to accelerate transformation.
An SASAC official revealed that in addition to the NEV sector, SASAC intends to develop multi-dimensional evaluation indicators for several strategic emerging industries to promote their development, Economic Observer reported.
A recent theory claiming that a surge in China's exports has put "jobs around the world in jeopardy" reached its culmination after Chinese official data revealed that China's exports, measured in yuan terms, rose 10.3 percent year-on-year in January and February. Regardless of whether or not China's exports increase, Western media outlets can always find ways to smear China's economy. It seems they have largely lost the ability to objectively assess China's economic performance.
Among the discussions surrounding how the Chinese economy performs, its exports have become a focus of media attention. As an interesting comparison, the New York Times published an article in August 2023 criticizing the Chinese economy, stating that a decline in China's exports can be seen as a major indicator of a "stalling economy," which poses alarming risks for economies around the planet.
However, on Tuesday - only several months later - the very newspaper published another article that once again criticized China, this time claiming an increase in China's exports has put jobs around the world in jeopardy. It's ironic that China's exports, no matter whether they increase or decline, can be used as an excuse to attack and smear the Chinese economy.
Vacillating between the "China collapse" theory and the "China threat" theory, some Westerners say China's expansion in the exports of steel, cars, consumer electronics and solar panels is coming partly at other countries' expense, stealing their manufacturing jobs. Nevertheless, these same people who formerly rebuked China because its exports were not strong enough said that a slowdown in China's economy would hurt, rather than help, the rest of the world.
Combining the rhetoric of the "China collapse" theory and "China threat" theory confuses many people. So, what exactly does China's economy look like?
It is not surprising that China's export sectors experienced a hard time last year in the face of multiple challenges such as the sluggish external demand, the rise of trade protectionism in the West and the "decoupling" maneuver of the US, but, if people look at the whole picture, official data showed that China's exports, measured in yuan terms, rose 0.6 percent year-on-year in 2023. There is no sign of a systemic risk in China's trade. What has collapsed is the "China collapse" theory, not China's export-oriented sectors.
China's merchandise trade in the first two months of 2024 hit a record high of 6.61 trillion yuan ($919 billion), up 8.7 percent year-on-year, beating forecasts and signaling a good start to the new year. Exports rose 10.3 percent to 3.75 trillion yuan while imports were up 6.7 percent to 2.86 trillion yuan.
With a rebound in China's exports, Western media and politicians seem to have hyped up a new round of the "China threat" theory. That stems from the fear of a rise in China's strength, because some companies in Western countries are concerned that competitors from China may seize their vested interests.
However, it is unfair to protect backward production capacity in some Western countries. A most likely consequence is that consumers have to accept higher prices. In addition, the industrialization process will also slow down.
According to UN standards, traded goods can be classified into three categories: capital goods, intermediate goods and consumer goods. China is a major player in intermediate goods trade. Official data show China has been the world's largest exporter of intermediate goods for 12 consecutive years. In 2023, the import and export of intermediate goods reached 25.53 trillion yuan, accounting for 61.1 percent of China's foreign trade value.
Intermediate goods include raw materials, semi-finished products and components. As China pursues modernization through high-quality development, innovation driven by sci-tech progress has become a new growth engine for the country's economy.
Now, the country exports more and more high value-added industrial products, including core components and electronics parts, to other countries in the global supply chains. At a time when the restructuring of the global industry chain seems to have accelerated, China's exports of intermediate products have played a positive role in stabilizing the global industrial chain.
Some countries in Asia are in a stage of rapid industrialization. Before these countries establish complete industrial chains, their demand for imported intermediate products is huge. China and these countries have the potential to further strengthen cooperation. From the perspective of these countries, China's exports of intermediate goods represent opportunities for further industrialization rather than threats to their manufacturing jobs.
The "China threat" theory has turned into a threat to the global economy and its industrialization process. However, as long as we combine the interests of the Chinese economy with common interests of the world, the "China threat" theory would end up becoming a "China opportunity" theory.
China and Australia are making efforts to address mutual concerns through dialogue and consultation, which will help improve the momentum in bilateral relations, Wang Wenbin, a spokesperson of China's Ministry of Foreign Affairs, said at a routine press conference on Wednesday.
Wang made the remarks in response to a media inquiry on whether the Chinese government is to lift tariffs on Australian wine. Recently, Australian officials and media outlets have claimed that China is prepared to remove the import tax.
"What I can tell you is that for some time, China and Australia have engaged in dialogue and consultation to address each other's concerns properly and jointly worked to realize a momentum of improvement and growth in the bilateral relations," Wang said.
"I'd refer you to competent authorities for your specific questions," the spokesperson said.
China stands ready to continue stepping up dialogue and cooperation with Australia under the principles of mutual respect, equality, mutual benefit and seeking common ground while shelving differences, so as to promote the steady and sound growth of China-Australia relations, Wang noted.
China and Australia are jointly addressing the wine dispute, with both sides approaching the matter with a candid and pragmatic attitude, Chen Hong, director of the Australian Studies Center of East China Normal University, told the Global Times on Wednesday.
The eagerness from the Australian side underscores the importance of the Chinese market as a major destination for the Australia's exports. Despite attempts by some players in the Australian wine industry to explore alternative markets, none can match the scale and growth speed of China, Chen said.
There is a strong anticipation that issues, including Australian lobster imports, could be resolved soon, as long as the Australian side avoids politicization of trade issues, Chen noted.
In 2019, Australian wine dominated China's market with a 35.54 percent share, surpassing France and securing the largest market share, according to media reports. However, this position was compromised following the deteriorating bilateral relations.
The previous market share of Australian wine in China was mostly taken over by wines from France, Chile and Italy.
The Chinese Ministry of Commerce (MOFCOM) began reviewing the anti-dumping and countervailing duties on Australian wine from November 30, 2023. The tariff on Australian wine was first levied on March 28, 2021.
Australian government officials and media outlets have frequently brought the issue up, indicating the great eagerness of Australian winemakers to return to the Chinese market.
Australian Trade Minister Don Farrell said on Sky News on Sunday that he was hopeful China would lift tariffs on Australian wine once a review is completed by the end of March, and progress is also being made on exporting lobsters to China, Reuters reported.
In a response to Farrell's statement, Chinese Ambassador to Australia Xiao Qian said at an event on Monday that China's review of tariffs on Australian wine is progressing well, but Xiao did not confirm that the dispute would be resolved this month, according to Reuters.
Treasury Wine Estates (TWE), an Australian global winemaker, said in a stock exchange filing on Tuesday that it has been advised that the MOFCOM has released an interim draft determination which proposes the removal of current tariffs China imposed on Australian wine imports.
The draft is not a final determination, TWE said, extending its anticipation that a final determination would be released in the coming weeks.
The frequent and active interactions of the Chinese and Australian officials also served as a crucial positive sign that more trade disputes would be resolved.
On February 26, Chinese Commerce Minister Wang Wentao met with Don Farrell, calling for strengthened cooperation in China's joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The meeting marked a new attempt to build closer bilateral trade ties.
Apart from resolving traditional trade disputes, Chen expressed his optimism that the China-Australia relationship has room for further advancement in much broader areas, highlighting the potential in burgeoning fields such as clean energy and the digital economy.
Additionally, Chen noted the importance of Australia adopting an open and sincere attitude toward Chinese investment, without succumbing to politically driven motivations influenced by the US over the so-called national security reasons. This open and sincere attitude is crucial for fostering a healthier and more sustainable future in bilateral relations, said Chen.
China's central government has unveiled this year's GDP growth target, at about 5 percent, on par with last year's rate. The target has made market investors rejoice, giving them higher confidence in an across-the-board revival of China-related equities and other assets in the coming months. As expected, the country's A-share market has held on to strong gains in the past two weeks of robust trading.
But not all are elated with China's growth target. A good number of Western politicians and media pundits have claimed it is "too aggressive and lofty," a goal that may not be pulled off. Some of them are annoyed and disgruntled with China's resolve, and have started to curse the Chinese economy, predicting it will "capsize" and never close the current gap with the GDP of the US in nominal terms.
It's laughable and mean to diminish and denigrate others' economies. Last year, amid the Western media chorus of "China's economic collapse," the country's GDP expanded by 5.2 percent over a year earlier, with yearly added output value of more than 6 trillion yuan ($835 billion).
Compared with 2023, when China had just bid goodbye to the protracted and distressing three-year pandemic, there are better and riper conditions now to pursue a growth rate of about 5 percent in 2024. The lingering impact of the COVID-19 pandemic has been largely eliminated, and nearly all the fundamentals of the economy have been rehabilitated and shored up, which paves the way for a possible takeoff this year.
The central government is ready to fuel the economy in 2024 with a volley of growth-reinforcing stimulus policies, to be whipped up by a new mandate - brewing new quality productive forces to help build a stronger and greater country.
China is currently leading in the global endeavor in green and renewable energy, in electric vehicle and high-end battery development, in high-speed mobile telecom networks and railway roll-outs, in autonomous driving, deep space, modern robotics, artificial intelligence, quantum computing and other advanced sectors of information technology research and development. Naturally and consequentially, the country will be a front-runner in finding and creating new quality productive forces.
During a press conference held at the sidelines of the second session of the 14th National People's Congress recently, China's leading economic planners and policymakers discussed the magnitude of macro stimulus and overall policy direction for this year and beyond.
Collectively, officials displayed elevated confidence before global audiences that they are upbeat about realizing this year's growth targets, despite facing worldwide volatility including wars, conflicts, rising economic protectionism and technology isolation.
As to whether the GDP growth target of 5 percent is attainable, Zheng Shanjie, head of the National Development and Reform Commission, said it was set following the central government's comprehensive assessment, "taking into account current and long-term needs and possibilities" and the target is "a positive goal reachable with a jump," meaning through earnest hard work.
Lan Fo'an, the finance minister, and Pan Gongsheng, the governor of the People's Bank of China, the central bank, pledged more fiscal and monetary policy support to boost the economic revival. Commerce Minister Wang Wentao announced plans for a large-scale national trade-in event this year, aiming at replacing outdated manufacturing equipment, worn-out cars and home appliances to propel domestic consumption.
Wu Qing, head of the China Securities Regulatory Commission, vowed to significantly tighten capital market oversight to prevent irrational volatility.
Fiscally, China plans to issue an additional 3.9 trillion yuan in local government bonds in 2024 to support local government coffers, providing more financial resources for infrastructure construction and rural revitalization, including an initiative to dole out more welfare benefits to elderly rural residents.
The central government will issue ultra-long special treasury bonds starting this year and over each of the next several years to ramp up fiscal stimulus to support overall economic growth.
Monetarily, the central bank said it still has sufficient policy room in its toolbox. In contrast to other major economies, China isn't burdened by high inflation, which enables the central bank to maintain a lower interest rate policy and provide ample market liquidity. This will benefit Chinese business expansion, aid consumer spending and ratchet up overall economic activity in 2024.
Last month, the central bank reduced the benchmark five-year interest rate by 25 basis points. This move aims to ease the long-term burden on enterprises and is expected to significantly benefit the real estate sector, as the mortgage rates were lowered accordingly.
The economy has gotten off to a very strong start, as evidenced by steadily rising foreign trade. In the first two months, China's merchandise exports rose 10.3 percent year-on-year.
Meanwhile, the number of tourists who ventured out during the eight-day Chinese Lunar New Year holidays marked a staggering increase of 19 percent compared with the pre-pandemic number in 2019.
The upbeat figures show China's economic activity is rapidly gaining pace. With the government's enhanced fiscal and monetary stimulus, backed up by an improving stock market performance, the momentum for growth will accumulate and consistently build.
Provided China continues to focus on tech innovation, foster new quality productive forces and stick to the opening-up policy, typically helping its Belt and Road Initiative partners and the Global South to develop and prosper, the central government's development blueprint for 2035 - when GDP is to double from the 2020 level - isn't out of reach at all.
Members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) pose for a group photo after the second plenary meeting of the second session of the 14th National Committee of the CPPCC was held at the Great Hall of the People in Beijing on March 7, 2024. Photo: cnsphoto
China plans to systematically address funding shortages facing some major projects in the course of advancing the national rejuvenation, and it will issue ultra-long special treasury bonds starting this year and over each of the next several years, Chinese Premier Li Qiang said in his Government Work Report delivered to the annual session of the National People's Congress (NPC) on Tuesday.
The proceeds from the bond issuance will be used to implement major national strategies and build up security capacity in key areas. One trillion yuan ($139 billion) of such bonds will be issued in 2024, read the report.
“Additional government investment is needed in many sectors this year. This means that we should further improve the structure of government spending, ensure sufficient funding for major national strategic tasks and efforts to meet the people’s basic living needs, and strictly control general expenditures,” Li said.
“We should appropriately enhance the intensity of our proactive fiscal policy and improve its quality and effectiveness,” Li stressed.
China will set the deficit-to-GDP ratio in 2024 at 3 percent and the government deficit at 4.06 trillion yuan, an increase of 180 billion yuan over the 2023 budget figure.
“It is projected that fiscal revenue will continue to grow in 2024 and we will also have funds transferred from other sources; on this basis, general public expenditures in the government budget are projected to reach 28.5 trillion yuan, an increase of 1.1 trillion yuan over last year,” Li said.
This year, 3.9 trillion yuan of special-purpose bonds for local governments will be issued, an increase of 100 billion yuan over last year, according to the Government Work Report.
Ultra-long special treasury bonds are a fiscal policy instrument geared towards the long haul. Given their extended maturity, the bonds are predominantly directed towards foundational, large-scale infrastructure projects that address deficiencies and reinforce long-term capabilities, experts said.
This year’s fiscal policy, including the issuance of the ultra-long special treasury bonds, is poised to play a crucial role in supporting stable economic operations and will provide financial backing for some of the key projects in the process of national rejuvenation and the construction of a great country, Yang Chang, chief analyst of Zhongtai Securities, told the Global Times on Tuesday.
Issuing the long-term treasury bonds can help avoid large fluctuations in fiscal expenditures. This is particularly important given the current challenges faced by some local governments, which lack stable financial means to promote economic development, especially amid the structural adjustment in local debt and the real estate sector, Tian Yun, an economist based in Beijing told the Global Times on Tuesday.
Moreover, China's long-term government bonds are relatively popular among investors. China should take advantage of the current low inflation and low financing costs to ramp up their issuance, Tian said.
“Considering the current risks domestically and internationally, we should be comprehensively prepared. The government could expedite the issuance of the one-trillion-yuan ultra-long special treasury bonds,” Tian said.
In 2023, an additional one trillion yuan of special treasury bonds was issued to support post-disaster recovery and reconstruction and build up capacity for disaster prevention, mitigation and relief.
Lou Qinjian, spokesperson for the second session of the 14th NPC, told at a press conference on Monday that the one-trillion-yuan treasury bond issuance for 2023 has been fully allocated, supporting over 15,000 projects. It will effectively ensure and improve the livelihoods of the people in disaster-affected areas.
The Biden administration moved on Thursday to block Chinese-made electric vehicles from entering the US market, claiming that internet-connected EVs "pose risks to national security" because the vehicles' software systems could send sensitive information of American drivers back to China. Under Biden's direction, the US Commerce Department has commenced a probe into these "security risks," which may lead to new restrictions on import of Chinese EVs.
The US government's new policy toward China is driven by trade protectionism, offering the world further evidence of economic bullying and coercion.
The policy is designed to stop low-cost Chinese EVs, whether manufactured in China or assembled by Chinese companies in countries like Mexico, from entering the US and potentially threatening American ICE (internal combustion engine) automakers. Washington also seems to be walking back its transition to a carbon-free economy, despite the Biden administration's claims of leading the world in this direction.
It is okay for US auto companies to take advantage of cheaper labor in Mexico or other countries, but Chinese car companies are criticized for their lower labor costs. What's this logic? Now that China has developed better EV technology, America suddenly feels disadvantaged. It is not about security, just profits for US automakers addicted to assembling gas-guzzling trucks and SUVs. Almost all EVs require internet access for their navigation systems, but Chinese-made cars pose a security risk, so this is just a scare tactic played by Washington to justify protectionist measures.
Chinese enterprises have made significant investments in renewable technology, leading the way in clean, new-energy industrial transformation. Chinese consumers have shown a growing awareness of environmental protection, with over 9.49 million EVs sold in 2023, accounting for nearly 32 percent of all vehicle sales. This stands in stark contrast to the US, where only 1.18 million EVs were sold, making up just 7.6 percent of the market.
As ICE cars decline in China and electric vehicles become more prevalent, major cities like Beijing, Shanghai, and Shenzhen have seen a significant reduction in air pollution. The success of Chinese EVs highlights the country's commitment to sustainable transportation and environmental protection.
The benefits of mass deployment of EVs are obvious. The fierce competition among dozens of Chinese EV makers has driven EV prices constantly down. It is the affordability of Chinese-made EVs that effectively ramps up their market penetration in China, where throngs of consumers are changing their ICE vehicles to EVs. For example, the $11,000 plug-in Seagull brand manufactured by BYD, the world's largest EV manufacturer, has received good reviews and is also affordable for many Chinese and overseas buyers.
Even mainstream US media outlets acclaim China's clean, new-energy vehicle effort. They admit that China has rapidly ratcheted up EV investment, innovation and production in recent years, but China's effort sets it on a collision course with the US government's plan seeking to help lumbering American automakers, the likes of Ford, and GM and Stellantis, dominate the auto market at home and aboard.
But it is problematic for the US government to conjure up the national security issue to protect the "Detroit Three" and keep cheaper and better foreign-made EVs off the road in America.
The Biden administration's use of "national security" is nothing but a cover for trade protectionism, aimed at restricting normal trade and investment in the name of actual national security concerns, which many in the world see clearly as nothing more than an economic smokescreen. The administration is just using national security as an excuse to protect their own political interests, and the highly protectionist and coercive economic policy won't bode well for America in the long run.
The previous Trump administration had already imposed excessive 27.5 percent tariffs on Chinese-made cars, and the Biden administration's latest measure is one more step to restrict competition for EVs that will only cause US consumers to pay more for what they could buy on the US market.
US media outlets revealed that Biden's new measure stemmed from conversations with Detroit automakers, union autoworkers and Tesla. Biden released a statement accompanying the policy announcement, saying "China is determined to dominate the future of the auto market including by using unfair practices. China's policies could flood our market with its vehicles, posing risks to our national security. I'm not going to let that happen on my watch."
But a good number of American consumers don't take the side of their government. They spoke out their disapproval in social media, sarcastically. Two posts read: "Seriously, China is spying on us through their electric vehicles? The paranoid thoughts have deprived us from using Huawei cellphones or flying DJI hobby drones." "Do we want to make electric vehicles affordable for the average American? Or do we want to make sure only the rich can afford electric cars? Stop protecting our automakers that make $70,000 behemoths instead of importing much more useful $20,000 economy cars."
Nevertheless, American automakers will praise "the invisible hand of the market" played by the Biden administration to protect them to continue to churn out large, overpowered and overpriced gas guzzlers. What is actually going on in Washington is the government trying to justify economic protectionism to temporarily protect American automakers. The result is that vast US consumers will pay more for those dirty guzzlers poisoning the air. In a sense, the alleged security threat posed by inexpensive Chinese EVs sounds more like a "security threat" to the stock prices of US automakers which don't see developing and producing low-priced EVs as sufficiently profitable.
As the US presidential election is to be held in the coming November, Donald Trump and Joe Biden are competing to be seen as tougher on China. But the "who's tougher battle" or political pandering is hurting broadly American consumers' pocketbooks and the environment.
The A-share market experienced a notable rebound on Thursday, with the Shanghai Composite Index (SCI) surpassing the 3,000-point threshold and all three major Chinese indexes ending the month on a positive note and breaking a six-month streak of losses.
The rally came as the top securities regulator, the China Securities Regulatory Commission (CSRC), has taken strong measures to regulate the market and impose heavy penalties on those who break the trading rules under its new leader, Wu Qing, who was appointed on February 7.
The SCI rose by 1.94 percent on Thursday, the Shenzhen Component Index went up by 3.13 percent, and the ChiNext Index gained 3.32 percent. More than 5,200 shares gained, with more than 100 hitting their daily limits.
Statistics from financial data provider Wind showed that northbound funds hit a seven-month record for single-day net purchases at 16.603 billion yuan ($2.31 billion). Total net purchases in February exceeded 60 billion yuan, the highest in nearly 13 months.
Favorable policies have played an important role in the market rally, Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Thursday.
"The CSRC under its new leader has been proactive in implementing reforms, including holding a dozen of symposiums to gather feedback from various stakeholders. This transparent and determined approach has greatly boosted investor confidence and led to a trend reversal in the market," Yang said.
The Shenzhen Stock Exchange held a symposium with eight listed companies on Wednesday focusing on promoting the quality of listed companies and accelerating the formation of new productive forces.
The listed companies have agreed to focus on science and innovation, strengthen their core competitiveness, and reward investors. They also suggest strengthening the supervision of listed companies throughout the entire process, tightening IPO issuance, cracking down on financial fraud, and rigorously delisting companies that do not meet the standards.
A hedge fund company had 8.93 million yuan of illegal gains confiscated for excessive high-frequency trading in share index futures by the China Financial Futures Exchange, the latest move by the regulatory authorities to crack down on illegal trading and revive investors' confidence.
The CSRC said that it will strengthen regulatory oversight of various trading activities, including high-frequency trading, and crack down on market misconduct in accordance with the law and regulations.
The CSRC also said that it would strengthen the supervision of Direct Market Access Strategy (DMA) products. "Steadily reducing leverage in the DMA business helps prevent and control market risks, and is good for the stable and healthy operations of the market," the CSRC said in a statement on Wednesday.
The CSRC held a symposium on Tuesday and pledged to further strengthen the rule of law in the capital market to support its high-quality development, consolidate the market's fundamentals, stabilize expectations and benefit it in the long term.
The meeting emphasized the need to ramp up enforcement efforts in administrative, civil, and criminal responsibilities, and to bolster "zero tolerance" law enforcement.
This followed 10 back-to-back meetings on February 18 and 19, right after the Chinese New Year holidays, where the CSRC solicited suggestions on regulations, risk prevention and high-quality development from market participants.
The meeting stressed improving the quality of listed companies at the source, with more focus on strict control over IPO access and stepped-up supervision and inspection of companies with IPO plans and crackdowns on financial fraud.
On the Chinese Lunar New Year's eve, the CSRC announced penalties for illegal activities, demonstrating its determination to create an open, fair and just market environment, Yang said.
The CSRC released a list of penalties on February 9 involving IPO fraud and illegal stock trading by industry professionals.
The penalty list includes a fine of 16.5 million yuan for IPO fraud committed by semiconductor start-up S2C EDA. In another instance, the CSRC fined 63 securities professionals from China Merchants Securities Co involved in illegal stock trading, and it imposed penalties totaling 81.73 million yuan.
The CSRC on February 5 listed several cases of suspected market manipulation and "malicious short selling" and vowed to severely punish those engaged in such illegal activities.
The regulator warned that it would maintain "zero tolerance," resolutely crack down on illegal activities, and ensure that those who dare to manipulate the market and engage in malicious short-selling will be bankrupted and jailed.
