https://www.smh.com.au/business/the...china-flexes-its-muscles-20211209-p59g4n.html OPINION A fresh trade war is brewing as China flexes its muscles Stephen Bartholomeusz Senior business columnist December 9, 2021 When Lithuania allowed Taiwan to open a representative office in Vilnius last month, using its own name instead of Taipei, you wouldn’t have to be Australian to foresee how China would respond. Lithuania has claimed that China removed it from the list of countries in its customs portal, denying Lithuanian exporters a customs clearance because they are unable to select “Lithuania” as the products’ country of origin. Products from technology, to beer, food and timber are said to have been impacted. China also recalled its ambassador, demanded Lithuania withdraw its envoy and downgraded diplomatic relations. Lithuania has also claimed Beijing has pressured third countries, urging them not to trade with the Baltic state. Last week, after high-level talks between the US and European Union centred on developing a shared approach to China, the US deputy secretary of state, Wendy Sherman, accused China of “bullying” Lithuania and Taiwan and said the US was “very worried” about the measures China had taken against Lithuania. The EU has responded by reviving a trade policy instrument that was originally designed as a response to Donald Trump’s trade sanctions on its member states. A draft of a proposed EU “anti-coercion” instrument was distributed in Europe this week. The proposed new laws would give the commission extraordinary powers to target countries that “interfere in the legitimate sovereign choices” of the EU or any of its 27 member states (which includes Lithuania) by applying or threatening to apply measures affecting trade or investment. Should the laws be approved – there are some divisions within the EU – the commission would be able to unilaterally impose tariffs, suspend access to its markets, impose quotas or licenses and limit access to government procurement programs and investment markets. It could also prevent the countries from sourcing some goods from Europe, remove intellectual property protections or impose quality filters on access to EU food markets. While the policy isn’t specifically directed at China – it could, for instance, be used as a trade weapon against the US should the Trump-era trade policies towards the EU be revived – there is little doubt that China’s increasing aggressive use of the threat of denying access to its markets as geopolitical leverage (as Australia has experienced) is the major motivation for bringing the proposed EU sanctions off the drawing boards. Within the EU some member states, like Sweden and the Czech Republic, regard the proposed measures as another distortion of free trade and would prefer the EU to use the World Trade Organisation as the forum for dealing with these kinds of disputes, despite the extraordinarily lengthy timelines and questionable effectiveness of the WTO’s processes. EU executive vice-president Valdis Dombrovskis said that the “anti-coercion instrument” would send a clear signal to the EU’s trading partners that the EU would stand firm in defending itself and wouldn’t hesitate to push back when under threat.CREDIT:GETTY There are states that regard the proposals as a breach of WTO rules – even though it is clear the global trade rules have been torn up and the WTO rendered irrelevant and powerless by Donald Trump and Xi Jinping – and others that want to protect their trade relationships with China. The largely repaired relationship on trade, indeed the larger relationship, between the EU and the US since the Biden administration displaced Trump’s trade hawks has, however, seen the EU gradually harden its attitude towards China. Almost a year ago China rushed to sign a trade pact with the EU, making last-minute concessions to try to get the deal done before Joe Biden could take office. The EU ignored Biden’s pleas to delay signing until the new administration had the opportunity to discuss the common concerns the US and EU had about China’s economic policies and practices. In March this year the EU joined the US, UK and Canada in sanctioning some Chinese individuals and entities for their treatment of the Uighurs in Xinjiang. China retaliated by imposing its own sanctions on a number of EU lawmakers and other individuals and organisations. That triggered a backlash from members of the European Parliament who were being asked to ratify the agreements even as their own members were targeted by the sanctions. That investment agreement has yet to be ratified and in the meantime the EU has expanded those Uighur-related sanctions amid a general hardening of its attitude towards China and an improved relationship with the US. EU executive vice-president Valdis Dombrovskis told a press conference on Wednesday that the “anti-coercion instrument” would send a clear signal to the EU’s trading partners that the EU would stand firm in defending itself and wouldn’t hesitate to push back when under threat. He referred to the “weaponisation” of trade for other geopolitical purposes and said the EU and its member states had been targets for economic intimidation in recent years. The new “tool,” he said, would be first and foremost a deterrent and the option of last resort, to be deployed only after attempts at negotiation or mediation and after the EU had sought co-operation from other international partners. Only if dialogue and international co-operation failed to remove the coercion would the EU apply countermeasures, he said. He also said the EU would work with other countries to address global concerns about economic coercion. Even concerted demands by the US, the EU and other like-minded countries probably wouldn’t cause Xi Jinping’s China to re-think its use of its markets as geopolitical leverage or punishment. The most obvious and blatant example of attempted economic coercion is, of course, China’s efforts to use bans on Australian products as punishment for the federal government’s commentary and actions on a range of issues – the origins of the pandemic, the Uighurs, Hong Kong, Taiwan among them – the Chinese regard as “no-go” zones. The threat of losing access to EU’s markets is, however, unlikely to cause China to back off and lift the effective sanctions it has imposed on Lithuania. Even concerted demands by the US, the EU and other like-minded countries probably wouldn’t cause Xi Jinping’s China to re-think its use of its markets as geopolitical leverage or punishment. There’d be domestic political implications in his newly-assertive China being seen to be backing down under pressure from the West along with the loss of leverage and geopolitical power.
OMG!! Lithuania has certainly stirred up the hornet's nest on this one. LOL You simply do not touch Taiwan just like you don't touch the Dalai Lama. Looks like China has learned very well how to impose sanctions now.
There needs to be a coordinated effort when it comes to China. Why isn't US letting Taiwan open an embassy? Let the Chinese exclude US from its list of export countries, let them sink their own economy.
Yeah. ,,We", kinda, p** them off. Let's hope that we don't get any of those hyper-sonic rockets any time soon and if so, so be it.
Because US's got too much invested in China. Biden, the President of United States' son's got companies in China and Biden himself has been doing business for years in China. The top three Wall Street firms, Goldman Sachs, JP Morgan, Chase and the largest multi-national bank, Citi have all decided to invest in China, that's about 80% of the wealth of USA, pretty much all of the eggs all put in one basket of China. Tesla, the largest EV decided to open a manufacturing plant in China. With so much s*** invested in China, you think USA dares to bring up Taiwan to China? All China needs to do is say "no", everything that all these companies have invested are going to be gone, like GONE!! Imagine you put 80% of all of your money into this ONE stock and that stock goes to zero, guess what happens? This is pretty much what USA has done. And Europe is no different.
I suppose the only solution is to attract more Chinese investment so that China couldn't do that to western investments.
Will be no use. The bottom line is we are civilized and what that means is that when push comes to shovel, we don't have the guts or the discipline to pull the trigger and they do cuz they don't give a s*** about human lives, let alone human rights. They have too many people and they don't give a s*** about and we don't. For us, every single life is precious. What do you do when you meet somebody less civilized than you? You run away? You do not turn around and give them all your money and hope what? They will think like you do? LOL Decoupling is the right move. The problem is just like how we are dealing with the pandemic, we don't have the discipline to even follow that through with all those companies and financial institutions investing even more in China, basically eventually giving up our ways of life and living according to theirs. I mean just from the fact that the top CEO of JP Morgan, one of the most established institutions in America had to go on its bended knees to apologize so profusely for a joke just gives you an idea of how things are going to be if China really does dominate the world one day. We already made them very rich with lots of money now we are teaching them how to allocate that money more efficiently so they can be richer. LOL
A war of attrition through consumable goods? That would be bad for both countries, because most of the stuff we buy is made in China.