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Class Editori News

The Belt and Road gains support outside Asia and Africa

August 06, 2019


Abstract : Outside of China and the United States, the Belt and Road initiative is gaining ground. Furthermore, China has reduced tariffs on competing products from other WTO countries to an average of about 6.7%. This contradicts Trump's position, who is pursuing a strong protectionist agenda.

MILAN, Aug 5 (Class Editori) – “The Belt and Road initiative is gaining ground outside Asia and Africa, and Italy is the first G7 country to join the program, along with other EU members such as Portugal and Greece. Furthermore, China has reduced tariffs on competing products from other Wto countries to an average of about 6.7%,” affirmed Gary Greenberg, Head of Emerging Markets of Hermes Investment Management. “This contradicts the position of the president of the United StatesDonald Trump, who is pursuing a strong protectionist agenda,” added the expert.

Greenberg further explained that the commercial policy may have been a tool used to hit Huawei, but the moves of the White House were not part of the trade war against China. The motivations are due to reasons of national security and to the entrenched distrust of Chinese technology companies to block their development in critical sectors such as 5G. A symptom also of the growing rivalry of the USA towards China, ever more powerful and influential.

“The skepticism that the temporary ban was somehow due to the growing dynamism of the United States in trade negotiations stems from the fact that Washington already has a great deal of weight through tariffs. The motivation at the time of the ban seemed to be the distrust of many in the US government that have long framed Huawei as a security concern due to its alleged close ties with the People's Liberation Army and the Chinese secret services,” continues the analysis.

However, after the meeting of Trump with the Chinese President Xi Jinping during the G20 in Osaka, it seemed as the US trade interests for Huawei could still turn the situation upside down. Trump announced his intention to allow US tech companies to export less sensitive good and that the Huawei issue would remain open until the end of the trade negotiations. As of today, Huawei technologies are still banned on the US networks.

“Seeing Huawei as a strategic threat, US have been able to limit its ambitions abroad and to stop network installations in allied or friends countries. Even if the ban in the US would be partial, it is total in Australia, New Zealand, Japan and Taiwan. In Europe – where Huawei already supply one third of the telecommunication systems – the UK proposed to ban the company as essential components supplier for its new 5G network, and other countries, such as Germany and France, are enhancing their safety standards”.

Even though Huawei is experiencing this brake, the goals of Xi in the “new long walk” toward the technological self-sufficiency are always crystal clear. At the beginning of the month, Beijing presents its 5G standards, sending the clear message that China is ready to further boost the 5G coverage. At the same time, national development funds are collecting huge resources to develop semiconductors, as never seen after the last IT bubble.

Although the Trump administration had soften the restrictions on Huawei, it is unlikely that Huawei or China will stop its commitment to establish an alternative distribution channel, and it possible that during the coming years the Chinese design will replace the US suppliers. To conclude, Gary Greenberg explained that “it is unlikely that China will let its vulnerabilities open, given that we are far from a permanent solution on the trade issue and that the strategic competition is always in the front line. This is obvious also for what concerns the vision which China has of its own military apparatus”.

(Source:Class Editori)

Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.


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Keyword: B&R Asia Africa

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