Signs not good for US-Iran nuke deal badly needed for stability – Asia Times

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Older Egyptian and American officials will join forces for the next week in a row to discuss the Persian nuclear programme. The most recent round of conversations has begun in Oman on April 12; the first round was held there on April 12.

However, recent claims from senior Iranian officers, including those that differ on the location of the talks, suggest that quick political victories might not be possible.

Donald Trump’s attitude toward Iran has been understandably hostile. The Trump administration for the first time withdrew from the 2015 atomic agreement and put the plan of “maximum force” on Iran. Trump has reintroduced this scheme of greatest force since his return to the Oval Office.

Steve Witkoff, the US special envoy to the Middle East, stated in a post on X that” Iran may quit and remove its nuclear advancement and weaponization program.” Additionally, he demanded that any weapons that were stored in the Islamic Republic be checked.

Iranian officials and Abbas Araghchi, the foreign secretary, have vehemently rejected these US requirements, with Iran’s officials claiming that the missile system is not up for discussion.

Tehran wants a settlement.

Iran is undoubtedly looking for a bargain, or perhaps needs one. Restrictions that have severely damaged the government’s middle school over the past ten years have hit it hard.

Israel’s military actions against Iran and its supporters over the past year have eroded the Islamic Republic’s intellectual and military strength and the wider” plane of weight.” Iran’s weapons have even greater significance as a deterrent as the strengthening of many of its friends.

The Trump administration’s powerful position leaves little room for manoeuvre. It raises the possibility of more enticing hardline groups in Iran, who may be less inclined to speak out politely. However, any hostile language from Iranian voices could add more to an already obscene situation.

The Islamic Republic also experiences a number of severe domestic stresses, including those portrayed in the Woman, Life, Freedom activity. The self-declared Crown Prince Reza Pahlavi, the Shah’s child, who was ousted in 1979, is also facing an increasingly vocal criticism from overseas.

Iran may need a deal, but it cannot give up, especially given the recent events. Nor ought it.

US evaluates its plan

Hawks in the US, Israel, and other countries have, of course, applauded the Trump administration’s position. Israeli Prime Minister Benjamin Netanyahu’s steps are still influenced by worries about an Iranian nuclear programme, despite recent reports that Trump vetoed Jewish strikes on Iranian targets in favor of further negotiations.

The situation is different now than it was when the Gulf state would have celebrated a hard stance on Iran. Saudi Arabia, Iran’s long-standing adversary, has put a stop to decades of enmity in the hope of a more prosperous future together.

Saudi Arabia and Iran agreed to restore relationships, reopen offices, and engage in a number of planned military exercises under a 2023 deal mediated by China. Regional security is crucial to the realization of Saudi Arabia’s ambitious Vision2030 program, which greatly relies on global investor confidence and trust, and in particular its crown prince and de facto ruler Mohammed bin Salman.

In response, the kingdom began a rational shift in its local affairs, initiating a political reunification process that surprised many observers. Even though the continuing loss of Gaza has slowed these efforts, at least for the moment, Riyadh has even taken steps toward normalization with Israel.

Jewish strikes on targets in Syria continue at the same time as the nuclear agreements are taking place. The social environment of Syria has been dramatically altered by the Assad regime’s collapse at the end of 2024 and the support for Russia, one of its long-standing supporters.

Moscow has taken a cautious stance despite the country’s previous president, Bashar al-Assad, who has found shelter in Russia, out of concern that Syria’s fresh regime will attack and threaten its effectively crucial military installations along the Mediterranean coast. Members of groups that the Assad regime had formerly supported, particularly the Alawi societies, have eluded the Russian naval base in Latakia in search of safety.

However, thousands of others have been killed as a result of the rise in crime as the forces of the new government, led by Ahmad al-Shara, attempt to eradicate all remnants of the Assad government. This is a series of events that resemble what happened in Iraq 20 years ago when the “de-Ba’athification” process attempted to remove all vestiges of Saddam Hussein’s government from public career.

local get ambiguous

The situation in the entire region is perilous, and the world powers ‘ actions are still having an impact. The threat of Taiwanese influence in the region grows as Washington presses Tehran and Moscow.

Unfortunately, Trump’s tariffs on China does drive Beijing further into the Middle East as it tries to make the most of the options that are present. The Middle East is securely positioned within China’s corporate interests thanks to its Belt and Road Initiative. This is likely to give the conflict between Washington and Beijing a new lease of life.

The people of the Middle East are still paying the heaviest rate all the while. A combination of rising food prices, uncertainty, fears of a regional turmoil, and precarious political conditions is what is creating the perfect storm that makes everyday life more difficult and challenging.

At Lancaster University, Simon Mabon is a teacher of international relations.

The Conversation has republished this essay under a Creative Commons license. Read the text of the content.

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Trade war has caught Wall Street between a rock and a hard place – Asia Times

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The trade war between China and the US has spiraled into uncharted territory. On April 10, the Trump administration imposed a tariff of 125% on all Chinese imports. China called the actions unfair and responded with similar measures.

Within the broader debate around unravelling economic ties between the US and China, where economic interdependence has increasingly been viewed as a threat to US national security, this escalation raises questions about whether global finance is also reducing its presence in China.

After all, the risks of financial connectivity with China have been discussed prominently by US policymakers in recent years. And many financial analysts have spent much of the past year discussing whether China has become “uninvestable” due to rising geopolitical tensions.

However, as I show in a recently published study, most global financial firms have continued to expand their presence in Chinese markets over the last decade, even as tensions have intensified.

Crucially, they have done so on China’s terms, operating within a system that prioritizes government oversight and policy goals over liberal market norms. This pragmatic accommodation is quietly reshaping the global financial order.

China’s capital markets, which have historically been sealed off from the rest of the world, have been opening up in recent decades. This has prompted global financial firms to expand their footprint in China.

Investment banks such as Goldman Sachs and JP Morgan have taken full ownership of local joint ventures. And asset managers like BlackRock or Invesco have established fund management operations on the Chinese mainland.

Yet China has not liberalized in the way many in the west expected. Rather than conforming to global norms of open, lightly regulated markets, China’s financial system remains largely guided by the state.

Markets there operate within a framework shaped by the policy priorities of the central government, capital controls remain in place, and foreign firms are expected to play by a different set of rules than they would in New York or London.

Foreign investors have been allowed to buy into mainland markets, but through infrastructure that limits capital outflows and preserves regulatory oversight.

Rather than adapting China to the global financial order, Wall Street has accommodated China’s distinct model. The motivation behind this is clear: China is simply too big to ignore.

Take China’s pension system as an example. Whereas pension assets in the US amount to 136.2% of GDP in 2019, in China these only amounted to 1.6%. The growth potential in this market is enormous, representing a trillion-dollar opportunity for global firms.

Consequently, index providers such as MSCI, FTSE Russell, and S&P Dow Jones – key gatekeepers of global investment – have included Chinese stocks and bonds in major benchmark indices.

These decisions, taken between 2017 and 2020, effectively declared Chinese markets “investment grade” for institutional investors around the world. This has helped legitimize China’s market model within the architecture of global finance.

America strikes back

In recent years, Washington has sought to curtail US financial exposure to China through a growing set of measures. These include investment restrictions, entity blacklists, and forced delisting for Chinese firms on US stock exchanges. Such actions signal a broader effort to use finance as a tool of strategic leverage.

The moves have had some effect. Some US institutional investors and pension funds have declared China “uninvestable” and are reducing their exposure. American investments in China have roughly halved since their US$1.4 trillion peak in 2020.

But attributing this solely to geopolitical pressure overlooks another key factor: China’s underwhelming market performance. A protracted property crisis, a government crackdown on tech companies and a weak post-pandemic economic recovery have made Chinese markets less attractive to investors in purely financial terms.

More strategically oriented investors from Asia, Europe and the Middle East have invested more into Chinese markets, filling gaps left by US investors. Sovereign wealth funds from the Middle East, especially, have engaged in more long-term investments as part of broader efforts to strengthen economic cooperation with China.

And at the same time, many Western financial firms have doubled down on their presence in China, expanding their onshore footprint. Since 2020, institutions such as JP Morgan, Goldman Sachs and BlackRock have opened new offices, increased their staff, acquired new licences and bought out their joint venture partners to operate independently as investment banks, asset managers or futures brokers.

It has become more difficult to invest foreign capital in China. But Western financial firms are positioning themselves to tap into China’s huge domestic capital pools and capture its long-term growth opportunities – even as they tread carefully around geopolitical sensitivities.

Fragmenting financial order

It is too early to predict the long-term effects of the current geopolitical tensions. But Wall Street is trying to placate both sides. On the one hand, it is adapting to capital markets with Chinese characteristics. And on the other, it is trying not to antagonize an increasingly interventionist America.

However, while holding its breath amid further escalation and having scaled back some of its activities, Wall Street has not left China. It is instead learning how to work within the constraints of a system shaped by a different set of priorities.

This does not necessarily signal a new global consensus. But it does suggest that the liberal financial order, once defined by Anglo-American norms, is becoming more pluralistic. China’s rise is showing that alternative models – in which the state retains a strong hand in markets – can coexist with, and even shape, global finance.

As tensions between the US and China continue to rise, financial firms are learning to navigate a world in which existing relationships between states and markets are being reconfigured. This process may well define the future of global finance.

Johannes Petry is CSGR research fellow at the University of Warwick.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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BMA moves to amend city rules

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PUBLISHED: 18 Apr 2025 at 03: 30

According to the BMA, the state’s 40-year-old BMA Act will be updated to modernize urban management while increasing the city’s operational efficiency.

Aekwaranyu Amrapal, a BMA official, stated yesterday that the organization is proposing changes to the BMA Act 1985 to increase efficiency in response to the difficulties that confront a contemporary city.

It has become apparent that Bangkok also struggles with structural issues, such as frequent road construction, significant traffic congestion, under-used areas beneath expressways, and untidy overhead cables, after nearly three years of work and gathering common feedback from various communities, he said.

These issues, he said, generally stem from restrictions within the existing administrative system, which has been in place for more than 40 years.

He stated that the proposed BMA Act amendments will concentrate on three main points: duties and powers, revenue and budget, and operational structure.

The BMA’s authority may be strengthened with the passage of the article, including enforcing emission standards for cars and all kinds of factories, providing extensive care to the most vulnerable in Bangkok, and taking more effective steps to combat illegal businesses in the city.

With the new legislation, the BMA will be able to generate extra revenue through innovative fees or taxes, such as a pollution tax, hotel tax, and a surcharge on used vehicles.

At 2528. thailand, the BMA invites people to attend an online hear. come. which will be available for input until May 18th.

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South Korea’s strategic autonomy and India – Asia Times

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In today’s rapidly evolving international landscape, the concept of a “pivotal state” is gaining renewed attention. As the global order transitions into a phase of intensified great-power rivalry, particularly between the United States and China, countries that can maintain strategic autonomy while influencing regional and global power dynamics are emerging as vital players.

South Korea has, with its advanced economy, vibrant democracy, strategic geographic position, and growing soft power, all the essential ingredients to play such a role. Yet, under the Yoon Suk-yeol administration, Korea has drifted from this potential, becoming overly reliant on one side of the geopolitical spectrum.

Now, however, with the political tide turning and the possibility of Lee Jae-myung ascending to the presidency, Korea has a real opportunity to reset its course and finally step into the role of a true pivotal state.

A pivotal state is not merely a middle power, but a country that actively shapes the balance in great-power politics. Unlike satellite states that gravitate around dominant powers, a pivotal state maintains a strategic center of gravity of its own. It responds flexibly to shifting international dynamics, refuses to become a vassal of larger powers and uses diplomacy and autonomy to enhance its national interests.

Examples of such countries include India and Brazil – states that pursue independent foreign policies and often play both sides when necessary, leveraging their positions for national gain without being fully subsumed into any alliance system. These nations do not just survive the global power competition – they shape it.

Missed opportunity under Yoon

When President Yoon Suk-yeol came to power in 2022, he proclaimed Korea’s ambition to become a “global pivotal state.” At face value, this was a welcome shift from past administrations that often wavered between great powers. Yoon promised bold, principled diplomacy that would elevate Korea’s standing on the global stage.

However, in execution, this vision became more rhetoric than reality. Instead of striking a balance between competing powers, the Yoon administration veered sharply toward unconditional alignment with the United States.

It enthusiastically embraced the US Indo-Pacific Strategy, tightened security and intelligence cooperation with Washington and Tokyo, and made highly visible moves such as hosting extended deterrence dialogues and participating in anti-China rhetoric.

This foreign policy posture, while arguably addressing immediate security concerns, came at the expense of Korea’s strategic autonomy. Moreover, by choosing clear alignment in a world that is increasingly multipolar, Korea forfeited its ability to mediate, influence or act as a bridge between diverging global interests. In doing so, it reduced itself from a potential rule-shaper to a rule-follower.

It alienated not only China – its largest trading partner – but also developing nations that value non-alignment and autonomy. The Yoon administration’s vision of a pivotal Korea turned out to be a paradox: how can a nation claim the mantle of a global pivot while acting as a strategic extension of another great power?

Why now is the time

There are several reasons why now is the right moment for South Korea to have a true strategic autonomy. The global power structure is fragmenting. The Cold War’s rigid bipolarity is long gone. Even the current US–China rivalry is increasingly complicated by the rise of influential players like India, Russia, Turkey, and Brazil.

This emerging multipolarity offers middle powers like Korea a rare and valuable space to maneuver – provided they have the strategic vision and political will to seize it. At the same time, cooperation among great powers is proving unstable and unpredictable.

The shifting dynamics of the war in Ukraine and the behind-the-scenes bargaining between the US and China reveal a hard truth: Smaller nations can be easily sidelined or sacrificed in the name of strategic compromise. South Korea must not allow itself to remain a passive observer while others decide its fate.

Meanwhile, the world’s attention is increasingly focused on Asia. As the geopolitical center of gravity shifts toward the Indo-Pacific, Korea finds itself at a unique crossroads. But to wield influence, it must move beyond the role of a subordinate within a US-led axis and stand as a confident, self-defining actor. India’s example proves this is not only possible – it is necessary.

A balanced approach under Lee Jae-myung?

As South Korea heads toward another electoral shift, the political winds are changing. The opposition Democratic Party, led by Lee Jae-myung, is gaining momentum. Should Lee win the presidency, Korea may finally find the political leadership necessary to realize the true meaning of a pivotal state.

Lee’s foreign policy signals indicate a desire to rebalance Korea’s diplomacy – not by abandoning its alliance with the United States, but by supplementing it with greater strategic flexibility, economic pragmatism and a non-ideological approach to China and the Global South.

In his public speeches, Lee has emphasized cooperation over confrontation, economic sovereignty, and diplomatic pragmatism – principles that align well with the idea of a pivotal state.

Rather than choosing between Washington and Beijing, a Lee-led administration would likely pursue a “both-and” strategy. This includes maintaining the security alliance with the US while re-engaging China diplomatically and economically, expanding relations with ASEAN, Middle Eastern countries, and Eurasian nations and strengthening South Korea’s voice in multilateral forums such as the G20, APEC, BRICS+ and the Shanghai Cooperation Organization (SCO).

Lee’s foreign policy is also expected to prioritize technological sovereignty, green diplomacy, and economic diversification – all key areas where Korea can assert its influence globally without taking sides. Under such a strategy, Korea could begin to function as a connector, not just a consumer, of international norms.

Learning from India

India presents a timely and practical example as South Korea seeks to redefine its role in the global order. While maintaining strong strategic ties with the United States, India has consistently upheld its strategic autonomy, refusing to be drawn into any single power bloc.

Instead, it pursues a pragmatic, issue-based diplomacy rooted in national interest and guided by values – without becoming subordinate to any major power.

South Korea can draw important lessons from India’s approach. India’s “Non-Alignment 2.0” strategy allows it to engage deeply with the US while simultaneously participating in multilateral platforms like BRICS, the Shanghai Cooperation Organization (SCO) and the G20 alongside countries such as China and Russia.

This flexible, multi-vector diplomacy enables India to navigate a complex geopolitical landscape without being locked into rigid alliances. Korea, too, can adopt such a strategy to avoid the risks of bloc-based alignment and preserve its strategic space.

India’s growing engagement with the Global South – particularly in Africa, Latin America and Southeast Asia – has significantly boosted its international standing. Korea can work with India to develop closer ties with these regions, allowing it to diversify its foreign policy engagements without undermining its existing relationships with rising power blocs.

Both countries can co-invest in development projects, technology transfer, and sustainable infrastructure, thereby expanding Korea’s global footprint and building partnerships that go beyond the traditional US–China binary.

Beyond the pursuit of strategic autonomy, India’s focus on technological and trade sovereignty offers another valuable blueprint for South Korea to consider in strengthening its position as a sovereign and globally autonomous power.

In critical sectors such as semiconductors, clean energy, and digital infrastructure, India has launched initiatives aimed at reducing external dependency and building resilient domestic capabilities. South Korea, facing its own challenges due to overdependence on select global supply chains, can benefit by following a similar path – strengthening self-reliance while remaining globally competitive.

By aligning more closely with India and embracing a broader, multidimensional strategic vision, South Korea can overcome its current limitations and emerge as a more independent, respected actor in both regional and global affairs. Thus, through strategic learning and enhanced cooperation with India in both economic and geopolitical domains, South Korea can strengthen its capacity to emerge as a genuinely global pivotal state.

This growing partnership is not about choosing sides, but about standing together – confidently and collaboratively. Through deeper cooperation and shared leadership, Korea and India can shape a more inclusive, balanced, and multipolar international order, reinforcing one another’s journey toward genuine strategic autonomy.

By following India’s lead, South Korea can reclaim a more self-directed, balanced foreign policy – one that protects its national interests while contributing meaningfully to a more stable world.

The strategic identity Korea urgently needs

To become a true pivotal state and have strategic autonomy , Korea must craft a foreign policy identity grounded in self-determination rather than alignment. This doesn’t mean taking an anti-American or pro-Chinese stance – it means being unequivocally pro-Korea.

At the core of this identity lies the principle of strategic autonomy: South Korea makes decisions based on its own national interests, not according to the expectations or pressures of its allies.

Such an approach requires balanced engagement, meaning South Korea should actively pursue diplomacy with all major powers – especially those in Asia and the Global South – while also playing a constructive role in multilateral forums. At the same time, Korea’s  new diplomacy must be guided by value-based pragmatism. This involves upholding principles like democracy, peace, and the rule of law, while also acknowledging the realities of a diverse international system.

Korea today stands at a historical crossroads. The failures of the Yoon administration to fulfill the promise of a global pivotal state have shown what happens when rhetoric is not matched by strategic independence. But this failure also provides a valuable lesson – that true leadership on the global stage requires courage, balance, and the will to chart one’s own path.

With Lee Jae-myung poised as a serious contender for Korea’s next presidency, the country may have its first real opportunity in decades to shift from alignment to autonomy, from reactive diplomacy to strategic leadership.

The world does not need another follower in the US-China rivalry. It needs a Korea that stands firm, speaks clearly, and acts wisely – a Korea that can finally become the true pivotal state it was always destined to be.

Korea’s moment to reclaim its strategic autonomy has finally arrived – and by looking to India as both a partner and a model, it may discover its clearest path forward and its closest ally in these challenging times.

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‘Sanity will have to prevail’: Malaysia’s key exporters in limbo, fear but some hopeful over Trump’s tariffs

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Wong Siew Hai, leader of the Malaysia Semiconductor Industry Association, stated to CNA that businesses in the industry are anticipating the worst while hoping for the best. &nbsp,

” We are waiting to see how much… we get hit ( in tariffs ),” Wong said.” It’s not business as usual right now.” &nbsp,

” If you hope for the best, it will be 10 %. However, he continued,” I guess it’s 24 % ( same as Malaysia’s reciprocal tariff rate ), and hopefully not more,” he said. &nbsp,

Wong claimed there was no current end to the semiconductor chip industry’s exports to the US, but that the doubt is not beneficial for the sector. &nbsp,

According to business analyst Samuel Tan, who is also the president of the Johor-Indonesian Business Chamber, the 90-day purgatory is likely to have a ripple effect on the semiconductor supply chain.

The uncertainty-filled culture is bad for manufacturers, even with the 90-day relief. They won’t be able to purchase parts for upcoming output, which will inevitably destroy the entire supply chain, Tan said. &nbsp,

Trade professional Deborah Elms predicted that semiconductor taxes could become higher than the 24 % reciprocal tariffs imposed on Malaysia.

Semiconductors and electronics are “at special risk,” she said, because they will be subject to a different kind of tariff program. Even if reciprocal taxes are eliminated or reduced, it is less likely that something similar will be applied to items sold under Section 232.

Elms noted that hardwood is being looked into under Section 232 and, consequently, this could have an impact on furniture goods. &nbsp,

The Trump staff enjoys taking a very broad definition of a field, even though I do not believe this will get furniture. Elms, the founder of the Asian Trade Center and head of trade policy at the Hinrich Foundation, said it is” something worth watching ( out for )”.

In the fifth-highest exports to the US, a figure released by Trading Economics shows that furniture made up about 3.6 % of all total imports from Malaysia to the US in 2024, trailing only semiconductors, equipment, medical equipment, and plastic.

Some Muar furniture manufacturers are involved that forest and furniture may develop into a separate tariff category, according to KS Design’s Ng.

” We are a little involved… that timber could be subject to a separate tariff and that it would be more than the 24 % ( reciprocal tariff for Malaysia ),” he said.

RUBBER GLOVE COMPANIES AND PALM OIL MAY BENEFIT.

Minister of Investment, Trade, and Industry Tengku Zafrul Abdul Aziz acknowledged at a media conference on Monday that some” was yet benefit” from Trump’s taxes.

Business players and observers claim rubber, palm oil, and even semiconductors was benefit, but he did not specify which industries. However, the caveat is that US laws was quickly alter, making long-term estimates challenging.

Although the tariffs are not ideal, Nivas Ragavan, vice-chairman of the Federation of Malaysian Business Associations ( FMBA ), claimed that having a lower rate than its regional neighbors gives Malaysia a competitive advantage.

It might provide enough motivation for some US consumers and investors to purchase from Malaysia, he said, especially in those in industries like manufacturing, gadgets, and medical supplies.

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Malaysia PM set to meet Myanmar junta chief amid opposition to talks

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Anti-Juta organizations express concern about the appointment.

PUBLISHED: 17 Apr 2025 at 10: 32

An activist holds a picture of Myanmar's junta leader Min Aung Hlaing during a protest against his visit to Thailand and attending the 6th BIMSTEC Summit in Bangkok, April 4, 2025. (Reuters photo)
During a rally against Min Aung Hlaing’s visit to Thailand and his participation in the 6th BIMSTEC Summit in Bangkok on April 4, 2025, an advocate holds a photo of Myanmar’s coup leader in a photo. ( Photo Reuters )

Anwar Ibrahim, the prime minister of Malaysia, and Anwar Ibrahim, the coup chief of Myanmar, are scheduled to meet in Bangkok on Thursday to discuss a peace extension. Some groups have criticized the meeting, which is scheduled to include some meetings to discuss the military conflict in the earthquake-ravaged nation.

Anwar has stated that he will join Myanmar’s Senior General Min Aung Hlaing on humanitarian grounds despite the South Eastern bloc’s longstanding rejection of the junta leadership.

Sai Kyi Zin Soe, an independent political analyst based in Bangkok, said,” There’s a chance that the coup will use these opportunities to establish legitimacy within the Asean framework.”

Asean barred the ruling generals from its meetings because they failed to adhere to the bloc’s peace plan after Myanmar’s defense deposed an elected civilian government in a 2021 revolt and sparked a civil war.

However, a strong earthquake of magnitude 7.7, which hit Myanmar on March 28 and killed more than 3,600, gave Min Aung Hlaing a eminently unique diplomatic opening, including a trip to Bangkok for important meetings in early April.

Min Aung Hlaing and Anwar will join in the Thai capital within a fortnight, according to two political solutions in Bangkok.

One of the resources added that in his capacity as Asean chair, Anwar has appointed a specific adviser for Thailand’s former premier Thaksin Shinawatra.

Malaysia’s Embassy in Bangkok, Thailand’s Embassy, and the Thai foreign government did not respond to inquiries about the Thai government’s and Thaksin’s daughter’s daughter’s, paetongtarn Shinawatra, meeting in Bangkok.

Effortless judgment

A number of anti-junta organizations, including the Karen National Union and the dark National Unity Government, urged “utmost prudence” regarding the meeting, which they claimed was being held under the pretext of providing humanitarian support.

According to a statement released on Wednesday,” The military coup led by Min Aung Hlaing is a culprit of apparent breaches of the Asean five-point consensus.” They referenced the group’s peace plan for&nbsp, Myanmar.

” Any coercive engagement with the martial leader- who is regarded as a criminal in general- must be approached with the greatest caution.”

Anwar stated due to his explore that a peace had been sought since the earthquake, which was the country’s deadliest normal disaster in years. It occurred during a civil war that left more than 3.5 million people homeless and destroyed the business.

Following similar goes by insurgent groups and the NUG, the defense declared a 20-day peace on April 2, but it has continued to launch attacks, according to the United Nations and other organizations.

According to the scientist Sai Kyi Zin Soe,” They have boycotted the involvement of the coup since 2021.” But this meeting right now could actually destroy that position.

Asian groups include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

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Aboard the ‘silver train’, China’s retirees do their bit to offset Trump’s tariffs

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18 minutes ago
Stephen McDonell

China correspondent

BBC/Benjamin Begley A group of four people - two men and two women - carrying bags in their hands, the front two wearing hats and blue tops, walk along the platform of a train with stripes of blue, white and yellowBBC/Benjamin Begley

Beijing insists it will stand firm in the face of Donald Trump’s tariffs on Chinese goods. It has been trying to reassure everyone that the country is strong and the economy is resilient enough to weather this latest storm.

But this week, Chinese officials have acknowledged the potential for economic pain as a result of the unfolding trade war with the US.

One option for policymakers here is to try to increase domestic consumption to make up for lost export revenue.

China has a massive population and, if they start buying more stuff, Chinese companies won’t have to rely as much on trade overseas.

A key target in this endeavour are retirees with potentially decades of savings.

Now the government wants them to spend some of it – for the good of the country.

And initiatives like the “silver train” – which are tailored specifically to older travellers – aim to do just that.

On board the Star Express, the cocktails are poured and the karaoke microphone is passed around, as retirees party their way through China’s south-western Yunnan province.

The roast goose is being devoured with shots of baijiu, a Chinese white spirit alcohol.

“We have been working hard all these years,” says 66-year-old Daniel Ling, who is travelling with a group of retired or semi-retired friends.

“The important thing when we reach this age, is to know what is the right thing to do – and that is to really enjoy life.”

BBC/Benjamin Begley A bartender wearing a pink vest, purple trousers and black bowtie pouring a drink on to a glass sitting on top of a white semi-circular counter.BBC/Benjamin Begley

The initiative hopes to turn an economic problem into an economic solution by giving older people a fun avenue to spend more.

Families are not spending enough because they don’t feel financially safe – the property crisis has diminished the value of their number one asset: their home. And growing unemployment has also potentially made their job less secure.

Add to the mix an ageing population and low birthrates and the proportion of retirees grows each year, making it harder for the economy to support them.

But what retirees do have is time on their hands and money to spend.

So now they are to be given more opportunities to splurge with special trains designed to take them to sites they might not normally visit – parts of the country further afield, which need a financial shot in the arm.

“The main places where the silver trains will stop are undeveloped rural areas or small towns with struggling economies,” says Dr Huang Huang, a research associate from the China Tourism Academy who has been studying the potential impact of this plan.

“They will consume various products on the trains, but after they pull into a station, they will also visit tourist attractions and traditional villages.”

BBC/Rachel Yu A woman with black, short hair, wearing a red jumper and scarf around her neck is sitting at a train table where there are traditionally-ornamented bowls, a teacup and salt and pepper pots, looks out of the window at a reddish mountainside and pale blue sky.BBC/Rachel Yu

In Baisha, the travellers stop by the modest street stalls at the bottom of old, two-storey, wooden houses built by the local Naxi ethnic minority.

One of them approaches a vendor selling barbecued strips of yak meat. They look tasty and she buys a bagful. The vendor’s husband, who is also working at the stall, says this business is only a year old and that they need outside customers to survive.

All along this street you can get potatoes with spicy sauce, lamb skewers, fresh orange juice and the traditional clothing of the Naxi people.

This is a region where incomes are low and most young people leave when they reach a certain age because there are hardly any jobs for them.

It is also not an easy place for many retirees to reach, but these silver trains make it possible, with easy access to boarding and alighting, and with staff to help as well as extra medical support if required.

Shi Lili, 69, whose granddaughter is accompanying her, says the travelling spirit of her youth has been rekindled: “When I was young I really liked exploring other places by myself. Now I’m older, I have my family who can go with me.”

BBC/Rachel Yu Two travellers either side of a traditional Naxi dancer wearing a blue and white dress and petal-like ornamental headgear - all holding a long-handled drum - keep time to music with steps leading to the door of a cultural centre.BBC/Rachel Yu

By the end of last year, 22% of China’s population were over the age of 60, making up more than 310 million people.

So, if only the smallest percentage of China’s retirees take a silver train, it can still mean millions of ticket sales. And China’s railway authorities say they plan to be operating 100 routes within the next three years.

Such trips alone are not going to fix China’s massive challenge with low consumer spending. But economists would say these moves are a step in the right direction.

Older citizens now have a much greater desire to travel compared to previous generations, creating “huge potential”, according to Dr Huang.

“Given that China’s ageing population is now a reality going into the long run – something which is unlikely to the reversed – we should find more opportunities from this rather than always turning it into a challenge.”

Back on board the train, the silver adventurers are ready to crash out. And they can do so knowing that their big day out was – at least partly – for the benefit of all.

Then it’s onto the next town.

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Tuvalu unveils first cash machines in ‘momentous’ ceremony

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The prime minister praised Tuvalu’s debut as significant because the little Pacific island nation’s first ever cash systems.

The region’s 11, 000 residents have for the first moment had access to electronic bank since their installment.

On Funafuti, the country’s major area, five models and 30 sales connectors have been installed, including at its airport.

The move, according to Feleti Teo, the prime minister, “is both ancient and significant as the bank transitions into a completely new era.”

These were dreams for us, Teo said,” We’ve been in an analog space all along,” according to the Guardian.

” These devices don’t come low-cost,” said one user. However, we were able to provide this service to our citizens with the support of the government and large determination.

The ceremony took place in the town of Vaiaku on Funafuti, near the National Bank of Tuvalu’s office. Standard leaders, members of parliament, and company leaders were also present.

Before then, Tuvaluans had to go to a bank to literally withdraw money, and long lines form outside as pay day arrives.

For the first time, stores will be able to process digital payment.

However, the cash machines may first simply accept prepaid cards. The banks intends to introduce debit and credit cards that can be used abroad at a later time.

Siose Penitala Teo, the regional bank’s head, claimed that switching to electronic bank and payments may lead to financial empowerment.

Nine smaller islands in the South Pacific, which gained independence from the United Kingdom in 1978, make up Tuvalu.

All of the islands are low-lying, with no place on Tuvalu higher than 4.5 meters above sea level.

Regional politicians have argued that rising sea levels may cause the islands to become suffocated by climate change.

At the COP29 Climate Conference in Azerbaijan in November, Teo made a nationwide statement warning that rising sea levels as a result of melting ice will eventually leave Tuvalu completely submerged.

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Can China’s stimulus response offset Trump’s tariffs? – Asia Times

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Donald Trump’s problem is more apparent in China’s optimistic “around 5 %” development goal this year.

Every day the US senator raises taxes for coast products — 145 %, at least for today— he makes it harder for Xi Jinping to prevent Beijing’s death in 2022 and 1990. China has just twice in the past 35 years missed its goal for gross domestic product.

However, as long as his Communist Party organizes a dual-focused reaction to Trump’s one-man tax arms race, there is every reason to believe Xi may accomplish the seemingly unthinkable in 2025.

The first is a collapse of well-targeted signal to mitigate monumentally strong winds zooming China’s manner. The second is encouraging Xi’s 1.4 billion plus individuals to save less and invest more.

Goal No. 1 is undisputed. The only doubt is the size of the signal Team Xi is ready to unleash to raise usage, maintain the housing market and end deflation.

The need to strengthen is growing. For instance, Goldman Sachs predicts that Xi’s economy will grow only 4 % this year. Beijing’s actions to day, the Wall Street investment bank problems, aren’t enough to “fully offset the negative impact of the taxes”.

Tao Wang, an economist for UBS, predicts that China will experience only 3.4 % growth this year and 3 % in 2026 as Trump’s tariffs stifle exports.

According to Wang,” The price shock presents unprecedented challenges to China’s exports and does cause significant adjustments to the local economy as well.”

China’s client saving, it’s usually believed, amounts to roughly US$ 7 trillion. The US export of the country each year total about$ 450 billion.

If Trump’s tariffs were to eliminate, let’s say, half of that amount, Xi would have to depend primarily on home use to make up the difference. That’s feasible, many academics agree, so long as Beijing acts immediately and confidently.

Analyst Zhang Di at China Galaxy Securities anticipates a stimulus jolt of between 1.5 trillion yuan ($ 205 billion ) and 2 trillion yuan ($ 275 billion ) to turn the tables this month. Citigroup’s researchers gravitate more toward the 1.5 trillion yuan number.

” We see a greater possibility that domestic stimulus may be brought forwards”, Citi experts write. We believe that macroeconomic policies should cause domestic desire to rise in the face of external shocks.

On Wednesday, when most economists anticipate a 5.1 % growth level will be announced in the first quarter of this year, owners will get a new snapshot of the Chinese economy.

Increased governmental spending may be complemented by slashes in standard interest rates and supply need ratios. A higher budget deficit target of around 4 % of GDP, up from 3 % in 2024, was unveiled by Xi’s team last month.

The wider deficit will help the outlook for the economy, but we still don’t know how significant the fiscal impulse may be or whether it will effectively boost underlying domestic demand, warns Jeremy Zook, an analyst at Fitch Ratings.

Fitch, Zook says, still views Beijing’s 2025 GDP target as “ambitious” and predicts the economy will end up growing 4.3 % this year “due to headwinds from subdued domestic demand, lingering property-sector stress and rising external challenges“.

That leaves Xi’s top priority pumping up consumption. According to Zook, “public expenditure is projected to increase by 1.4 percentage points to 30 % of GDP,” but consumption-focused measures are still relatively low.

Roughly 300 billion yuan is allocated to a consumer goods trade-in program, up from 150 billion yuan last year.

However,” we think most policies are still centered on supply-side measures, such as investing in industrial advancement,” according to Zook. It is unknown if the amounts involved will be significant, but local governments will be able to use bond proceeds to purchase idle land or vacant housing units.

At the same time, many economists expect monetary policy to be eased via official rate cuts and RRR reductions. &nbsp,

According to Pinpoint Asset Management’s president, economist Zhiwei Zhang,” Deflationary pressure is persistent.” Making matters worse, he says, “policy uncertainty in the US is still elevated”.

According to Julian Evans-Pritchard, head of China economics at Capital Economics,” a lot of fiscal spending is still being devoted to expanding the supply side of the economy,” “while policymakers have signaled a willingness to do more to support domestic demand.”

Evans-Pritchard continues,” It seems unlikely that consumption support will be sufficient to fully offset weaker exports.” As such, overcapacity looks set to worsen, exacerbating downward pressure on prices”.

A desire to keep the yuan exchange rate stable is just one more aspect of Xi’s balancing act. This will be particularly challenging as Trump’s chaotic White House and the PBOC ease.

This year alone, the dollar is down 9.6 % versus the euro and nearly 9 % versus the yen.

This pattern may give Beijing the opportunity to tolerate a weakened yuan without being called a currency manipulator by Trump’s Treasury Department. However, fewer people generally believe that Xi is using a lower exchange rate to boost exports.

For one thing, notes HSBC strategist Joey Chew, a yuan devaluation could “weaken” consumer confidence and “risk capital flight” at the worst possible moment for Beijing.

Oversea-Chinese Banking Corp strategist Christopher Wong points out that policymakers may prefer to maintain some degree of measured yuan stability. A softer increase in the dollar-yuan fix should ease sentiments toward the yuan and give Asian currencies a boost.

Dan Wang, China director at Eurasia Group, warns that Xi using the yuan as a trade war weapon might be “inviting financial crisis on its own”.

Team Xi is veering the other way by acing to the contrary by promising to protect the yuan from inflation. In other words, speculators who short the yuan do so at their own risk.

Yet Xi’s government has a bigger challenge on its hands: Goal No 2, which is shifting China once and for all away from exports and debt-financed investment toward a domestic demand-led growth model.

The Politburo meeting in the middle of this month could represent Xi’s decisive push for higher value-added industries. Building bigger social safety nets to encourage households to spend more and save less is a crucial component of that transition.

Xi’s inner circle has been telegraphing moves to do everything from reducing regulations, boosting the birthrate, upping subsidies for some exports and devising a stabilization fund to shore up its stock market.

However, the real focus needs to be on developing the social safety nets that the municipal and central governments have been promising for years.

However, doing so is simpler said than done. In the medium term, for example, Xi’s land reforms that benefit China’s 477 million rural residents could just lead to higher rural savings unless they’re paired with substantial improvements in rural social welfare, says economist Camille Boullenois at Rhodium Group.

Rural residents had an&nbsp, implied savings rate of just 13.7 % in 2023, according to Boullenois, compared to 33.8 % for urban residents, probably because they have much less income to save.

Any increase in rural income would likely be set aside as precautionary savings to prevent future uncertainties, she says, “at the very least given the severe gaps in public services and social safety nets in rural areas.”

Generally speaking, Boullenois adds, Chinese households already bear a disproportionate share of basic service costs. In comparison to the Organization for Economic Cooperation and Development ( OECD ) nations, which had only 13 % of total healthcare expenditures in 2021, out-of-pocket, was responsible for 35 % of all out-of-pocket costs in China.

Similar to households, households spent an average of 7.9 % of their annual budgets on education, far exceeding the 1 % to 2 % seen in Japan, Mexico, and the US.

” Meaningfully boosting consumption requires structural reforms&nbsp, to address the rural-urban divide, the precarious position of migrant workers, and the misallocation of capital by state-owned enterprises and banks”, Boullenois says.

Many of these issues were addressed in China’s 2013 reform plan, but many of them have largely remained unresolved because of political and financial constraints.

According to Boullenois, the bottom line is that” substantial fiscal resources will be required.” &nbsp, Tens of trillions of RMB – likely around 30 % of China’s GDP – would be needed to fund both one-time investments, such as social infrastructure and financial stabilization measures, and ongoing expenditures to support social transfers and public services”.

That would require drastic changes to China’s tax system, increased central government borrowing, and reallocation of government resources.

Additionally, it implies more local government incentives to make sure that new fiscal resources are used for social spending rather than growth driven by investment.

Along with the necessary resources and financial commitments, moving toward a fundamentally new model requires big changes in the Communist Party’s mindset.

Although they are called “welfarists,” China’s ruling party bigwigs tend to have an aversion to being “welfarist,” which historically aligns with China’s tendency to view its citizens as a source of labor and tax revenue rather than as human resources to be cultivated and provided when in need, according to economist Thomas Duesterberg&nbsp at the Hudson Institute.

This, Duesterberg&nbsp, adds, “has resulted in a social safety net that considerably lags international standards, especially those of developed and even middle-income countries”.

According to Duesterberg, China’s local governments are burdened by high debt, and declining birthrates, marriage rates, and aging populations all contribute to the decline in government finances.

These issues contribute to the Chinese households ‘ growing financial vulnerability and raise significant issues for upcoming generations, he says. ” Families often shoulder the costs of caring for their elderly, educating their children and paying for healthcare”.

Duesterberg points out that China’s public healthcare spending is low, with only 7 % of GDP going to the national system.

Families typically cover at least 27 % of their total health expenses to cover gaps in their health insurance, compared to only 11 % in the US.

Part of the challenge, notes Erik Green, research associate at the International Institute for Strategic Studies, is Beijing overcoming “officials ‘ deep-seated risk aversion and consequent unwillingness to implement reforms and innovate policy solutions. These difficulties are likely to continue to hinder the progress of China’s economic, social, political, and military reforms despite the development of plans to address them.

Even in the midst of a global trade war that is getting worse every day, switching economic engines at the most insular is difficult.

The best-case scenario is for Trump to be chastened by recent chaos in global markets– and trillions of dollars of losses– and go easier on the tariffs. After all, according to Citigroup economist Xiangrong Yu, “any escalatory moves beyond the already prohibitive tariffs may carry more symbolic meanings than actual impact.”

By now, Trump is aware that Xi isn’t going to give in to his arms-trade tariffs. The official Xinhua News Agency reports that Beijing will continue to take “resolute measures” to safeguard its economic interests. That includes its retaliatory decision to increase US goods ‘ tariffs to 125 %.

Regardless of what Trump does, there is no defense in launching an economic offensive to revive domestic demand for Xi’s China. This month’s Politburo meeting is an ideal opportunity to pivot at long last toward consumer-demand-led growth.

Follow William Pesek on X at @WilliamPesek

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What a real anti-China trade strategy would look like – Asia Times

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Trump’s recent trade strategy will stifle China’s position as the world’s dominant nation, denigrate American technology and power, and alienate US allies and partners.

I also think it’s unlikely that this is willful, there’s an old notion that you should “never feature to hate that which is properly explained by stupidity”. The decision to roll out their tax plan in a careless, last-minute, on-again-off-again manner and the fact that Congress has not chosen to withdraw the government’s tax authority suggest that idiocy is at play here.

But in any situation, there are certainly some people within the Trump presidency and the MAGA movement who would like Trump to produce a business plan that helps to incorporate Chinese power.

According to CEA Chair Stephen Miran, who writes ,” China has chosen to triple down on its protectionist, export-led model to safe residual income, much to the consternation of the rest of the world.” And Treasury Secretary&nbsp, Scott Bessent went yet further, suggesting that confinement of China should be the primary purpose of US trade plan:

Scott Bessent emerged from this year’s market turmoil as a potentially unexpected cause trade negotiator, presenting a possible situation for the upcoming months: US agreements with long-standing partners that put pressure on China.

” They’ve been fine military allies, no great financial friends”, the original hedge fund manager said Wednesday of some of these US friends. In the end, the Trump administration should probably come to an agreement with them. ” Then we can approach China as a group”, he said.

Japan, South Korea, Vietnam, and India, which Bessent claimed are the nations that are close to China, are the nations he said he’s looking at. They are countries with which the US could work to isolate China, something that’s been called a “grand encirclement” strategy.

This is actually a very achievable goal. Every day that Trump’s tariff chaos makes the US look like a chaotic clown car makes it a less realistic goal, but as of right now, I still think that it would be possible for the US to radically pivot its trade and industrial policies in order to create a coalition of nations that could economically balance, compete with and even isolate China. And it’s not difficult to imagine how that approach would work.

But first, we should think about why we would &nbsp, want&nbsp, to economically pressure China and what we might hope to accomplish. In the end, in a perfect world, nations would simply trade with one another and become wealthy rather than engage in conflict. And China has plenty of good stuff to offer the world —&nbsp, cool cars, cheap solar panels and batteries, and lots more. Why should we trade with China in a hostile manner?

The reason is geopolitics. Even singing praises for the benefits of trade don’t address the fact that sometimes powerful leaders want to rule or even attack other countries for whatever reason. The world is an ungoverned place, and the balance of power is the only thing that keeps the peace.

China is currently the world’s top producer and exporter. Its current leaders also think of the US and many of its allies as either rivals or outright enemies. They appear determined to conquer Taiwan, sever parts of India, Japan, and the Philippines, and frequently rely on Chinese influence to rule smaller nations. It makes sense to want to weaken China’s ability to do all this, while strengthening the other nations ‘ capacities to resist it.

Therefore, the following should likely be among the objectives of China’s trade policy:

  1. Preventing China from gaining an overwhelming&nbsp, military advantage&nbsp, over other nations
  2. reducing China’s ability to impose economic pressure on other countries
  3. Reducing&nbsp, supply chain vulnerability&nbsp, in nations threatened by China, so that any future conflict with China wouldn’t crash those countries ‘ economies.

That doesn’t mean that China’s trade policy should prioritize prosperity and cool cars; rather, it should instead prioritize adding these other geopolitical objectives.

In any case, when I talk about economically” containing” China, that’s what I’m talking about. So, here’s a list of things we would do if we wanted to accomplish that goal seriously. Obviously, this list is very, very far away from anything the Trump administration is doing or contemplating. However, this is what I believe it would require.

Zero trade barriers with any nations other than China

Manufacturers need scale  to lower costs and maintain their competitiveness. One reason China’s manufacturers are so formidable — and why American manufacturers were so formidable relative to their rivals 80 years ago — is that they have access to a huge&nbsp, domestic market.

Chinese automakers like BYD can increase sales and lower costs to levels that no foreign competitor can match because they can sell untold numbers of cars to their billion customers. BYD is currently building a single factory that ‘s&nbsp, bigger than the city of San Francisco.

Another important factor that Chinese manufacturers are so successful is domestic supply chains. Practically everything that goes into a Chinese EV, particularly the battery, the metal, and the chips, is produced in-country. Instead of having to struggle to import it from abroad, it is now very quick and simple for Chinese manufacturers to source everything they need.

It’s inherently very hard for American manufacturers can match those two advantages. Our consumption is higher in dollars, but we have much fewer people, so our companies can’t ship as many units domestically. The US is much smaller than China. Chinese people buy&nbsp, about double the number&nbsp, of cars every year that Americans do.

Of course, America’s allies, including Japan and Korea, are also at a greater risk of having this issue. Smaller countries compensate by finding highly specialized niches to be competitive in. Due to its size, China can more easily create a fully self-sufficient manufacturing ecosystem ( which it has, in fact, spent the last 20 years trying to do ) and this places their supply chains and defense-industrial bases at a disadvantage.

The only possible way for China’s rivals to match it in size is to gang up. And in this situation, “gang up” refers to creating a free trade zone where both parties can trade freely.

If the US had zero trade barriers with Europe, Japan, Korea, India and the countries of Southeast Asia, those countries wouldn’t become exactly like one huge “domestic” market. There would still be language barriers, geographic differences, exchange rate fluctuations, and national regulatory differences that might unintentionally stifle trade.

But it would go a long way toward allowing American manufacturers — and European, Japanese, Korean, Indian, and Southeast Asian manufacturers — to attain the sort of economies of scale and supply-chain networks that China enjoys within its borders.

In essence, you would have to start imagining” Non-China” as a single, vast economic force in order to balance China. If this sounds familiar, well, it should.

Two trade agreements, such as the TPP and TPP with Asia and TTIP and TTIP with Europe, would have greatly contributed to the development of this kind of common market among non-Chinese manufacturing countries. Both were killed by Trump. This is the first thing you would do, in any case, if you wanted to economically balance China and lessen your dependence on it.

Tariffs on Chinese intermediate goods, and data collection on supply chains

Next, supply chain vulnerabilities among non-Chinese countries would be something you’d need to address. The ideal would be to make sure that non-China has the ability to make everything it needs to make, so that A) non-China can be self-sufficient in case of a major war, and B) China can’t dominate the nations of non-China by exerting pressure on key supply chain vulnerabilities ( like&nbsp, it’s doing right now&nbsp, with rare earths ).

One thing you need here is targeted protectionism. The idea is to prevent China from being able to put non-China manufacturers out of business with a sudden flood of subsidized exports. Imagine, for instance, that China decided to savagely dominate the chip industries in the United States, Japan, Korea, and Taiwan by launching a sizable wave of subventioned computer chips. The only way to prevent this strategy from working is protectionism.

Therefore, you need the ability to impose specific trade restrictions very quickly in industries that China is attempting to conquer. Note that this is very different from Trump’s tariff policy — it ‘s&nbsp, far more targeted&nbsp, in terms of industries, it’s only on China, and it has nothing to do with trade deficits or other macro imbalances. It’s more similar to the tariffs that Biden imposed on some Chinese goods.

But there’s a problem here, which is that standard tariffs don’t hit&nbsp, intermediate goods. Our tariffs assume that this phone is “made in Vietnam” if China manufactures a phone, disassembles it, then ships the pieces to Vietnam where Vietnamese workers piece it back together and sell it to America.

If laptops made in Mexico and sold in America contain Chinese chips, those chips aren’t subject to the tariff rate on Chinese goods — they’re only subject to the tariff rate on&nbsp, Mexican&nbsp, goods. In <a href="https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf”>his 2024 note, Stephen Miran makes this clear. 1

The answer to this is to apply tariffs to the nations where the value was added, not the country where something was finally assembled. Doing this would allow us to put tariffs on Chinese intermediate goods like computer chips and batteries, in addition to final goods like phones and cars.

Of course, this method of applying tariffs would require much more sophisticated data collection. We’d need to figure out where the components in each imported good originated. A small army of bureaucrats would be necessary for this, among other things.

Industrial policy for strategic industries

We would need to do more than just plugging new holes in the ecosystem to give Non-China a self-sufficient, robust manufacturing one. We’d have to&nbsp, fix the existing holes&nbsp, as well. For instance, China already produces the majority of the world’s batteries and processes the majority of the world’s rare earths. Those are vulnerabilities that need to be dealt with.

We need to start making things that we currently don’t make ( or that we make very little of ) in order to accomplish that. The best way to do that is industrial policy. Maybe given the right long-term incentives, those industries would reappear in non-China on their own, but giving them a helping hand fixes the problem much more quickly.

And industrial policy occasionally can contribute to non-China’s stability. For example, if Taiwan gets invaded or bombed by China or struck by a massive earthquake, the world’s chip supply could be seriously damaged because most of the factories of TSMC — the world’s dominant chipmaker — are in Taiwan. Therefore, it makes sense to press or persuade TSMC to relocate some of its factories to safer locations, such as the US, Japan, and elsewhere.

This was the cornerstone of Biden’s approach to industrial policy, with the CHIPS Act for chips and the Inflation Reduction Act for batteries and renewable energy tech. But this was only the start of a study, with only two sectors left.

Other industrial policies should be added for other sectors — drones, electric motors, machine tools, robots, telecom, and of course rare earths and mineral processing. They should be included in the mix, but they don’t have to be as extravagant and expensive as the CHIPS Act and IRA.

Of course, it’s not known whether Biden’s approach to industrial policy — which is similar to China’s, though smaller in scale — is the best one. Balaji Srinivasan offers an alternative strategy based on government-organized industry consortiums like SEMATECH in the 1990s in an interesting post. This is similar to how Japan did many of its industrial policies during its boom years.

In any case, industrial policy should be reinstated if the US and the rest of the non-China world want to compete with China.

Smart pro-investment policies here at home

China has structured its government policies around building lots of factories, which is another important reason why it is such a manufacturing superpower. That pro-investment policy has introduced macroeconomic distortions, but it has also allowed Chinese manufacturers to iterate quickly, to expand the ecosystem of suppliers, to scale up, and generally to do all the other things that make manufacturing work.

I don’t want to see the US allowing widespread pollution of its rivers or forcing millions of people to emigrate from their land in order to build factories in a bid to compete with China. But over the past half century, the US, even more than other rich countries, has thrown up a vast thicket of procedural barriers that block the building of new factories. Many of these barriers would be easily eliminated, which would greatly improve the ability to once again compete in American manufacturing.

To its credit, the Trump administration has actually been making some moves in this direction. For instance, Trump has acted in executive orders, eliminating a number of regulations governing the implementation of NEPA, one of the biggest procedural obstacles to development in the US. Experts on the negative effects of NEPA are optimistic that this change will significantly lessen NIMBYs ‘ ability to block factories, housing, and other development projects.

And while the US shouldn’t be trying to invest as much of its GDP as China does, raising it from its current low level should also be top of the priority list. Two policies, suggested by JD Vance and&nbsp, widely believed&nbsp, to be&nbsp, effective, are 100 % bonus depreciation and full expensing of R&amp, D spending.

Under the Office of Strategic Capital, the Trump administration is also testing out government loans for manufacturers. That’s a good idea, though of course, it’ll be subject to some amount of waste and corruption.

Much more can be accomplished. Private banks could be encouraged to make loans to manufacturers looking to scale up. Export promotion and the promotion of greenfield FDI in manufacturing are also thought to be promising concepts.

In any case, this is all aspirational on my part. The Trump administration has a total focus on its damaging and unproductive tariff policy. What’s more, zero tariffs on non-China countries, expansions of state capacity, and expanding on the legacy of Biden’s industrial policies definitely don’t seem like the sort of things this administration would be interested in.

This is essentially how you would go about making the world economy a fortress against Chinese power, if you wanted to, or did.

Notes

1 Miran does make a pretty substantial mistake, though. He stated:

” Freeman, Baldwin and Theodorakoplous ( 2023 ) find that, while just over 60 % of manufacturing intermediates imported into the U. S. came directly from China, incorporating the value-added of manufacturing intermediates that originated in China but were imported from other trade partners brought that number above 90 %.

These figures are far off. You can see Freeman, Baldwin, and Theodorakoplous ‘ estimates in Figure 2.3 in&nbsp, their paper:

This is the “look-through” exposure, or “estimation of the total value-added of manufacturing intermediaries that are Chinese. China is ultimately responsible for 3.5 % of all U. S. intermediate goods, which is about 20 % of the value of imported inputs. not 99 %. Miran is just way, way off base with his numbers here.

This article was originally published on Noah Smith’s Noahpinion&nbsp, Substack, and is republished with kind permission. Become a Noahopinion&nbsp, subscriber&nbsp, here.

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