Trade War Helps China’s Belt and Road: China Brief

The US delayed a round of tariffs scheduled for China September 1. “The simple truth is that China’s share of bilateral trade with Belt and Road Initiative (BRI) countries, coupled with increasing trade with ASEAN, is more than compensating for any US trade downturn,” explains Chris Devonshire-Ellis for China Briefing. China advises its firms to find substitute markets. Some market adjustments could be permanent. “The big winners have been African and Latin American countries, many of which signed off on BRI MoUs last year.” China has a free trade agreement with the Association of Southeast Asian Nations, with no tariffs on 95 percent of goods, and Devonshire-Ellis reports that China-ASEAN bilateral trade is up 4.2 percent year-on-year. Indonesia, Singapore, Vietnam, Thailand and the Philippines benefit with more exports and higher economic growth. He goes on to note, “China has not yet made roads into Central America, so as not to overly push the US too far, but as Trump continues to build his wall with Mexico, these countries may feel better off under trade generated with Beijing rather than Washington DC.” Emerging economies may regard China, rather than the US, as the more predictable trade and diplomatic partner. – YaleGlobal