The war has compounded the strategic challenges of the conflict between Beijing and Washington, especially in light of the concerns that Chinese power poses to the West, with the continued expansion of the Silk Road Initiative, and the steady growth of economic, military and diplomatic capabilities.
In an attempt to make a noticeable impact, the Chinese administration announced in May 2020, a new strategy under the banner of “dual trading”, which is to fully develop the advantages enjoyed by the huge market in the country, as well as the potential of domestic demand to establish a new mode of development, characterized by trading. The domestic and international duality that complement each other.
In a report by the European think-tank Bruegel, which specializes in economic policies, the term “double trading” may seem like a word without much importance, but it is not, because it “dedicates China’s long-term ambition to become self-sufficient.”
Since former US President Donald Trump pushed to launch a trade and technology war against Beijing, the Chinese leadership has relied on a “double-trading” strategy to support China’s growth, and this basically means isolating the domestic market from the rest of the world, by eliminating any bottlenecks, whether in terms of natural resources Or technology, to vertically integrate its production and achieve self-reliance served by the huge Chinese domestic market.
While observers see that dual trading is part of China’s master plan to become self-reliant in terms of resources and technology, as well as in terms of demand through its huge market as well as the markets available through the Belt and Road Initiative, there are current consequences that prevent its optimal completion In light of global changes and the widespread economic crisis caused by the Ukrainian war.
international variables
“China’s dual trade strategy is not feasible with what the world is witnessing,” said Paul Sullivan, a prominent economic analyst, non-resident fellow at the Atlantic Council’s Global Energy Center.
He said, “China cannot isolate its economy from what is happening now, because Beijing is highly dependent on imports of energy, food, other raw materials, and much more, and this from an economic point of view cannot be done in a two way.”
“China has to find its market internally, because maybe export-led growth has faded, so it has to find growth internally now, but it still needs imports to do that,” Sullivan added.
Economic storms
Regarding the repercussions of the Ukrainian war on the future of the wide conflict between Beijing and Washington, the economic analyst pointed out that “some emerging markets are under tremendous pressure, and this pressure will appear in China and the United States, and both countries may head to economic storms.”
He continued, “This is not a time for conflict, Russia has inflicted severe damage to the global economy and political stability, and this harms China as well, because it will buy oil and gas from Russia because it needs them, and I am sure that the Chinese leadership can see the threats coming in its direction that erupted because of this war.” unnecessary, which could spread to other areas.
This is what the economic researcher, Muhammad Shadi, points out, in statements to “Sky News Arabia”, that “the United States is the first economic partner of China, and therefore Beijing is suffering from very great economic pressures coming from Washington, but it is proceeding with a strategy to reduce the trade deficit that includes several levels.
He explained that “the first level is to raise the technological component of Chinese exports and transfer Chinese exports abroad, and the second is to depreciate the long-term value of the Chinese yuan so that its exports reach competitive prices, and to maintain operating levels.”
According to Shadi, “China is working to diversify its industries’ supply chains, as well as production inputs, so that they do not depend on the United States, given that a large part of production inputs come from Washington, and a very large part of its products go there.”
He explained, “Therefore, Beijing wants to expand this matter, by obtaining raw materials from other countries and expanding into new markets, especially the European Union, with which Beijing established several partnerships in previous times.”
And the General Administration of Customs of China recently reported that trade exchange with the United States increased during the period between January and April of this year by 10.9 percent, reaching 245.73 billion dollars.
Taiwan crisis
Taiwan has become an arena for a clash between Washington and Beijing, especially with US President Joe Biden warning that China is “playing with fire”, pledging to intervene militarily to protect the island if it is attacked.
The US president likened “any Chinese invasion of Taiwan to Russia’s invasion of Ukraine,” prompting angry criticism from Beijing, which considers Taiwan a Chinese province that must be reunified with the mainland.
In this regard, Sullivan believes that “China is unlikely to attack Taiwan, given that Taiwan is a very important part of Beijing’s overall supply chains, and one of its most important sources of imports, especially since China is experiencing economic pressure, and the war will make things much worse for them.”
“The Ukraine war has put significant pressures on energy, food, minerals and other markets, and this is hurting both the United States and China, as well as many other countries,” he added.
He concluded by saying, “Inflation is a global problem, and it has a good chance of removing a large part of the global demand for goods and services from China and the United States.”
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