Beijing: We have ‘will and means’ to counter tariffs

ation: Liu Rui/GT -    

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Big buyer: A container ship leaving Qingdao, China. United Nation’s data show US exports to China rose 684% between 2001 and 2024.— AP

BEIJING: China has called on the United States to remove unilateral tariffs as quickly as possible and work with it in the spirit of mutual respect, peaceful coexistence and win-win cooperation, in order to address respective concerns through dialogue and consultations on an equal footing, the Commerce Ministry says.

Chinese officials said on Wednesday that should Washington further intensify tariffs and restrictive measures against China, Beijing has the “firm will and abundant means” to fight until the end.

Their comments came after the State Council Information Office released on Wednesday a white paper titled China’s Position on Some Issues Concerning China-US Economic and Trade Relations, which noted that the recent US move of using tariffs as a coercive tool is a grave mistake and further exposes the typical unilateralist and bullying nature of the US government.

Since US President Donald Trump took office in late January, Washington has repeatedly imposed additional tariffs on China, and the tax rate on Chinese imports has now reached over 120%.

Noting that these actions could have a severe impact on China-US economic and trade relations, the white paper emphasised that the key is to respect each other’s core interests and major concerns and find proper solutions through dialogue and consultation.

The essence of China-US economic and trade relations is one of mutual benefit and win-win cooperation, despite the inevitable differences and friction that arise between the two countries due to their different stages of development and distinct economic systems, according to the document.

Trade data from the United Nations shows that the value of US goods exported to China reached US$143.55bil last year, up 648.4% compared with the US$19.18bil recorded in 2001.

The growth in US exports to China has far outpaced the 183.1% increase in overall US exports during the same period.

Detailing the white paper, a Commerce Ministry official said, “With firm will and abundant means, China will resolutely take countermeasures and fight until the end if the United States insists on further escalating economic and trade-restrictive measures.”

There is no winner in a trade war, and China does not want a trade war, the official emphasised, adding that the Chinese government “will by no means stand idle when the legitimate rights and interests of its people are being hurt and deprived”.

The official said that it is a typical act of unilateralism, protectionism and economic bullying for the United States to take tariffs as a weapon of exerting maximum pressure and pursuing self-interest.

Under the guise of pursuing “reciprocity” and “fairness”, the United States is engaging in zero-sum games and, in essence, seeking “America First” and “American exceptionalism”, the official said.

The United States is exploiting tariffs to subvert the existing international economic and trade order, prioritising US interests above the global common good, and sacrificing the legitimate interests of countries worldwide to serve its own hegemonic agenda, he added.

Noting that the United States is also deliberately severing the well-established global industrial and supply chains and breaking market-oriented free trade rules, the official said these practices seriously interrupt the economic development of countries around the globe and affect the long-term stable growth of the world economy.

Lin Jian, a spokesman for the Foreign Ministry, said at a daily news conference on Wednesday that “if the United States disregards the interests of the two countries and the international community and stubbornly persists in the tariff war and trade war, China stands ready to fight to the end”.

Cui Fan, a professor of international trade at the University of International Business and Economics in Beijing, said, “A trade war, for sure, produces no winner, but the United States is destined to suffer greater losses than others.”

On Tuesday, Goldman Sachs raised the odds of a recession in the United States to 45%, just a week after it said the odds were at 35%, as fears of an impending trade war increased.

It also revised its forecast for this year’s gross domestic product growth in the United States to 1.3%, down from 1.5% and cautioned about the possibility of a bear market.

Cui said the US tariff hikes will estrange allies, disrupt market dynamics, and provoke retaliatory actions that will reverberate throughout supply chains and hit US consumers hard.

More importantly, the measures fail to provide a clear path for the United States to regain its competitive edge in key industries, he added.

Navin Girishankar, president of the Economic Security and Technology Department at the Centre for Strategic and International Studies, said, “You can’t fight a trade war and then expect to win a tech war.”

Highlighting industries such as semiconductors, artificial intelligence and clean energy that largely rely on international collaboration, Girishankar said that tariffs would increase costs and reduce efficiency, eroding the ability of the United States bto compete in such sectors. — China Daily/ANN

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Time for Malaysia to keep its edge in global chips

 

The government’s new National Semiconductor Strategy provides a clear roadmap for the country’s move up the global technology value chain.

Penang’s Bayan Lepas Free Industrial Zone, home to hundreds of multinational companies, has succeeded because it offers everything these businesses need in one convenient location.

MALAYSIA’S semiconductor industry has been a source of national pride since Intel opened its first overseas assembly plant in Penang in 1972.

Since then, Malaysia has captured a 13% share of global testing and packaging, building a semiconductor industry that now accounts for 25% of gross domestic product.

The vibrant state of Penang is again at the top of the list for semiconductor investments, with dozens of major expansion projects underway.

There is a sense, though, that we are only scratching the surface.

With semiconductors only becoming more important to modern life, Malaysia’s chip sector is not just a business opportunity; it is an opportunity to put the country firmly at the centre of future supply chains in South-East Asia and around the world.

The government’s new National Semiconductor Strategy aims to do just that.

Backed by an initial RM25bil of public funding, the plan provides a clear roadmap for the country’s move up the global technology value chain.

The ambitious targets are a sign that Malaysia understands what’s at stake.

The government aims to attract RM500bil of investment into the sector, train 60,000 chip engineers and establish at least 10 Malaysian companies in design and advanced packaging.

None of this will be easy.

Chip factories and research hubs do not appear overnight.

Just putting a new chip design into production can take up to four months, involving hundreds of steps, including oxidation, photolithography, and etching.

Major new fabs or testing facilities can cost billions of dollars.

But while the new strategy will take time to show results, the stars are aligned in Malaysia’s favour. Businesses must look to seize this moment.

Building on strong foundations

For the best chance of meeting its semiconductor goals, Malaysia can call on a number of tried and tested ingredients.

The first is to acknowledge the power of free trade.

While semiconductor technology is in the geopolitical spotlight, Malaysia’s neutral position on global tariffs is a key part of its appeal to international businesses.

The country’s chip sector has a distinct advantage of being able to attract investment from both the United States and China – as well as many other countries.

Free trade zones are also a powerful pull for semiconductor companies that focus on re-exporting to overseas markets, such as in the outsourced assembly and test segment.

The concentration of skilled labour, specialised logistics and raw materials create an attractive ecosystem for new entrants.

Penang’s Bayan Lepas Free Industrial Zone, home to hundreds of multinational companies, has succeeded because it offers everything these businesses need in one convenient location.

Consistent policies

Consistent and coordinated policies are also critical in giving businesses the confidence they need to make long-term investment decisions.

The new semiconductor strategy ties in with Malaysia’s New Industrial Master Plan 2030, which emphasises the country’s digital infrastructure.

And, of course, sustainability will be a powerful enabler.

International technology companies demand access to clean energy to meet their own emissions objectives, so additional investment in renewable capacity and upgrades to the electricity grid will be needed to sustain the country’s competitiveness.

Collaboration between industry, government and utilities has produced encouraging signs: Intel’s rooftop solar installation in Malaysia is its biggest outside the United States.

Micron’s Malaysian facilities were the first in its global network to be powered by 100% renewable energy.

A historic opportunity

Demand for more advanced processing is also transforming the chip sector, as customers look for specialised hardware to support new technology, including artificial intelligence.

We see across the wider region that high-tech ecosystems generate valuable ancillary business opportunities – such as data centres, services, and advanced materials.

In Penang, a new crop of advanced semiconductor facilities from the likes of Infineon, Intel and ASE Tech will require new materials, new workers and new services.

The new semiconductor strategy recognises the historic opportunity ahead.

We must also acknowledge that it is a complex, globally connected industry, and that international competition for a share of higher-value front-end processes is more intense than ever.

That said, the success of hi-tech hubs like Penang – where HSBC opened its first office in Malaysia in 1884 – is a great example of how a diverse community, strong logistics and a supportive policy framework can facilitate the growth of a multi-billion-dollar industry.

The rewards of getting this right are tantalising.

In the new area of digital technology, semiconductors are only becoming more essential for businesses.

While the prize is significant, achieving it will require a deep partnership between industry and policymakers – underpinned by strategic planning, investment in skills and a commitment to free trade.

With all that in mind, Malaysia’s chip strategy could not have come at a better time.

Noor Adhami is HSBC’s international banking global head and Karel Doshi is HSBC Malaysia’s commercial banking head. The views expressed here are their own.

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