China never supplied weapons to parties in the Ukraine war, foreign ministry says
Guo Jiakun, a spokesperson for the foreign ministry, made the remarks in a regular press briefing in response to NATO chief Mark Rutte saying there was a "massive build-up" of the military in China, and that China was supporting the war effort in Ukraine.
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Reuters
34 minutes ago
- Reuters
Breakingviews - Transshipment is the new dirty word of trade
HONG KONG, July 21 (Reuters Breakingviews) - Where is it from? It's one of the top questions customs officials must ask of every shipment, alongside what it is and how much it is worth. Donald Trump's trade war could turn this inquiry on the origin of $3.3 trillion of U.S. goods imports into a quagmire. The dizzying spread of tariffs the U.S. president is imposing on American trading partners – ranging from a baseline duty of 10% secured by the United Kingdom to the threat of a punitive 50% charge on imports from Brazil – opens up a large arbitrage. Exporters, particularly in China, have a big incentive to misrepresent where their goods are from. The president is attempting to counter this risk by saying goods that are "transshipped" through lower-tariff countries will face higher charges. For example, the U.S. has imposed a 20% import duty on products originating in Vietnam, but will charge double that figure for goods routed via the Southeast Asian country. Transshipment is not a new word or concept. In trade, it simply means moving goods between vehicles such as airplanes, trains and lorries. Trump, however, is using it as a shorthand for tariff evasion or fraud. He has good reasons to be concerned. Just look at what happened when the president slapped duties on China in 2018. The share of U.S. imports arriving from the People's Republic fell by 8 percentage points to 13.4% between 2017 and 2024. However, China's total share of total global merchandise exports rose about 1.5 percentage points to 14.2% over a similar period. One reason is that some Chinese manufacturers dodged U.S. duties by re-routing everything from electronics to footwear through other countries, in particular Mexico and Vietnam. The exact size of the problem is a subject of intense debate and study among economists. Trump's new trade regime makes it even more complicated. The existing global trading system is based on applying a standard tariff on imports, and then granting goods from certain countries, or groups of countries, preferential access. Under Trump's new system, however, the U.S. will no longer have a standard non-preferential tariff, nor one of the world's lowest tariff regimes. Instead, the charges on goods arriving from different countries could vary by as much as 40 percentage points, depending on where U.S. tariffs end up. Separate levies that Washington intends to apply on semiconductors and pharmaceuticals will add further complexity. This raises the stakes for customs officials trying to determine where a product is from. So-called "rules of origin" were first introduced to help countries collect statistical data, and have proliferated over the past 30 years to support bilateral and regional free trade agreements. These rules are also supposed to help countries implement other policies, such as anti-dumping measures. The classic rule of origin is based on the concept of "last substantial transformation". This means the correct tariff depends on the country where the character of the product was last changed. This principle sounds simple but is anything but. Take clothing. Say a company sends a Chinese-made shirt to Hanoi, adds a "Made in Vietnam" label, and then ships it to the United States while paying the lower Vietnamese tariff. Most trade lawyers would agree that is fraud. But what if brands making clothing in Vietnam like Nike (NKE.N), opens new tab, Lululemon Athletica (LULU.O), opens new tab and Fast Retailing's (9983.T), opens new tab Uniqlo, use dye, cotton, buttons or zips from China? Determining a product's true origin becomes a complex and ever-changing mystery. The U.S. Department of Commerce tries to clarify the difference using the example of mixed frozen vegetables and cookies, opens new tab. Vegetables which are grown in various places and taken to another country to be mixed and frozen were not substantially transformed, so the mixture must be labelled with the origin of each ingredient. But if sugar, dairy products, and nuts from different countries are made into a cookie, the country of origin is the location where the ingredients are baked or processed. Today's supply chains are much more globalised and complicated. For motor vehicles produced by Ford Motor (F.N), opens new tab, General Motors (GM.N), opens new tab and Stellantis ( opens new tab, origin depends on the value of the contents. To qualify for the United States-Mexico-Canada Agreement, for example, at least 70%, opens new tab of a vehicle producer's steel and aluminum purchases must originate in North America. Tariffs can also vary depending on a product's American content. U.S. Customs and Border Protection says, opens new tab for imports where at least 20% of the value is from the United States, the reciprocal tariff will not apply to the U.S. components. Verifying the origin of goods requires cooperation. U.S. customs officials will get some help from countries including Malaysia, Thailand and South Korea, which are stepping up their effort to crack down on blatant re-labelling of goods. This is in their interest because cheap Chinese products are threatening to hollow out local industries. Support for the U.S. measures will drop, however, if Trump is serious about trying to squeeze China out of supply chains. The People's Republic accounts for nearly 29% of value added in U.S. imports from Cambodia, and almost 19% of those originating in Vietnam, according to research by Sonal Varma and Si Ying Toh at Nomura. Chinese investors are also big owners of factories across Southeast Asia. Despite the proliferation of rules of origin, the World Trade Organization estimates that 74% of global trade, opens new tab still flows under its "most favoured nation" terms, a principle whereby member countries treat imports equally regardless of their origin. For now, it looks like other economies are moving in the opposite direction from the United States. The European Union and Indonesia are moving ahead on finalising a free trade deal; China has extended zero-tariff treatment to 53 African countries; while talks over an EU-India trade pact are slated to continue in September. Trump could have satisfied some of his stated goals of reducing U.S. trade deficits, raising money and isolating China by imposing high duties on the world's second-largest economy, and a single lower tariff on the rest of the world. Indeed, that may yet be where the president's tariffs end up: On Wednesday, he said he would send letters to more than 150 'smaller' countries notifying them their tariff rates could be 10% or 15%. But that would still potentially leave more than 40 countries facing wildly diverging rates. Expect the new dirty word in trade – transshipment – to be used much more often in future. Follow Una Galani on Linkedin, opens new tab and X, opens new tab.
The Guardian
an hour ago
- The Guardian
China starts building world's biggest hydropower dam
Construction of the world's biggest hydropower megadam has begun, China's premier has said, calling it the 'project of the century'. The huge structure is being built on the Yarlung Tsangpo river, in Tibetan territory. Li Qiang made the comments on Saturday, at a ceremony in the region to mark the start of the build, leading Chinese markets to rise on the expectation of the long-planned megaproject, first announced in 2020 as part of China's 14th five-year plan. The dam has drawn criticism from India and Bangladesh, through which the river runs, as well as Tibetan groups and environmentalists. The project announced by Li is planned for the lower reaches of the river, according to the official state news outlet, Xinhua. Xinhua reported that the project would consist of five cascade hydropower stations, producing an estimated 300 million megawatt hours of electricity annually at a cost of about 1.2tn yuan (£124bn). In comparison, the Three Gorges dam cost 254.2bn yuan and generates 88.2m MWh. No further details were given about timing or scope of construction, but the figures reported by Xinhua exceed estimates from 2020. China, the world's biggest carbon emitter, is operating a huge renewable energy expansion as it seeks to reach emissions reduction goals and stabilise its power supply. It has tens of thousands of hydropower projects, far more than any other country. The Yarlung Tsangpo megadam will reportedly harness the power created by the river dropping 2km in about 50km as it winds through a canyon on a U-shaped bend. India and Bangladesh have voiced concerns over the project, fearing the water could be held or diverted away from them. The Yarlung Tsangpo becomes the Brahmaputra river as it flows south into India's Arunachal Pradesh and Assam states and finally into Bangladesh as the Jamuna river. Damming it could affect millions of people downstream. 'China can always weaponise this water in terms of blocking it or diverting it,' Neeraj Singh Manhas, special adviser for South Asia at the Parley Policy Initiative, told the BBC in January. The Indian government formally registered its concerns with Beijing over the project in December, and during bilateral meetings between the two countries' foreign ministers in January. In response, officials have said China does not seek 'water hegemony' and never pursues 'benefits for itself at the expense of its neighbours'. 'China will continue to maintain current exchange channels with downstream nations and step up cooperation on disaster prevention and mitigation,' a foreign ministry spokesperson said in December. Tibetan groups have also noted the presence of sacred sites along the river, and the lack of information about potential population displacement. Other hydropower projects in Tibet have inspired rare protests, resulting in brutal crackdowns from authorities, according to activists. Last year hundreds of people were arrested while protesting against the Kamtok dam on the upper reaches of the Yangtze river, which they said threatened to displace thousands of residents and submerge ancient Buddhist monasteries. The Three Gorges Dam is estimated to have displaced about 1.5 million people. Environmentalists have also expressed concern about wildlife in the region, as well as the significant tectonic shifting, severe landslides and extreme geography where the dam is expected to go. The Chinese government rejects the criticism, and says the project will stimulate jobs in the region, increase domestic energy supplies and spur on development in the renewables sector. 'Special emphasis must be placed on ecological conservation to prevent environmental damage,' Li said.
Reuters
an hour ago
- Reuters
Washington says China will not let US government employee leave the country
WASHINGTON, July 21 (Reuters) - The U.S. State Department said on Monday that the Chinese government had blocked a U.S. Patent and Trademark Office employee visiting the Asian country in a personal capacity from leaving. "We are tracking this case very closely and are engaged with Chinese officials to resolve the situation as quickly as possible," a State Department spokesperson said. The U.S. Patent and Trademark Office is part of the federal Department of Commerce. The individual's name and whether the person was detained were not disclosed. The Chinese embassy in Washington and the U.S. Commerce Department did not immediately respond to requests for comment. The Washington Post reported on Sunday that a U.S. citizen who works for the Commerce Department had traveled to China several months ago to visit family. The man was being prevented from leaving the country after he failed to disclose on his visa application that he worked for the U.S. government, the newspaper said, citing sources. Beijing has used exit bans on both Chinese and foreign nationals in connection with civil disputes, regulatory enforcement and criminal investigations. Analysts say the tactic is at times used to crack down on local dissent and also as diplomatic leverage in disputes with other nations. Washington and Beijing have had friction for years over issues ranging from tariffs to the origins of COVID-19 and Taiwan. Chenyue Mao, a Wells Fargo (WFC.N), opens new tab banker, has also been blocked from leaving China. Beijing's foreign ministry said on Monday she was involved in a criminal case and obliged to cooperate with an investigation. Mao was the latest of several executives from foreign corporations to be stopped as they tried to depart China. The U.S. bank suspended all employee travel to China after Mao's exit ban, a person familiar with the matter told Reuters last week, saying Mao was a U.S. citizen.
