•The double standards of US trade actions against China are appalling and simply an entrenchment of the country’s unilateralism.
•The WTO needs to call out the US for continuing to clip the wings of those it deems a threat to its hegemony.
Following President Donald Trump’s executive order issued in November that imposed an embargo on companies with alleged connections with the Chinese military, the New York Stock Exchange (NYSE) has stated its intention to delist three Chinese telecommunication firms from trading at the financial market.
Consequently, the NYSE will terminate trading by China Mobile, China Unicom (Hong Kong) and China Telecom, the top three telecommunication companies, between January 7th and 11th.
Arising from the order, several Chinese companies have also been pulled out from indexes run by MSCI, S&P Dow Jones Global Indices and FTSE Russell, securities which have global tentacles. This means that investors in major markets cannot invest in some lucrative ventures that the whims of Trump’s administration has branded as affiliations of the Chinese military.
Similar to other instances where Trump has passed rash judgments, he has no case on the Chinese telcos as military agents. Previous accusations of wrongdoing directed at these telecommunication firms have not yielded any concrete evidence of transgressions, and have pointed to the usual sabotage and envy against Chinese entrepreneurship. It is obviously an escalation of Trump’s trade war, which has so far complicated trade matters for the US.
The double standards of US trade actions against China are appalling and simply an entrenchment of the country’s unilateralism. Just for argument’s sake, how would the world would be today if countries outside the superpower spurned a wide range of technologies which originated from the military? Definitely, the idea of globalization would be non-existent.
Major telecommunication inventions that were first used in the military include the internet, Global Positioning System, radar, handheld transceivers, satellites, digital camera, computers and drones.
There are tens of other military inspired inventions that have transformed the way we live, making life easier and convenient for billions of people in the world. The US has contributed tens of these technologies, so it should in fact be embracing the perpetuation of this trend rather than casting aspersions on its modus operandi.
Therefore, one can only read mischief, envy and malice in Trump’s actions on China’s businesses operating in the US. Going by Trump’s thinking, it also puts into doubt the much-hyped US watertight data security particularly in Trump’s era, if hacking of its system was that simple.
For several years Trump’s administration has constantly cried wolf alleging cyber hacking of its government. It does not take a genius to figure out that these baseless accusations are aimed at justifying irrational actions like the diabolical delisting of Chinese telcos.
The delisting should also be juxtaposed with previous sanctions, some dating back to the February 1997 "entity list" that slapped license requirements on several Chinese businesses, research institutions and individuals for the export, re-export and transfer of certain items to the US.
Since mid-December 2020, more than 103 Chinese concerns have been added to this "military end user" list, effectively banning them from buying wide ranging US goods and technology.
Although the stratagem to cripple China’s economy goes way back, it is during Trump’s administration that it has acquired an inexplicable urgency, with the outgoing president crying louder than the aggrieved. In the absence of any evidence, claims of meddling by Chinese companies in the US have been rumors at best.
China is now the second largest initial public offering market after the US. Despite the Covid-19 pandemic, 396 companies were listed in 2020, raising about $72 billion in capital, both of which are among the highest in the last 10 years.
Hitting Chinese telcos, like what the US did with the fast growing social media apps TikTok and WeChat, is aimed at hitting the Chinese economy where it hurts most. According to information published by the US Department of Commerce and IT consulting firm IDC, China’s information and communication technology (ICT) market is projected to reach US dollars 8.1 trillion this year, representing 55 per cent of the country’s gross domestic product.
In 2017, China’s ICT exports totaled $781 billion while imports totaled $528 billion. Notably, the report says that competition from Chinese firms has become formidable as the quality of domestic hardware, software and services has been on an upward trajectory.
In line with its reform and opening up strategy of its financial markets, China is now the second largest initial public offering market after the US. Despite the Covid-19 pandemic, 396 companies were listed in 2020, raising about $72 billion in capital, both of which are among the highest in the last 10 years. Clearly, the US is punching above its weight on this arena and will ultimately hurt its own overall socio-economic development.
The World Trade Organization needs to take up its role of adjudicating trade disputes and other unfair practices with more authority and call out the US for continuing to clip the wings of those it deems a threat to its hegemony.