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China strikes back

Updated On: Jun 15, 2007

China has had quite a bad time for the last few weeks.

It is taking a lot of international criticisms, particularly from the West for is economic records (e.g. state-managed currency, large trade surplus, toxic medicine and toothpaste), for its foreign policy (e.g.Sudan), for its domestic governance (environment, human rights), etc. For some in China, it seemed they have had enough. There are signs that China is not happy with such sustained international criticisms.

There are also signs of tit for tat retaliation. In retaliation for US checks on China-made toothpaste, pet food, cough syrups and other medicines, China has launched a crackdown on U.S. food imports, seizing "rancid" pistachio nuts and instituting tough inspections for US-made products. China’s state media reported that China's General Administration of Quality Supervision, Inspection and Quarantine has increased checks of pistachio nuts imports from the United States after 20 tons of such nuts were found rotting and infested with ants. China has destroyed those nuts.

The nuts follow closely on the heels of previous rejection of nutritional supplement capsules and raisins from the US after detecting what the inspectors considered to be unacceptable levels of bacteria. "Items that do not meet safety and health standards must be handled strictly according to the rules, and in serious cases the goods must all be either returned or destroyed," Xinhua reported.

While other Western countries face the same toughened inspections with five containers of Evian mineral water manufactured by French food group Danone condemned by Chinese state inspectors for having excessive amount of bacteria, Xinhua reported that special focus will be given to U.S. healthcare products, poultry and pork, seafood and processed food oils.

Smaller trading partners close to the US have also become the target of stricter consumer checks in China. The Chinese government has warned Chinese students studying overseas that they should look before they leap, referring to the rush to obtain an overseas education and urged them to do their research first before enrolling in foreign schools. 'In choosing a school or courses run by a foreign school in a third country, students should try to avoid schools which are unstable or have dubious quality.'

The closing University of New South Wales (UNSW) Asia which has generated acute media attention and societal debate has also made it to official attention in China. According to local Singaporean media, zeroing in on UNSW Asia, China criticized the school for its 'exaggerated' and 'false' claims about being ranked among the world's top 50 universities. According to the same report, China noted that there is a growing number of other schools which it said have 'varying standards'.

China has chips that it can play when faced with international criticisms. Instead of buckling under those pressures, it can leverage its international reputation with its increased economic power and confidence that is derived from this economic prowess. The PRC is projected to have an estimated US$1.7 trillion in foreign-exchange reserves by the end of 2007. Because of this, China is enjoying a current bout of increased leverage over the US economy and this makes it unlikely that the United States would be able to pressure China indefinitely and get whatever it wants.  Indeed, China has toughened its stand and warned US lawmakers to back off from proposed legislation to pressure Beijing on the yuan’s exchange rate and currency reform, adding that “politicizing” trade would not be helpful.  Pro-China lobbyists and moderates aware of the interdependence of the two economies are already urging caution on the part of the US government and urging the US Congress to do well to focus on its own need for reforms.

EU’s ties with China is also increasingly contentious as EU’s trade deficit with China widens.  As noted by an article in the Straits Times, “underlying the trade dispute is a more profound change in the attitudes of key European governments”. China is no longer seen as a developing economy with lots of opportunities, but an emerging power with all its strategic implications and broader challenges.  The meeting between EU and China in the coming days will give an indication of the development of and trends in EU-China relations.  (14 June 2007)

Sources:

EU’s ties with China at crucial crossroads (Straits Times, 13 June 2007)

China tells US to back off over yuan revaluations (Straits Times, 13 June 2007)

China seizes "rancid" U.S. nuts amid health scares (Reuters, 13 June 2007)

China-US: A long, hot summer (Asia Times, 12 June 2007)

Chinese govt hits out against UNSW Asia  (Straits Times, 11 June 2007)