When giants clash US versus China in APEC)

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When giants clash US versus China in APEC)

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• No joint communique: For the first time, the Asia Pacific Economic Conference (APEC) summit could not produce a joint communique, as its leaders (US and China) couldn't agree on the wording.
• America First policy of President Trump: US led the charge that China was not doing enough to curb "unfair trade practices" and level playing field was missing.
• Give us more: US (and others) want 

1. more market access in China, 
2. IPR protections for American companies, 
3. cutback in State subsidies, and 
4. reduction in the trade gap with others ($375 b with USA).

• Mike Pence warns others: Pence gave a strategic pushback when he warned nations to avoid a debt trap with loans from China. At the same time, Xi Jinping pushed the Belt and Road Initiative aggressively. China views it as a means to secure economic predominance.
• World trading system: How will this impact the WTO and world trade? The escalating tariff war between US and China where they put higher tariffs on imports from the other has forced the IMF to downgrade global growth by 0.2% to 3.7%.
• Eventually, what happens? Global supply chains will be hit. Trade volumes will shrink. So companies will have to rethink business strategies, and get new partners. WTO may lose a lot of punch.
• Consensus goes, Bilateralism arrives: The consensus-driven approach forged post second world war will be replaced by a bilateral trade treaty driven system. Punitive sanctions will rule.
• Asia at the heart of it: Since China's dream of global trade stardom goes through the maritime trading routes, the battle will be fought here. The APEC summit proved it. There's one chance to pull back from it - the G20 summit, Argentina, 2018.
• Summary - The deterioration in China-US relations was visible at the APEC summit, and if some common ground is not identified soon, the world trade order may be irreversibly damaged.

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