Trade
Is post-election Myanmar moving closer to China?
Author: Enze Han, HKU
Amid the worsening domestic COVID-19 situation, Myanmar’s election in November 2020 brought a landslide victory for the National League for Democracy (NLD) under the leadership of Aung San Suu Kyi. Despite voting restrictions in parts of Rakhine and Shan states, the election was overall a step in the right direction, and the NLD increased its majority in the Pyithu Hluttaw (lower house) and Amyotha Hluttaw (upper house).
The show of support at the ballot box for the NLD indicates the domestic popularity of Aung San Suu Kyi. Her defence of Myanmar’s handling of the Rohingya crisis at the International Court of Justice — and in many other international venues — was dubbed a betrayal of democracy and human rights by Western media, but it boosted her domestic aura as a defender of Myanmar.
The priorities for the NLD government are no doubt domestic. The COVID-19 pandemic ransacked Myanmar’s economy and the domestic poverty rate skyrocketed. High on the government’s agenda is creating employment for millions of Myanmar workers who lost their jobs during the pandemic.
The country still faces one of the worst humanitarian crises with the Rohingya issue which battered its international image and led to economic sanctions. Myanmar’s domestic peace process has also stalled and militarised conflicts in the north of the country have no end in sight.
To deal with these issues, China is the most indispensable country for Aung San Suu Kyi and her government. As one of the manufacturers of COVID-19 vaccines and with a promise to contribute to the accessibility and affordability of vaccines in developing countries, Myanmar needs to work with China to vaccinate its population. Vaccine diplomacy was high on the agenda during a visit by Chinese Foreign Minister Wang Yi to Myanmar in early January 2021, despite Naypyidaw making the first order of 30 million doses from India.
As the largest trading partner and second largest FDI source for Myanmar, the continued economic growth and opening up of the Chinese market will also have positive reverberations. Although Myanmar society overall holds anti-Chinese sentiments, Aung San Suu Kyi’s government still sees the benefits of engaging in close economic cooperation with China. Initiatives such as the China–Myanmar Economic Corridor aim to further connect the two economies.
With the recent signing of the Regional Comprehensive Economic Partnership (RCEP), Myanmar is also set to benefit from further relaxing of trade restrictions among its major trading partners. The government is optimistic that participating in RCEP will help Myanmar gain access to a large market for its exports, and that there will also be opportunities for responsible, high-quality investment inflows.
While Myanmar faces tremendous pressure from the West on the Rohingya issue, Myanmar’s Asian neighbours are hesitant to jump on the bandwagon. Only Malaysia and Indonesia — as the two Muslim-majority countries in ASEAN — have been more vocal.
China is Myanmar’s strongest supporter on the Rohingya issue and is actively involved in facilitating negotiations between the governments of Myanmar and Bangladesh. The protection China offers to Myanmar at international institutions is crucial. A quid pro quo is evident between the two countries with Myanmar offering support for China at the United Nations on Xinjiang and Hong Kong. This cooperative relationship will likely continue as both face similar pressure from the West.
More importantly, Myanmar’s domestic peace negotiations with a number of ethnic armed organisations (EAOs) has also stalled. At the Fourth Union Peace Conference in August 2020, six prominent EAOs did not attend the meeting, partly due to a lack of pressure from China. Given China’s close historical ties with these EAOs, Myanmar needs to make sure China sees the value in facilitating dialogue between them and the central government.
Beijing needs to be aware of a possible public opinion backlash within Myanmar towards China’s close relations with these EAOs and ultimately push for a peaceful settlement. At the same time, by participating in China’s Belt and Road Initiative, Myanmar intends to convince China that peace along the bilateral borderland area will bring benefits for China as well.
Myanmar’s relationship with the West — particularly the United States — might not improve any time soon. The Rohingya issue significantly soured Naypyidaw’s relationship with Washington and tarnished domestic goodwill within Myanmar towards the…
Trade
Self-Reliance and Openness: Core Principles of China’s Third Plenary Session
The Third Plenum communique from the CCP indicates a prioritization of stability and compromise in response to China’s economic challenges. It highlights the concept of Chinese-style modernization and establishes political guidelines for balancing regulation and market forces.
The CCP’s Third Plenum communique signals a focus on stability and compromise in the face of China’s economic challenges. It emphasises Chinese-style modernisation and sets political directions for balancing regulation and market forces. While not as groundbreaking as previous plenums, it acknowledges the importance of market mechanisms and technological self-reliance, aiming to address issues like high youth unemployment and private sector uncertainty. The communique seeks to navigate the complexities of global competition and domestic innovation, potentially reshaping global supply chains and trade dynamics. Overall, it presents a pragmatic blueprint for China’s economic future.
Source : Self-reliance and openness central pillars of China’s Third Plenum | East Asia Forum
Trade
Trade Prevails Over Political Persuasions in China-Germany Relations
China and Germany maintain a strong bilateral relationship, rooted in economic cooperation despite ideological differences. Recent visits and agreements focus on expanding trade and addressing mutual concerns, navigating challenges while nurturing ties.
Evolving Bilateral Ties
China and Germany share a strong bilateral relationship, rooted in history since 1972. This connection has seen moments of cooperation intertwined with periods of tension. German Chancellor Olaf Scholz’s April 2024 visit underscores Germany’s commitment to fostering this partnership, reflecting a mutual interest in maintaining economic ties despite ideological differences.
Economic Pragmatism
As the second and third largest global economies, China and Germany’s economic interdependence is crucial. Germany emerged as China’s primary trading partner in 2023, with trade values reaching €254.4 billion (US$280 billion). In response to global scrutiny, Germany has taken a balanced approach, emphasizing economic stability over political discord. This was evident during Scholz’s prior visit in November 2022, where his diplomatic tone contrasted with broader EU sentiments.
Facing Challenges Together
Despite increasing public skepticism in Germany regarding China’s global influence and human rights issues, both nations continue to seek common ground. Their October 2023 Joint Statement highlights intentions to pursue cooperation in areas like carbon neutrality and open markets. To navigate these complex terrains, Germany can utilize its institutional frameworks to enhance dialogue, while also considering supply chain diversification to reduce dependency on China. The intertwining nature of their economies suggests that, despite challenges, both countries will continue to prioritize their substantial trade relations.
Source : Trade trumps political persuasions in China–Germany relations
Trade
Fixing fragmentation in the settlement of international trade disputes
Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.
Fragmentation in Global Trade
Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.
Challenges with WTO Dispute Settlement
The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.
The Path Forward for Global Trade
Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.
Source : Fixing fragmentation in the settlement of international trade disputes
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