Panel: Will China stabilize global trade?
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Hello and welcome to the panel discussion of World Today. I'm Ding Hen in Beijing. U.S. President Donald Trump's sweeping tariffs and tariff threats are inflicting significant disruptions on international trade, putting global growth at risk.

Allianz Global Investors, a global investment management firm, has warned that Trump's Liberation Day announcement will shave at least 1% of global economic output, and the further escalation of the trade conflict would raise the risk of a global recession. China is the central target of Trump's tariff war.

Faced with U.S. tariffs, the Chinese government has delivered a message that China stands firm against unilateral bullying practices, and China remains a strong supporter of trade liberalization. So, amid turbulence caused by Trump's trade war, to what extent can China help maintain stability in global trade system? This question and much more in this edition of the program.

To listen to this episode again or to catch up on previous episodes, you can download our podcast by searching World Today.

So joining us now on the line are Peter Chang, former deputy director of the Institute of China Studies, University of Malaya, and a research associate with Malaysia-China Friendship Association, Dr. Frank Liu, associate professor from the Business School of the University of Western Australia, and Ina Tengen, senior fellow, West Taihe Institute.

So thank you very much for joining us today, gentlemen. Ina, to start with you, Singaporean Prime Minister Lawrence Wan has said that Donald Trump's Liberation Day announcement, quote, marks a seismic change in the global order. The era of rule-based globalization and free trade is over. We are entering a new phase, one that is more arbitrary, protectionist and dangerous, unquote.

So do you think we are seeing the beginning of the end of globalization or would you say that somehow we're witnessing an entry into a transition towards an era of globalization minus the United States?

Well, yeah, I mean, there's two logical paths. One is, and especially if you're talking about Singapore, they have prospered based on globalization. So for them, if the United States doesn't want to play nicely, the best thing would for everybody else is to have three quarters of the 166 members of the WTO vote to, in essence, ask, not ask, but tell the U.S. they have to leave.

At that point, there could be some real reforms to WTO. They can address a number of issues. It'll be difficult because of the US position in the world, but it will go on and globalization will be there. Now remember, Donald Trump is not forever.

And at some point, it's quite probable that the next administration is going to be quite different, and they'll probably want to re-engage in the world. At that point, it makes a lot of sense to do the WTO move now, because the rest of the world can then

not have the U.S. breathing down their neck and things like that. So that makes a lot of sense from that. Barring that, if that doesn't happen, then I think you're going to see a lot more regionalization, RCEP, Belt and Road. Those who are willing to trade with each other will get together and say, look, we have to figure this out ourselves on a regional basis, and then perhaps region to region having some sort of things. It's awkward, but

those are really the only two choices at this point, other than just throwing in the towel and saying, you know, America wins and we'll just be spokes in

in the wheel that moves the hub of America. Frank, going to you, what do you make of China's possible role in the current international trade situation? I'm asking this question because some people say the U.S. and China are nowadays in direct competition with each other in terms of shaping or reshaping the international trade order. What is your take regarding this?

There is no question that China and the US are competing to shape the future of global trade, but I think they are doing so in very different ways. So the US, especially under leaders like Trump, has taken a unilateral approach, imposing tariffs, bypassing multilateral institutions and using pressure to redraw the trade landscape. In contrast, China is leaning to multilateralism, investing in regional trade blocs like RCEP and expanding the Belt and Road Initiative and promoting economic integration.

As an academic based in Australia, I see how this competition affects countries like mine, where I'm staying, and we value open markets and stable rules. But when the US disregards the other WTO or pushes for decoupling, it creates uncertainty for middle powers. Since China's approach focused on infrastructure, connectivity, and inclusive development, I think offers a more constructive way forward. It's not just about trade flows, but about building long-term partnerships and supporting shared growth.

So if the US continues down on the competitive path, it risks isolating itself while China's collaborative model may gain more traction. So in this context of influence, China is positioning itself as a stabilizer, working within the global trade system rather than trying to rewrite it unilaterally. And for economies like Australia, this stability is both welcome and essential.

So, by the way, since you have talked about Australia, do you think in the current situation, Australia will somehow need to pay more attention or attach greater importance to its ties, especially economic ties with China?

Yes, absolutely. You know, because, you know, we're based in Western Australia and our iron ore exports to China directly supported thousands of jobs here because China used this oil to produce steel and other intermediate products for global manufacturing. So it is important that, you know, being in Australia, we should watch the development very closely.

Peter, going to you, at a time when the world's biggest economy is arguably behaving irresponsibly in terms of trade and economic issues,

Does that mean the world's second biggest economy, namely China, has no other choice but to take greater responsibility in terms of moving to protect the spirits of free trade and globalization, etc.? Why or why not?

Absolutely. I think China, by default, whether by choice or by design, has to step in because a lot is at stake for China's own sake. China is so integrated to the global economy right now. And when it is being disrupted, as it is being done, a lot is at stake for China. Also, China has also become so much a

part of the global sub-economy. And so China needs to step in not only for its own sake, but also for the sake of the greater global economy, economic system. If I may just come back to the first question that you asked, whether we are going through this globalization, end of globalization, I will answer that it is both yes and no.

We are coming to the end of this globalization that was led by the United States, but we are moving into this next phase of globalization, which is connected to the question that you asked me, probably going to be led by China itself. I think a lot of us right now, certainly in the global south, in Southeast Asia, are looking for a more stable,

reliable and consistent kind of leadership. And across the horizon, we see no one else but China that could step in to provide that leadership.

So I say it's absolutely critical that China steps in, not only for its own good, but also for the good of the global South. So Frank, it's pretty interesting to note here that against the backdrop of China's ongoing countermeasures taken in response to President Donald Trump's tariffs,

um china's commerce ministry recently actually held a specific roundtable meeting with american business representatives based here in china and a key message of that roundtable meeting is that china continues to welcome and support foreign investors including those from america in your understanding

Do you think Donald Trump's tariffs is going to prompt a shift or a change in terms of China's policy to build itself as an open economy?

I don't think so. Well, despite the U.S. escalating tariffs, China has shown no signs of retreating from its path of opening up. In fact, my opinion is that Trump's tariffs push may have strengthened China's resolve to present itself as a champion of open market, offering a clear contrast to U.S. protectionism. So recent actions back this up.

China, as you just mentioned, the China's commerce ministry has met with American business leaders to reaffirm that U.S. investors remain welcome. And this sends a very strong signal that China values its role in a global economy and is keen to keep capital flowing.

At the same time, Beijing continues to push ahead with reforms such as expanding free trade zones and steadily reducing restrictions on foreign investments. So from where I sit in Australia, I see that the major Australian firms from mining to banking are still actively deepening their engagement with China.

That's because China remains an essential, if not the largest, one of the largest market. And its gradual liberalization continues to create new opportunities. So while Washington turns inward, I think China's response has been to open wider. It's a stabilizing move.

and rather than withdrawing, Beijing is working to maintain its trust in its economy, support supply chains and strengthen its appeal to global investors. And that's just not smart policy. It's a clear signal of long-term commitment to global trade at a time when consistency and openness are so badly needed.

But Ina, in terms of American multinational corporations who want to continue to do business here in China or to expand their footprints here in China, do you think there is a contradiction between Beijing moving to respond to Donald Trump's tariffs and maintaining the confidence of U.S. investors in China?

Well, I'm afraid that you can't make an omelet without breaking eggs in this particular case. The US multinationals are very powerful in their own right, and they have, in fact, weighed in. They were part of the reason that Donald Trump called his bluff off.

But quite frankly, China doesn't have a choice. When you have a bully that's out there trying to rearrange the world around some sort of feudal system with the United States at the center and all other countries basically giving everything they have to the United States, China doesn't want to be part of that. They're not going to be bullied. A hundred years of humiliation still stands out in people's minds.

They do not want to be, you know, in essence dominated by a colonial power, the United States. And so there's no going back. I mean, emotionally, there's no going back ideologically. And of course, economically, for everything, the reasons that Frank and Peter have pointed out, there's no point in China moving backwards. It has the majority of the world.

Think about it. Obviously, Donald Trump doesn't read the art of war. You don't attack 180 countries, some of whom are your closest allies and neighbors at the same time. If you wanted to draw a bullseye on China, there were different ways to do that. It would have been much better to engage. But even if that is your goal, the way he went about it has completely alienated

world and created an opportunity for China. I always joke that, you know, when history is reviewing what has happened, they're going to say that Donald Trump was the greatest gift to China that any president has made since the beginning of the WTO. I mean, he has done what China could never hope to do, which is alienate American friends and allies.

Peter, would you agree in this point that somehow Trump's, especially his trade policy or his foreign policy, represents an opportunity in China in economic or trade sense? Yeah, absolutely. I think it is a self-goal, I think, to use a football analogy if you are competing with China, with the kind of strategy that he has sort of unleashed upon the rest of the world.

The Singaporeans traditionally have been very circumspectful and measured in their tone. But by the way, the manner in which the Prime Minister Lawrence Wong came out to voice the country's concern is really a signal that for pretty much the rest of the world, and ASEAN in Southeast Asia, this is really a shock to the system. And it's pretty bad.

not only for America, for much of the world has depended on the pre-existing international order. So this is pretty much a self-harm and self-goal on the part of Americans. And it's created an opening that the Chinese did not really ask for, but should really take

to seize the moment and step in and to bring some stability into the order. I think this is, as Aina was saying earlier on, a really rare opportunity for us to reform the WTO, to level the playing field, so that countries in the developing world and the global south will get a fair share of hearing through the WTO.

Actually, Peter, over the past month or so, we saw China holding economic dialogues with Japan and South Korea. There is a trilateral platform in terms of trying to reach a trilateral FTA, as well as economic dialogues between China and the European Union.

So do you think Trump's aggressive trade policy will somehow compel other countries or other economies to try to form stronger trade clubs among themselves?

Absolutely. I mean, the Japan and South Korea and China sort of coordinated response to what they saw was impending economic crisis was really a wake-up sign to the rest of us. For us in the Southeast Asia that was watching how the other Asian powers are reacting to these changes,

President Xi is going to visit Southeast Asia, Vietnam, then my country Malaysia, and then Cambodia. We are expecting a similar kind of signaling and

and messaging coming out that China and ASEAN will also form a similar sort of coordinated response to the current crisis that we are facing. And next month, as the chair of ASEAN Malaysia is hosting the inaugural ASEAN Plus

Gulf Cooperation Council of the Middle East plus China to again to strengthen our regional three different regions cooperation economic development you see all these pieces coming together different regions blocks are working together trying to strengthen our cooperation and also

in some ways, at the backdrop to mitigate the kind of instability that has been unleashed by the Trump administration. So, Ina, if we are talking about a scenario where Donald Trump's trade policy will prompt other economies to try to form stronger trade clubs among themselves, what do you make of China's role during this process?

Well, I think there is more than just economics at stake here. I mean, the post-World War order was based on this idea, you know, the G7. We who have done well, we should tell everybody else what to do. I think that's gotten very old. If China comes in, I think it's going to be based on resetting the principles upon which the globe works.

and the economics as part of that. And what I mean is not that China says ideologically you got to follow us, but these three principles. Every nation needs to be secure. Every nation needs to have a path to improve the lot of its people, development. And finally, each nation has to be respected as a sovereign entity that will make its own decisions. They will not be dictated to.

There might be problems internally, but it is not the role of the rest of the world to make judgments run in there and cause more trouble. We've seen that. It hasn't worked. Everywhere that the U.S. has put its nose in has just resulted in more conflict, death, destruction. It doesn't work. So I really do believe that the WTO could be the beginning of

of a consensus that is global, that says these are the three principles that we will operate under. And in that line, we will develop the economic fairness that will, in fact, encompass and hear the voices of the global South, because they were not heard during the post-World War II planning. They were completely ignored.

They just said, oh, these little children, they can't be trusted with big things. This will be up to the large powers to decide the fate of the world, this kind of Yalta idea.

So I think China can be instrumental in saying that this is what should be on the table. And I can almost guarantee you that there'll be a vast majority of voices will say it is high time that we start thinking about a multipolar world and making sure that it goes according to principles, not chaos. Because right now, with the law of the jungle,

All you'll get is this real politic, what's in my interest type of idea, which would prevent global growth. And we've seen that. We don't need to have long debates about it. One country taking things from another country, whether it's Greenland, Canada, Gaza, or the Panama Canal, that is not civilization. That is just simple empires expanding at the expense of others. Mm-hmm.

So Frank, more specifically, if we take a look at what's going on between, say, China and the European Union, the value of Chinese exports to all 27 EU member countries are actually nowadays on par with the value of Chinese shipments to the United States.

But in the meantime, we also don't deny that there were also some trade disputes between Beijing and Brussels. Last year, a high profile case was of course over the electric vehicles.

So do you think the two sides can resolve or at least put away their own disputes for the time being now with each other to try to jointly champion the spirit of trade multilateralism and trade liberalization?

While clearly China and the EU have their differences on market access, on subsidies or industrial policy, they also have every reason to manage those frictions constructively. So, you know, China's export to the EU now rivals those to the US, and many European firms rely heavily on the Chinese market for growth. That level of interdependence creates a strong incentive to keep trade flowing.

And we're already seeing signs of cooperation. Talks have resumed around a comprehensive agreement on investment, and both sides have aligned in opposing the US blockage of the WTO appellate system. These are practical steps that show Beijing and Brussels are capable of finding common ground when the multilateral system is under pressure.

And again, from an Australian perspective, we welcome this because a stable rule-based global trade order depends on large economies like China and the EU showing that competition doesn't have to lead to conflict.

While individual disputes will continue, in my opinion, the bigger picture is one of mutual interest. And if they can jointly lead on areas like WTO reform and green trade, the benefits will be global. Peter, talking about the situation here in the Asia-Pacific region, we know it's been more than three years since the Regional Comprehensive Economic Partnership, or RCEP, came into force.

According to the analysis by the Asian Development Bank, ADB is expecting RCEP to add 245 billion US dollars annually to regional income and 2.8 million drops to regional employment by the year 2030. And by the way, 245 billion US dollars is quite close to the size of New Zealand's economy in 2023.

So what do you make of China's role in terms of advancing regional trade and cooperation within the RCEP's bigger framework? I think the RCEP is one of the success stories of how countries come together to want to help each other promote trade, encourage free open market trade.

And it's good that RCEP has recorded the success that it has in the past three years. And as Aina and Frank had said earlier, we must continue to do what we have done correctly. And this is what we should continue to promote, to strengthen the trade within RCEP.

I think in the face of the crisis that we are facing right now, for us in Southeast Asia, one of the talks that we've been heard a lot is we've got to increase our intra-regional trade within the ASEAN countries.

and RCEP is one of those mechanisms. The broader picture, the conversation that we have had is that we also almost to borrow the Chinese model, that we need to have our own version of the dual circulation. By that we mean RCEP has always been a trading region that we trade with partners outside of the region. We trade with Europe, China, the Pacific, Africa.

But we also right now have to come through this moment, where we need to have our own dual circulation sort of moment to strengthen our own internal market and strengthen our consumption ability, and then so that we can boost our own domestic economy. And on that score, I think China could help us to play an important role. China has been critical in driving our SEP,

and China could continue to play a critical role in helping ASEAN not only need to do extra regional trade, but also to help boost a trade within ASEAN itself. Your point is well taken. Let's take a very short break here, and coming back, our discussion will continue. Stay tuned. You are back with World Today. I'm Ding Han in Beijing.

Today we are talking about why China is a stabilizing force for international trade order when the US government is acting irresponsibly.

Joining our panel, Peter Chang, former deputy director of the Institute of China Studies, University of Malaya, and research associate with Malaysia-China Friendship Association. Frank Liu, associate professor from the business school with the University of Western Australia. And Ina Tengen, senior fellow with Taihe Institute.

So, Frank, going back to you, before we took the break, we were talking about RCEP. And in addition to RCEP, we understand another Asia-Pacific trade agreement that has existed for a longer time than RCEP is actually the CPTPP.

It was rebranded from the TPP following the withdrawal of Washington under the first term in office by U.S. President Donald Trump back in the year in 2017. Now, actually, China is now involved in negotiations to try to join the CPTPP as well. What do you think is motivating China to do so?

I think China's push to join the CPTPP reflects both strategic and economic motivations. With the US having stepped away from the pact, China sees an opportunity not just to access a high standard trade framework, but to help shape it, have a voice in it. So by applying, China is signalling its willingness to align with CPTPP rules in areas like digital trade, IP protection, labour and environmental standards. That's a significant step, especially given how advanced these commitments are.

And also part of the motivation is domestic, using external agreements to support ongoing reforms. But there was also a clear economic logic. So if China were to join, the CPTPP market size would expand dramatically, benefiting existing members like Australia through smoother trade flows and more integrated value chains. And for Australian exporters, this could mean even better access to China under common rule-based conditions.

And there is also a geopolitical angle. With the US still being absent, China's entry could fill a regional leadership vacuum and help ensure the CPTPP doesn't evolve into a bloc that sidelines China. I understand that some members have concerns about whether China can fully meet the standards, but if Beijing shows a seriousness, say through reforms in SOEs or data policies, its participation could be transformative. So in short, I think China's CPTPP

It is about more than market access. It's about integrating more deeply with the region, committing to share rules and reinforcing Asia Pacific cooperation at a time when leadership in this area in trade is solely needed.

So more specifically, Peter Chang, if we're talking about a scenario in which China became a CPTPP member, ultimately, what would that bring to CPTPP and the regional cooperation?

To add on to what Frank has said, it's strategic and it's economic, but it still fits in with China's broader vision. I mean, China's Belt and Road Initiative, for example, has already arrived at Latin America. China's economic footprint is already in presence in Peru, for example, Mexico and Bolivia. So I think it's just natural that China would fit in

quite nicely into the CPTPP. It could strengthen the ties between the Pacific countries, Pacific Rim countries. We already are connected.

Malaysia is part of that, but if China comes right in, it will really bring in a much more broader and much stronger connection, I think. So, Aina, from the implementation of CPTPP in late 2018, I guess, and then the implementation of RCEP more than three years ago, do

Do you think these developments tell us that somehow if we are talking about a mission to try to pursue free trade, this mission can be done without the participation of the United States? Namely, the U.S. is not an indispensable power in this regard. Do you think we can somehow draw a conclusion in this regard?

It's not indispensable, but it certainly is. It would be very inconvenient. The role of the U.S. dollar, the amount of consumption that the U.S. is part of. These are very hard to ignore. I mean, the U.S. also is a leading contender in technology. They have a lot of patents, especially when it comes to pharma and things like that. So, yes, but you cannot deal with somebody who doesn't want to deal with you.

So at some point, you know, the rest of the world has to make a decision. Let's move on.

And it's not forever. As I keep saying, if these changes were brought about, what would happen? Well, you create a new norm. And at some point, leadership in the US is saying, look, our economic bread is buttered by the rest of the world. We can't live alone. It's time to get rational and reasonable. But let's take the TPP, as it was originally called, and then it was kind of morphed into the other thing. What happened? The

The U.S. had inserted about 19 provisions which are specifically aimed at its own interests. It said tobacco companies should be free to advertise their product anywhere they want. Any action against them would be, in essence, ruled over by a body controlled by the U.S. They had provisions in there for technology, all sorts of things, which were there to protect

the American status quo. So when it became CPTPP, guess what? All those provisions were out, provisions were out. And people said, no, we're going to go forward on a reasonable basis where it is not just about one entity's interest. It is about a collective interest. And that's why I really think that the opportunity with the WTO is there because you can reform the WTO,

And you can do it so that it is everyone's interest, that it's really multipolar, multilateral. So there are real important aspects to this that go beyond just reacting to what Donald Trump is doing. Remember, the problems with WTO began with Obama. He refused to allow any judges

to be seated unless they were American judges. He said, look, I want all American judges there. And the U.S. does not submit to any power higher than itself. So this was a statement in Enix. The rest of the world has this golden opportunity. I hope they take it. Hmm.

Now, in terms of the Belt and Road Initiative, Frank, we know traditionally we saw a picture in which global South countries, for example, they primarily exported their raw materials such as minerals and other kinds of natural resources to the Western economies and then used those foreign exchanges, primarily, I guess, US dollars that they earned in that way

to buy and import manufactured goods from the western countries

Some people say that China proposed the Belt and Road Initiative is shifting this dynamic. Do you agree with this point? And in the current situation where the rest of the world is faced with the tariffs or the threat of tariffs from the US, from Trump administration, do you see the Belt and Road Initiative as a stabilizing factor in terms of global trade?

Yes, certainly I do. And echoing to Peter's point earlier, I think the Belt and Road Initiative is undeniably reshaping traditional trade patterns, particularly across the global South. In the past, many developing nations were locked into exporting raw materials to the West and importing back higher value finished goods. What BRI is doing here is helping to break the circle by investing in infrastructure like ports, railways, and industrial zones, is enabling countries to move up the value chain.

And we are seeing real results. Countries like Vietnam and Bangladesh, often in partnership with China, are now exporting more complex goods, textiles, electronics, just two examples, rather than just raw resources. In Africa, new BRI-funded transport corridors allow countries to process and trade more regionally, creating growth opportunities beyond the traditional north-south axis.

And in the current environment of rising US tariffs, BRI is also providing alternative routes and markets. A good example is China shifting its soybean imports to Brazil during the last, which was the first, US-China trade war, giving Brazil's economy a major boost. That's a stabilizing effect.

And again, from Australia's vintage point, while we are not a BRI member, we still benefit from the connectivity and demand it generates across Asia and Africa. It creates new export markets and supports a more resilient global trade system, one that is more diverse and less exposed to the unilateral actions of any single country. So, Ina, I guess when we talk about the Belt and Road Initiative, over all these years, we have heard and seen

way too many analysis pointing to how this initiative is reshaping international trade order with an underlying message that somehow the BLI is a disruptor to international trade. What is your take on this? Oh, that's nonsense. I mean, the debt trap diplomacy that, you know, something bad is happening here. This was just voiced as a narrative by the West because they weren't doing anything.

They ignored South America, they ignored Africa, were causing trouble in the Middle East. I mean, come on, nothing good was happening. And exactly as Frank was pointing out, you had a situation where they were being taken advantage of. They were made to export raw materials and then they had to buy whatever goods they had. They had to get their loans from the United States. The real debt trap diplomacy happened.

was always in the West. They come in and they tell you how do you run your country if you wanted money, because you couldn't afford to develop your country. Now, if you look at the Belt and Road Initiative, last 10 years, trillion dollars invested, all of a sudden you start to see a pattern, very clear pattern, that the development in these developing countries is now above those of the developed countries.

And quite frankly, this is what Washington is afraid of. They say, oh, we're being eclipsed. These countries, even though they're developing and sometimes they don't have enough food to feed their people, well, they've victimized the poor American society. I don't know how, but, you know, Donald Trump is very strong into this narrative that America has been taken advantage of. He's repeated that, I don't know how many times, just in the last two months.

It's his rationale for everything. We've been ripped off. All right. We've been taken advantage of. It's not going to happen anymore. I don't want even. I want more.

For what? To be paid back. I mean, this is the most powerful, richest nation on earth. And it's claiming that it's been victimized by people who don't have, and countries, who don't have enough. So please, I hope people will examine the narrative. There are plenty of pieces out there which have completely debunked these ideas. But yet they continue in the popular press as if they are fact.

Hmm. Adding one thing to what you have elaborated, I know there's some U.S. netizens saying on Twitter or Facebook that somehow we don't want to make Nike shoes domestically in America. We just want to wear Nike shoes. That's the point. So, Peter, I

We understand trade flows in intermediate goods like parts or semi-finished products are usually serving as a key indicator with regard to how much a country or an economy is involved in international supply chains. And in the case of the Chinese economy, in the early 1990s, China accounted for 3.3% of global trade in intermediate goods.

By 2022, that proportion had climbed to more than 15%. So if Chinese government is able to maintain a predictable and consistent trade policy, how much do you think this could help offset the possible disruptions that Donald Trump's tariffs might cause to global supply chains?

Dean, before I answer this question, can I add a few points to what Frank and Aina said about the BRI? Sure, sure, sure. I just want to say Malaysia is the ground zero, the launch pad of the BRI. And we have seen with our own very eyes, it's empirical, we experience it. It has generated enormous benefit to the country and also to the wider region. The debt trap diplomacy, as Aina says, is really nonsense.

Let me just add on a point that Frank has built on already. The BRI here in Malaysia has transformed beyond just bricks and mortar, infrastructure, highway ports and trains. It has transformed into digital BRI, green sustainable BRI, health silver, education BRI. It is absolutely game-changing. It is helping countries like us to move up the value chain.

to embrace the Industrial Revolution 4.0, the move towards a knowledge-based economy. So I would just say that the BRI is truly historic and it has meant a lot for the Global South and I think it's continued. The story has not ended yet. It has a lot of legs. It will go on to change, an enormous change in our part of the world.

Coming back to the question on the intermediate goods, I just want to say, maybe just give two keywords here. It's China's role in this supply chain in providing intermediate goods is that China has proven itself to be

a reliable and consistent partner. And ASEAN countries in Southeast Asia has always found connected to the Chinese supply chains has proven to be beneficial to us, helps us boost our manufacturing and our economy as a whole, and also enable us to export beyond just commodities and minerals, but

high-end products beyond just textiles and shoes in Malaysia, we are moving towards providing exporting solar panels and advanced chips as well. So China has played a crucial part in Malaysia and Southeast Asian countries in moving up the value chain.

Frank, nowadays imports and exports in intermediate goods account for over 60% of China's foreign trade.

So how would you evaluate the industrial development opportunities and employment opportunities in other countries, in other economies, either upstream or downstream, that are somehow directly or indirectly supported by China's trade, especially China's trade in intermediate goods?

Well, as you just said, over 60% of China's foreign trade involves intermediate inputs, which means imports raw materials and components and exports semi-finished goods that fit into the global supply chains. So upstream, this creates massive demand in supply countries. Again, take Australia, for example. Our iron ore exports to China directly support thousands of jobs here, if not hundreds of thousands of jobs in Western Australia, because China uses that core to export

to use that oil to produce steel, which is very important to media input for global manufacturing. And similar stories play out in places like whose electronic sector of Chile with its copper industry rely on sustained Chinese demand.

And in the downstream, China's affordable and reliable components power factories around the world. Chinese-made auto parts feed car plants in Thailand, Mexico and beyond, helping those countries build competitive manufacturing sectors and skilled job sets. And while we're seeing this as a ripple effect, China's role at the centre of these supply chains drives employment growth both upstream and downstream. And as an academic, I would call this a largely positive

science. Many economies in Asia have climbed the development ladder by linking to those new networks. And while interdependence brings shared vulnerability on balance, China's scale and consistency have made it a cornerstone of global manufacturing, from Australia mine to Southeast Asian assembly lines.

So, Ina, to what extent do you think China can manage to stabilize the existing global supply chains against the backdrop of Donald Trump's tariffs?

Judging from his tariffs against the countries like Cambodia and Vietnam, his administration really appears to be leaving multinational corporations with nowhere to hide as long as they want to ship their products to America as the final step.

Okay, so let's break this down. China cannot replace the demand that the US currently has. That is going to be lost, but you can't do anything about that. If the US doesn't want to trade with you, they're not going to trade with you. That's up to the current administration. That will change in the future, but what do you do in the meantime? This is, once again, I'm returning to the WTO. I know you might think I'm beating a dead horse, but this is the opportunity.

to have countries come together and say, look, we're not getting any cooperation from this rogue nation called the United States.

Washington doesn't seem to care or even be logical about this thing when you're taxing penguins. You kind of have to wonder what's going on. So this is the time to do it, to say, look, let the U.S. do whatever it's going to do because we can't stop them. It's an independent, sovereign nation, very powerful. Let's amongst ourselves figure out how we can do this better.

And that means working more on RCEP and also TPP. But let's push it up one more level to the WTO. I mean, Washington would become very, very, very concerned.

If it was clear that the rest of the nations were just, you know, you only need three quarters of 166 to say, look, the United States, you are a rogue nation. You're preventing the WTO from functioning. You have gone beyond WTO norms. You don't seem to care about it. So at this point, you should leave.

Then the rest of the nations can come together and Europe can take a very strong position. So can everybody. But hopefully it will be a system where places like Cambodia can be heard because Cambodia has never been heard at the WTO in any substantive form. It was never participating in its creation. Now is the time for the world to change for the better. And then later on, after

After the world has settled on a fair formula that allows everybody to develop, not just be some part of some grand American dream.

Then in the future, the US can choose to join or not join. That's up to them. By the way, Frank, what do you think has made China profoundly integrated with the global supply chains? Some people say gone are the days when China's industries were dependent on cheap labor. So if that is the case,

What do you think are the strengths of China today in terms of its participation, its involvement in international supply chains? Well, I would say yes, low-cost labor helped attract factories decades ago. But today, China's real strength lies in a far more advanced and integrated system. And one key factor that I think we all agree is its infrastructure. China's ports, logistics networks, and transport systems are world-class.

making it incredibly efficient to move goods in and out here to there. That reliability is a major reason companies continue to build supply chains around China. Then there is this industrial ecosystem in China. You can find every link of the production chain, basic components, advanced electronics, precision manufacturing, all clustered in one place. That kind of scale integration is extremely difficult to replicate elsewhere.

And China also now boasts a large pool of skilled engineers and STEM graduates, which supports high-quality innovative manufacturing. And add to that its massive domestic market. Many companies integrate with China's supply chain, not just to export, but to sell to Chinese consumers too.

And from where I sit in Australia, Western Australia, I have also observed how government support has helped Chinese firms move up the value chain. So while labor costs have gone up, companies stay in China because the full package that is offering efficient infrastructure, industrial depth, talent and market access. That's unmatched. China isn't just a cheap workshop anymore. It's a strategic hub for global production.

Now, some people worry that in an international trade system where the US will isolate itself due to its own policy and China will have a bigger say than it does currently, China will likely embark on dumping goods internationally or increasing subsidies to help Chinese companies win foreign contracts. Is this a legitimate concern in your opinion, Peter?

Yes, to some extent. Let me give the context. First, China and the Chinese in general are very competitive. They compete among themselves and it's very fierce competition. Only the fittest can survive it. And when the Chinese come abroad, for example, to Southeast Asia, not all of us can compete.

with China and some of us will probably be left on the wayside. And when that happens, it's a little bit difficult. So I think when it comes to in the context of when China commands and centralizes the supply chain, global satire exchange,

around China. China needs to be sensitive to the fact that competition is good, but sometimes there needs to be room for those who can't really compete on the same level. I think the notion of the socialism with Chinese characteristics that has been much made about within China itself and China's leadership themselves want to make sure that everyone within China has

a share to the pie. Likewise, when China steps out, China probably wants to pursue something along those lines. Globalization slash socialization with Chinese characteristics makes sure that everybody has really a real tangible win-win position. There is some concern among smaller countries that we may not be able to compete with the Chinese juggernaut. So there may be a need where

we have to set aside profit margin is not so determinant that we should reach some kind of agreements for the greater good out of political necessity. So I think moving forward as China plays a more important role, concerns of smaller countries like us,

need to be taken into consideration to make sure that socialism with Chinese characteristics is also experienced in our part of the world.

So, Ina, what do you have to say about this concern or these concerns that we mentioned earlier? And in a bigger picture sense, what do you make of the ultimate reason regarding why China represents a strong supporter of globalization at the moment?

Because for quite some time, the United States had been a strong advocate of globalization, but now there has been an absolute U-turn in terms of Washington's policy direction. In the case of China, do you think China's support for a globalized economy will be sustainable over the long term?

Yeah, I do. But I think there's something that people are missing here. And that is we tend to look at the past and try to measure the future. And the fact is that we have a need, a new economic driver for the world. One, that addresses Peter's concern about competition, that just merely because you're larger, you have more money, that you're always going to win. And I think it is out there.

The largest economic force that remains untapped between countries, and that is the most vital part of every country, are small and medium-sized business entities. Think about it. In China, 60% of tax revenues, 50% of GDP, 80% plus of existing employments, and about 90% of new employments.

That is a powerful force. And these entities are very, very nimble. They move among opportunities. I see a world where you expand these opportunities to everybody globally and they have a chance to compete. And I think with digitalization, this has the new key to this development. And what do I mean by that?

Well, you mentioned China has provided logistics, and now these logistics span the globe. And you have payment platforms where you can actually get paid. But how to connect up consumers and other businesses to each other? In the past, it's been very difficult because of the banking system. But today you have things that are developing like smart contracts. That means that somebody in Africa could...

reach a deal with somebody in Malaysia, a small entity, say, we need this. And then you have AI provides a secondary opportunity that even though it's a small contract, it can be policed by

by agents. These are artificial intelligence agents. They make sure that the guy who says, "I'm going to provide you widgets," he actually has bought the goods, has the factory, has people who can make them, and is on time to deliver them to you who's willing to buy them. So I think these are better ways of doing it. In terms of China's commitment to it, you've already seen that China has a very different attitude towards sharing technology.

it is willing to send factories out to co-develop. And this is not something that has been traditionally part of the Western mentality. Well, a big thank you to our panelists. Ina Tenggan from Taihe Institute, Peter Cheung from Malaysia-China Friendship Association, and Dr. Frank Liu from the University of Western Australia.

That's all the time we have for this edition of World Today. I'm Dinghan in Beijing. Bye for now.