China's influence is growing in Central Asia. What does that mean for Russia?
At a high-level summit this week, China and its Central Asian partners voiced their shared security concerns and showed a united front amid a turbulent global landscape.
The close ties between Beijing and the five Central Asian countries – whose leaders met at the China-Central Asia Summit in Kazakhstan on Tuesday – have sparked questions about whether Russia's regional dominance is waning as it remains preoccupied with the Ukraine war.
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The Star
6 hours ago
- The Star
China's influence is growing in Central Asia. What does that mean for Russia?
At a high-level summit this week, China and its Central Asian partners voiced their shared security concerns and showed a united front amid a turbulent global landscape. The close ties between Beijing and the five Central Asian countries – whose leaders met at the China-Central Asia Summit in Kazakhstan on Tuesday – have sparked questions about whether Russia's regional dominance is waning as it remains preoccupied with the Ukraine war.
The Star
6 hours ago
- The Star
After tight-lipped talks in London, the US-China silence speaks volumes
With global economic ramifications on the line, those with a vested interest in supply chains and geopolitical stability watched closely and waited as high-ranking officials from the United States and China emerged from last week's trade talks in London. Then, the public was told little. In the absence of an official readout from both sides, hope for a bit more clarity has given way to a fog of questions and buzzy speculation about what happened behind those doors. Was leverage being applied? By whom and in what manner? And what does this perceived stand-off mean, not just for the two economic giants, but for a world desperate for direction? The silence, some say, hints at tensions, recalibrated power and the fragile balance of global trade, deepening uncertainty about the world's most consequential economic relationship. 'This round of negotiations could mark a turning point in the US-China trade war,' said Tao Dong, president and chief economist at Springs Capital (Hong Kong), in an op-ed published on Sunday by the New Economist think tank. China's hardball tactics around export controls on rare earth elements – the main focus of the closed-door London talks – perhaps caught the US delegation off guard and added a new layer of tension and complication to already fragile discussions, Tao said. 'The dynamic has shifted from unilateral US pressure to a more evenly matched contest – China is no longer on the defensive and is now negotiating from a position of strength. Second, the focus has moved from tariff levels to export controls – tariffs themselves are now secondary; both sides are targeting choke points in each other's supply chains, which is why commerce ministers, rather than just trade officials, are now at the table,' Tao wrote. The current state is one of fragile equilibrium Washington has likely come away with a clearer view of China's leverage – its dominance in key supply chains and its strategic advantage in rare earths, analysts said. And while some deals may be disclosed, any Chinese concessions on rare earth exports could be narrow and conditional, with reciprocal US promises still pending presidential approval. 'The current state is one of fragile equilibrium,' Tao explained, calling it more constructive than past episodes of maximum pressure. 'But at the core, structural and strategic divergences remain – these are unlikely to be resolved within the current negotiation framework.' One week ago, US President Donald Trump said on social media that a deal with China was 'done', pending final approval by himself and President Xi Jinping. Trump said China would supply full magnets and any necessary rare earths 'up front', and that the US agreed to 'Chinese students using our colleges and universities'. And on Thursday, he said he would set unilateral tariff rates with trading partners in the next week or two, and that letters would be sent to them outlining terms of the new deals before July's deadline. All of this unfolds against a broader climate of rising global uncertainty, not just in trade, but across politics and society, deepening divisions that continue to weigh on investor confidence. In the US, domestic tensions are also running high – an estimated 5 million people took to the streets in thousands of cities and towns, protesting what organisers of the No Kings march described as 'authoritarianism, billionaire-first politics, and the militarisation of our democracy'. Israel's bombardments of Iran since Friday, amid accusations that Tehran is nearing nuclear capability, have raised the spectre of a full-scale regional war, with potential ripple effects on oil prices, supply chains and US foreign policy calculations in an already fragile global economy. As of Tuesday, no official announcements had been made regarding the June 9-10 talks in London; the two negotiating teams only said that they had agreed 'in principle' to a 'framework' that each side would bring home for review by their respective leaders. Some analysts say signs indicate the London talks did not go as smoothly as the ones that took place a month prior in Switzerland and were immediately followed by joint announcements, including details of the result. The world's most consequential economic relationship hit a turbulent patch ahead of the London talks, as mutual accusations of breaching the Geneva truce deepened mistrust between Washington and Beijing. Then, an impromptu call between Xi and Trump on June 5 offered a symbolic olive branch but did little to alter the underlying power dynamics that were subsequently at play in London. Future negotiations are expected to continue, and this round signalled a willingness on both sides to make tactical concessions – trading short-term interests to de-escalate tensions, avoid mutual damage, and prevent market panic, Tao said. Still, the strategic rivalry between the US and China may extend into other domains, including technology and finance, as other industries may eventually be drawn into the crossfire, he warned. Both countries probably haven't played many of their cards – let alone their trump cards, said Xu Tianchen, senior China economist with the Economist Intelligence Unit (EIU), adding that China could still cut off rare earths to the US, and that the US is not letting its best chips go to China. 'If I'm to make a rough guess, I'd say that the US wanted many things from China for nothing, and that didn't impress China,' Xu said. 'Negotiations will 100 per cent continue, taking place every several months. But based on the limited evidence from the London talks, they will be tug-of-wars that are lengthy but struggle to produce meaningful results.' And while the London talks appear to have yielded little progress, some analyses suggest that they have laid bare the West's deep reliance on, and vulnerability to, China's tightening grip on rare earths. The materials, critical in hi-tech industries, from EV batteries to missile systems, are at the heart of the current stand-off and remain a weakness that the US and Europe are only now scrambling to reduce and will take years to rectify. Regarding the pressing question of how much China will ease its rare earth exports, Arthur Kroeber, founding partner of China-focused economic research consultancy Gavekal Dragonomics, said in a report last week that this is the best bet: 'China will reopen to commercial buyers enough for them to satisfy their ongoing need, but not so much that they can stockpile. And [China] may be even stingier with buyers that feed into the US defence supply chain.' I think those tariffs will be 'frozen' permanently – put back into Pandora's box Despite the narrow space in which a deal can be made, Washington is now more likely to give up ground on some firmly held positions, even those concerning national security, to get a trade agreement, he added. 'The jousting of recent weeks suggests that China has set its sights on eroding US export controls. This makes sense: China has more to gain from reopening the flows of US technology than it does from expanding the US market opportunities for its hi-tech firms,' he pointed out. According to a Reuters report quoting people familiar with the matter, the recent US-China trade talks in London failed to resolve key national security-related export restrictions. Beijing has yet to commit to approving exports of certain rare earth magnets critical to US defence systems, while Washington continues to block China's access to advanced AI chips over military-use concerns. China and the US are likely withholding specifics to preserve negotiating leverage and manage domestic perceptions, some say. Washington may be avoiding any appearance of concession, given Trump's hardline stance on trade, while Beijing may prefer to frame any potential deal as a strategic win that buys time, said Zhuang Bo, global macro strategist at Loomis Sayles Investments Asia. Economic incentives remain strong for both sides to avoid renewed escalation, he pointed out, as 'the US is grappling with inflationary pressures and persistent supply-chain vulnerabilities, while China is contending with a sharp decline in exports to the US and domestic economic headwinds, including deflation'. In this context, there is 'a high likelihood of an extension [beyond the August 10 deadline of paused tariffs] if no agreement is finalised', Zhuang added. Xu with the EIU also said an extension seems likely because 'if they don't do so, tariffs will immediately go back to levels the US can't afford'. 'I think those tariffs will be 'frozen' permanently – put back into Pandora's box,' Xu said. 'But, of course, that won't be the end of the tariff story; the US will find other tools contained in decades-old legislation.' Communist Party mouthpiece People's Daily said in a commentary on Thursday that the London talks were a step toward solving trade disputes through equal dialogue. The newspaper called for the US to honour its words with actions. China is positioned to handle the headwinds. The US is not so well-positioned Vice-Premier He Lifeng, who led China's delegation in London, said Beijing was 'sincere but also principled'. He urged the two to safeguard the hard-won outcomes of their dialogue and maintain ongoing communication, the state's Xinhua reported. Alberto Vettoretti, managing partner of the business consultancy Dezan Shira & Associates, said US officials could extend the tariff pause if the two sides have made genuine progress on key issues, including lifting reciprocal export restrictions, but more time is needed to agree on other areas. 'If trade talks stall entirely, and little to no progress is made, then it's possible Trump would try to pressure China by raising tariffs again,' he said. 'How Trump acts on July 8, when the 90-day pause on the Liberation Day tariffs is up, and whether the US raises tariffs on countries that haven't concluded deals with the US, could be a good indicator of how he will act with China in August.' China's global export curbs could backfire – preferential treatment for the US risks alienating other partners, he added. 'Third countries will likely push their own agenda and adopt a multipronged approach. Companies from China will continue to expand overseas to curb related risks, so neighbouring countries shall benefit from the current instability,' Vettoretti said. In terms of dealing with China, Trump's urgency depends on whether he realises he misplayed his hand – or was misled, said Victor Gao, vice-president of the Centre for China and Globalisation, a Beijing-based think tank, as a prolonged deadlock risks backlash from consumers and US firms long reliant on profitable China ties. 'China is positioned to handle the headwinds. The US is not so well-positioned,' Gao said. 'China is willing to wind down its positions to zero.' So far, Trump has claimed that Chinese imports into the US receive a sum of '55 per cent' tariffs. Gavekel's Kroeber said a deal on fentanyl would be low-hanging fruit, but Trump's trade negotiators may be reluctant to surrender much of their tariff leverage for a side-agreement on drugs. If Trump truly wants a deal, Kroeber added, he could easily ease chip-export controls via the Bureau of Industry and Security, a single-agency decision. But flashy wins like Chinese factories creating US jobs are more politically rewarding – and require complex reviews by the Committee on Foreign Investment in the US, which includes nine departments, including Defence and Homeland Security. Either path demands Trump break from years of national-security orthodoxy, and Trump 'is still far from making that move', Kroeber said. Dan Murphy, executive director at the Mossavar-Rahmani Centre for Business and Government of Harvard Kennedy School, said last week during the Caixin Summer Summit in Hong Kong that the US and China might be missing or not factoring in potential risks and complications while failing to grasp the big picture. 'My concern, and I think it is going to be a core concern that extends to the economy of China and Asia, is that China and the United States are looking [at each other] from farther away, and we are seeing a less nuanced and less complicated picture, and this can lead to miscalculations.' - SOUTH CHINA MORNING POST
The Star
8 hours ago
- The Star
Vietnam's top leader plans US trip as tariff deadline looms
HANOI: Vietnam's Communist Party chief To Lam (pic) is preparing to travel to the US in coming weeks as the two sides look to clinch a trade deal before President Donald Trump's higher tariffs kick in, according to people familiar with the matter. Lam aims to meet Trump to help finalise an agreement, the people said, asking not to be identified as the trip isn't finalised yet. It's unclear what date the party chief will travel, although preparations are being made for him to be there in the next few weeks, they said. He is expected to lead a delegation of Vietnamese officials and business executives, they said, as the nation looks to seal more deals to buy additional American goods to reduce its trade surplus with the US. Pham Thu Hang, a spokesperson for Vietnam's Ministry of Foreign Affairs, said she hadn't received any information about the visit when asked about it at a regular press briefing Thursday (June 19). The White House declined to comment. Negotiators are close to a framework agreement under which Vietnam is pushing for tariffs in the range of 20% to 25%, Bloomberg News previously reported. The US is demanding stricter enforcement against the transshipment of Chinese products and the removal of non-tariff barriers. The two sides held more talks in a virtual meeting on Thursday, attended by US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, Vietnam's trade ministry said in a statement. Trade Minister Nguyen Hong Dien told the officials Vietnam seeks "to develop practical and harmonious' rules with the US to deter fraudulent exports. He also welcomed the proposals from Lutnick and Greer "to advance the negotiation process,' according to the statement. Vietnam has engaged in weeks of intense trade diplomacy since Trump imposed a so-called reciprocal tariff rate of 46% on imports from the country. He then postponed the duties until July 9, temporarily setting a 10% import tax on trading partners to allow time for talks. In recent weeks, top officials from Vietnam have gone to the US to rally support. The agriculture minister secured US$3 billion worth of provisional deals during a tour of US states. The trade minister met with executives from Nike Inc, Gap Inc, and Walmart Inc to encourage key industry players to get behind negotiation efforts. Vietnam is a critical industrial base for these companies, which count on the nation's factories to manufacture goods ranging from T-shirts and jeans to basketball shoes. Brands raced to move manufacturing to Vietnam over the past decade as US-China tensions escalated, helping turn the country into one of the world's biggest production hubs. The nation's trade connections with China, its largest bilateral trade partner, have been a major sticking point in negotiations. During Trump's economic battle with Beijing in his first term, the manufacturing shift to Vietnam helped build the kind of massive trade surplus that has drawn the ire of the US president. - Bloomberg
