The global pandemic, on the heels of a bruising trade war and national security concerns over Huawei, has given new fuel to the US-China decoupling argument. The concentration of medical equipment and supplies manufacturing, in desperate need across the world, has brought this clamoring to a fevered pitch. But a truly decoupled relationship will further complicate our ability to address many of the world’s most daunting and vexing challenges, from climate change, coordinating efforts for the current and next pandemic, and ensuring security. And the economic costs would be significant for the US. We found in our recent econometric analysis of data till January 2020 that the US exports lose about 1.6 times more than Chinese exports, for every percent point increase in tariff rates.
There are many legitimate grievances among US businesses, workers, and others on China’s trade and domestic economic policies. And moves towards decoupling have taken root on both sides, beginning with China’s Great Firewall. China has transgressed on a number of fronts: Intellectual property and trade secret theft, industrial subsidies, limited market access in certain sectors, and the overlapping, entangled relationships between major corporations and the Communist Party. Many of these issues stem from China’s model of growth, where factors of production are directly or indirectly controlled by the state.
First, the economic pain will be felt by US households and businesses alike. China is the source of more than $400 billion in global intermediate goods and $452 billion in goods sold to the US. This has become acutely apparent during the current crisis and high concentration of personal protection equipment and pharmaceuticals, both medicines and ingredients, manufactured in China.
Many of the goods produced in China have few substitutes, and for many households, demand for these goods is weakly responsive to prices. Estimates over the past year have shown that the long-term effect of US tariffs on Chinese goods will cost households between $800 and $1,000 per year.
It’s true that many foreign companies are re-evaluating their exposure to China. Few locations around the world even now can compete with the manufacturing base and infrastructure of China, even with rising wages. For those not invested in access to the domestic market, diversifying production for many has become an imminent and pressing objective. This was made all the more necessary by a bruising (and still ongoing) trade war and the economic shutdown due to the coronavirus. But diversification is not the same as decoupling, the latter being a complete or significant severing of economic ties.
Second, punitive measures seldom work in inducing better behavior. Decoupling would be fostered through sustaining elevated tariffs indefinitely. The primary tools in the arsenal of US trade policy are tariffs, export controls, import controls, and non-tariff barriers. The Trump Administration has relied heavily on all these tools to force a wedge in US-China economic relations. Tariffs and retaliatory tariffs have cut into these trade flows. US exports to China fell nearly 20% in constant dollar terms from 2017 to 2019, and 9% from 2018 to 2019. For many US manufacturers and commodities producers, China is the major source of demand (soybean farmers alone in 2017 exported the equivalent of one third of their output to China).
Previously, we had predicted a trillion dollar loss over ten years from the sustained upholding of these tariffs, as covered in global media. Based on our analysis using a widely used global supply chain economic model named GTAP, the losses in GDP from the Covid-19 crisis could peak at $0.75 trillion in China and $1 trillion in the US, if the shutdown sustains for the rest of this year.
Using decoupling to separate/isolate China is ridden with weaknesses. China’s Belt and Road Initiative and soft power campaign will make it difficult for US allies to comply. China is already the second largest economy in the world and surging source of innovation. Instead, multilateral trade pacts—expressly anathema to the outgoing Trump Administration—have the best chance of encouraging better trade practices. A resurrected TPP (already in place as the CPTPP among the remaining 11 members) would carry enormous weight with the US behind it. Such a framework, rather than punishing China, would incentivize its leadership to reform from within to become part of a pact representing 40% of the global economy. We found, in our UNESCAP study, that such a strategy of trade liberalization, to benefit the world as a whole in the context of TPP among other deals. In an independent analysis we pursued for this article, using GTAP model, we observed that the US has a potential to reduce the exports from China by $3 billion, while boosting its GDP by $11 billion, if the US were to join TPP and signs TTIP now.
As we show in our recent analysis, irrespective of whether it is a ‘positive’ decoupling wherein many countries join hands together and reduce their tariffs mutually leaving out China, or ‘negative’ decoupling wherein many countries raise tariffs against China, with similar reciprocation from China, the world would still stay dependent deeply on China for the large part. With a positive decoupling, it is possible to slightly reduce such dependencies while strengthening the domestic capacities and trade among the other partners.
India is also no exception to this broad inference, though during Covid-19, India’s trade deficit with China has come down significantly—this is merely a short run fluctuation that may be reversed in the near future when the economies recover. Therefore, while we must continue our efforts to improve efficiencies and capacities domestically and forge partnerships globally, it is not necessarily a ‘good’ policy or an ‘easy’ exercise to explicitly decouple from China. Possibly, India can potentially enhance its investment climate and introduce market reforms so as to attract existing investments that may move away from China.
The Covid-19 virus has exposed many of the fault lines in relationship with China. Decoupling will do nothing to resolve these issues, to the detriment of the global economy.
Spencer Cohen, a Senior Fellow with Infinite Sum Modelling LLC, Seattle, USA, is a leading expert on Chinese and US regional economic and trade issues. Badri Narayanan is the founding director of Infinite Sum Modelling, Seattle and a senior economist with University of Washington Seattle.
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Delhi High Court issues notice to Instagram, Facebook over content related to Hindu deities
The Delhi High Court on Monday issued notice to social networking platforms like Instagram and others on hearing a petition seeking to remove certain highly objectionable content related to Hindu God and Goddesses on their platforms.
A Bench of Justice Rekha Palli asked the Centre, Instagram and Facebook to file a reply on the petition and listed the matter for further hearing on August 16. The court was hearing a petition filed by Advocate Aditya Singh Deshwal against
“obnoxious” and “objectionable” posts put by some Instagram users which showed abusive language written about Hindu Gods and Goddesses along with a vulgar representation of Hindu gods and goddesses was made in the form of cartoons and graphics.
Advocate Aditya Singh Deshwal has preferred the petition primarily with a grievance that certain users of the social network platform – Instagram, maintained by respondents, have posted certain highly objectionable content on the said platform which ought to be removed at the earliest.
Senior Advocate G Tushar Rao, appearing for the petitioner submitted before the court
that Instagram has failed to comply with the new IT Rules, 2021 in its true sense and notice should be issued by the court to all the Respondents replying on the legal grounds raised in the petition.
Senior Advocate Mukul Rohatgi, appearing on behalf of respondent Instagram and Facebook submitted that the impugned content has already been removed from its platform.
He further submitted that a Grievance Officer, in terms of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021, has already been appointed by the respondent.
2 CRORE DOCUMENTS SCANNED IN J&K TO END THE BURDEN OF ‘PHYSICAL FILES’
Jammu and Kashmir administration has been putting efforts to stop the practice of physical movement of files in trunks and trucks from Jammu to Srinagar and vice versa during the Darbar Move.
The administration has successfully implemented e-Office by scanning and digitizing over 2 crore pages from 3.5 lakh files in order to facilitate the concept of e-administration in Jammu and Kashmir.
An official spokesman of the Jammu and Kashmir government said that owing to the digitization, for the first time no files were moved from Jammu to Srinagar when the Darbar reopened here.
Already the offices in the civil secretariat of Srinagar have switched over to the e-office and there are no physical files being moved from one table to another.
Divisional Commissioner Kashmir, on Sunday, while assuring the people of responsive administration has said that Darbar Move this year has been deferred due to implementation of the e-office project of digitalizing the UT’s Civil Secretariat and it has lessened the burden on the state exchequer.
WILL COOPERATE WITH PROBING PROCESS, PARKASH BADAL TELLS SIT
CHANDIGARH: Former Chief Minister of Punjab Parkash Singh Badal on Monday categorically reiterated his “intent and commitment to fully cooperating with the law” and said that he had ‘complete faith in the judiciary.’ He has, however, asked the SIT “to reschedule the date for his appearance for the investigations as he is not keeping good health and has been advised complete bed rest for ten days by doctors.”
“As soon as my health gets better, I will be available to join the investigation as per law, at my current place of residence. (MLA Flat No 37, Sector 4, Chandigarh.),” he said. Badal said he hoped that this SIT, unlike the previous one, would respect the law of the land and conduct a fair investigation, withstanding political interference from the ruling dispensation which, he said, had been brazenly subverting the law for petty political gains.
In his two-page response to the summon from the SIT investigating the handling of Kotkapura incidents by the previous government, Badal said, “the entire process of investigations already stands brazenly compromised through blatant and unapologetic political interference and it reeks too strongly of political vendetta to inspire any confidence about a fair process of law being followed.” Despite this, said Badal, he will “cooperate fully” with the investigative process.
The former Chief Minister pointed out that the very need for the present SIT had, “arisen out of the brazen politicization of the case by the previous SIT.” In this regard, Badal came down heavily against one of the members of the previous SIT and said,
“With a callous and contemptuous disregard for all the established procedures and norms, this officer completely usurped and appropriated to himself the entire functioning and designated role of all the other members of the SIT, including its Chairman and rendered them redundant and they were reportedly not even a part of the investigative process.”
The former CM further referred to reports that said that the findings of the previous SIT had been scripted jointly by half a dozen high profile members of the ruling party.“ These reports, Badal pointed out, had never been contradicted.
‘Where are the 25 missing MLAs?’ TMC MP asks Suvendu Adhikari
Trinamool Congress (TMC) MP Sudip Banerjee on Monday asked the Leader of Opposition in West Bengal Assembly Suvendu Adhikari to take care of the 25 missing BJP MLAs first before thinking about anti-defection law. Speaking to ANI, Banerjee said, “Anti Defection Law is not the subject of an individual. It has to pass through both the houses of the Parliament and then to the Assembly. If the opposition leader from the BJP wants to bring a new rule he can ask the central government. They are there in power.”
Banerjee also raised questions over the 25 BJP MLAs who were missing in the party’s meeting on Monday.
“Where are the 25 missing MLAs. First talk about issuing anti Laws against them. He (Suvendu Adhikari) needs to take care of his MLAs now, then talk about others,” added Banerjee.
On Suvendu’s father Sishir Adhikari, Banerjee said, “I had spoken with Loka Sabha Speaker Om Birla ji on June 2 requesting him to initiate a process of seizing memberships of Sisir Adhikari and Sunil Mondal. I made a follow-up call today and he said that a committee will be set up and both MPs will be called. I will also be called for my opinion.”
Earlier on Monday, Leader of Opposition in West Bengal Assembly Suvendu Adhikari held a meeting with BLP MLAs in the assembly. Following this, 50 BJP MLAs headed by Adhikari handed over a memorandum to West Bengal Governor Jagdeep Dhankhar.
“50 MLAs of Opposition including Suvendu Adhikari have handed over a memorandum to me, attracting my attention towards four points including anti-defection law and incidents of Tiljala and Chandan Nagar,” said West Bengal Governor Jagdeep Dhankhar.
The development comes days after former BJP national vice president Mukul Roy and his son Subhranshu Roy joined the TMC on Friday. Further, another BJP MLA Rajib Banerjee met with Trinamool Congress’s state general secretary Kunal Ghosh at the latter’s residence here on Saturday. The BJP lost the polls but emerged as the second-largest party with 77 seats in the 294-member West Bengal Assembly. Trinamool Congress registered a landslide victory winning 213 seats.
GUJARAT READY TO DEAL WITH THE THREAT OF THIRD WAVE: CM RUPANI
GANDHINAGAR: Gujarat is fully equipped to face the possible third wave of the Covid-19 pandemic, the government said on Monday. The state government has formulated a comprehensive action plan— Harshe Corona-Jitshe Gujarat— in a bid to tackle the possible third wave of the deadly outbreak.
The Chief Minister of Gujarat, Vijay Rupani, said that the first and the second waves of Covid-19 have been largely controlled by the state government through intensive health measures, three Ts (testing, tracing, and treatment), efforts of the frontline workers, and the cooperation of the people of the state.
He made it clear that in Gujarat, they do not have to adopt a complete lockdown system like other states. With the cooperation of the people and adherence to the Covid-19 guidelines in the state, we have been able to gradually reduce the number of Corona cases, he said. Instead of complete lockdowns, Gujarat imposed limited restrictions in only 6 cities.
During the first wave of the Covid-19 pandemic, around 1,600 cases were registered daily in the state around September 25 last year, and it increased to 1,800-1,900 in November. “As a result of our intensive measures and strict adherence to the guidelines, the number of such cases dropped to 200-275 cases per day in February,” Rupani said.
During the second wave of the pandemic in the state, the highest number of cases was recorded on April 30, at 17,605, and the number of active patients of Covid was 1.48 lakh in the entire state.
Vijay Rupani said that the number of cases has come down to less than 500 in the last week. Nevertheless, Rupani said, the Covid-19 virus has not gone away yet.
Chief Minister Vijay Rupani added that in the wake of the possibility of a possible third wave, the state government had started preparations from the second week of May. Views and opinions were sought to formulate an action plan by holding meetings with expert doctors of the state’s Covid Task Force.
The CM Rupani said that regular meetings of the core committee to review the situation of Covid19 in the state have also been held from time to time to discuss in detail the pre-preparations.
“We are announcing the action plan strategy today, finalizing all these views and the outcome of the various decisions of the core committee,” he said.
Giving details about the features of this strategy-action plan of the state government, the Chief Minister said, “We have formulated this strategy with special focus on two things. Accordingly, the state government is committed to moving forward with a two-pronged strategy to prevent the onset of the third wave— to decrease the intensity of the outbreak by following the protocols, and as well as increase the capacity of the health system to deal with the potential third wave if the number of cases increases.”
Home Ministry’s notification on citizenship unrelated to CAA, Centre tells SC
The Union Home Ministry on Monday filed an affidavit in the Supreme Court stating that the notification issued on 28th May 2021 has nothing to do with the Citizens Amendment Act. The Union Home Ministry has stated that it has issued similar notices five times in the past.
“The notification dated 28 May 2021 seeks to merely delegate the power of the Central Government to the local authorities in particular cases. The said notification does not provide for any relaxations to the foreigners and applies only to a foreigner who has entered the country legally as the Central Government used its authority under Section 16 of the Citizenship Act and delegated its powers to grant citizenship by Registration or Naturalisation to District Collectors,” the MHA submitted.
The MHA in its affidavit further said that such citizenship-granting power, in effect delegation of power, in respect of “minority Hindus with Pakistani citizenship” who had migrated to India five years back was also delegated to Collectors of all the Districts in the State of Rajasthan.
MHA also said that initially, this delegation of powers of Central Government to District Collectors of Rajasthan, Gujarat, and Home Secretary of Gujarat State was only for one year.
The Indian Union Muslim League (IUML) had also filed a petition in the Supreme Court against the Centre’s move to grant citizenship to non-Muslim refugees in thirteen districts in five states.
The petition had been filed in the Supreme Court by League General Secretary PK Kunhalikutty challenging the amendment to the Citizenship Act.
The League wants the notification issued by the Central Government inviting applications for citizenship to be stayed immediately.
The plea also said that the two provisions read together do not permit the classification of applicants on the ground of religion and therefore the order goes beyond what is permitted by the provision itself.
The order does not withstand the test of Article 14 in as much as it treats people within a particular class i.e. persons entitled to apply for citizenship by registration and naturalisation unequally by the virtue of their religion, the plea added
The petitioner further said that the concept of granting citizenship to persons based on religion was introduced vide the Citizenship Amendment Act, 2019, and the impugned order and rules are challenged in the present writ.
The said act is against Articles 14, 15, and 21 of the Constitution and violative of the basic structure of the Constitution, the plea added
On 29, May the MHA had issued a notification under the 2009 rules of the Citizenship Act, 1955 asking non-Muslims belonging to Afghanistan, Bangladesh, and Pakistan and residing in 13 districts of Gujarat, Rajasthan, Chhattisgarh, Haryana, and Punjab to apply for Indian citizenship.
The fresh notification said: “In exercise of powers conferred under Section 16 of the Citizenship Act, 1955 (57 of 1955), the central government hereby directs that powers exercisable by it for registration as a citizen of India under Section 5, or for grant of certificate of naturalisation under section 6 of the Citizenship Act 1955 in respect of any person belonging to a minority community in Afghanistan, Bangladesh and Pakistan namely, Hindus, Sikhs, Buddhists, Jains, Parsis, and Christians, residing in the districts mentioned…”
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