Latest news
Thumbnail
Opinion

Global Value Chain Must Be Safeguarded Against Disruption

In the past one year and a half here, I have deeply felt Afghanistan’s strong desire to turn from a ‘landlocked’ to ‘land-linked’ country. As the heart of Asia and a new member of the World Trade Organization (WTO), Afghanistan attaches great importance to connectivity and free trade, places its hope for job and wealth creation on international trade and investment and pursues a more favorable position on the global industrial, supply and value chains. It opposes politicization of trade issues, argues for accommodation by the world community of the realities of developing countries, the least developed ones in particular, and works for further integration of the Afghan supply chain with the Chinese value chain.

China completely understands and supports these reasonable appeals and renders full support to Afghanistan in reinvigorating the glory of the ancient Silk Road and becoming a hub of regional transport and trade. In this connection, China has proposed to join hands with Afghanistan in the Belt and Road Initiative (BRI) by launching direct flights and cargo train services, exploring the possibility of cross-boundary railways and optical cables and extending the China-Pakistan Economic Corridor to Afghanistan.

China has opened its market to Afghanistan, accepting Afghan featured product such as marble, saffron, pine nuts and carpets with the most preferential tariffs. We support more convenient exchanges between the business communities and investments by viable Chinese enterprises in Afghanistan. Every year China provides more than 150 scholarships for Afghanistan and trains over a thousand Afghan professionals in many different fields, including in hi-tech, such as satellite remote sensing. Believing that we must not only give a man a fish but also teach him to fish, we are committed to helping Afghanistan master both practical and high and new technologies.

My Afghan friends told me very sincerely that the Chinese words and deeds demonstrate the sense of responsibility of and a brotherly friendship from a big country. To realize peace and prosperity at an early date, Afghanistan needs collaboration from big countries and expects them to act responsibly.

But more recently Afghan friends have been having increasing worries over connectivity and global trade. The reason is known to all. While China builds roads, another big country builds walls. While China champions multilateralism, another big country goes unilateral. While China opens its market, another big country increases market barriers. While China actively reduces tariffs, another big country increases tariffs without any reason. While the Chinese are busy laboring and shaking hands, another big country is busy extending the so-called ‘long arm jurisdiction’.

For the global value chain that Afghanistan participate in and benefit from to function normally, three conditions must be satisfied. First, all links along the chain must be connected instead of being separated from one another and the connection is mainly by way of technology. Second, it is ‘running water’ instead of ‘backwater’ along the chain. In other words, the positions of all parties involved in the value chain are dynamic and changing. Third, enterprises are the main players along the value chain, which is the combination of all activities by enterprises to design, manufacture, distribute, deliver and service their products. In this connection, all governments giving fair and friendly treatment to enterprises and supporting entrepreneurship and sound market competition is critical to the sound development of the global value chain.

It is therefore deeply disturbing that the country, that was an advocate of the global value chain theory, stands at the top of that chain and has benefited the most from it, is sparing no effort in disrupting the global value chain by neglecting and weakening the three underlying conditions.

That country wants only benefits from the value chain and does not wish to undertake any risk or cost. It intends to withdraw from the global value chain and set up something anew, something over which it has the final say instead of one operating under rules made through discussions.

That country wishes to get the excess monopoly interests on top of the value chain and to extend its technological hegemony as long as it can. For this purpose, it has raised the sword of sanctions to cut links off the chain by ‘decoupling’ states in terms of the economy, technologies and talents.

In front of competition pressures, that country has not reflected over itself nor attempted to catch up or even overtake the others through technological advancement, management innovation or market optimization. Rather, it has pooled its national strength, the security machine in particular, to suppress the advanced enterprises of another country. As Afghan friends once commented, the deliberate and unscrupulous acts by the most powerful country in the world to pick up a dirty fight and flex muscle against the lady CFO of a lawfully operating and globally respected enterprise is shockingly despicable and by no means gentlemanly.

China and Afghanistan are both developing countries and both members of the United Nations and WTO. We both believe that economic globalization and global value chain represent an unstoppable trend of the times. We both stick to market openness, free trade and multilateralism. And we both act in strict observance of and safeguard WTO rules.

Regrettably, not all countries are like China and Afghanistan in taking seriously the existing international order and market rules. Some country just wants to deprive developing countries of their entitlements or to solidify the North-South development gap and the currents positions on the global value chain. It just can’t accept the possibility of any enterprise or product from a developing country to outperform those of its own. While being harmful to others, the acts of that country will bring no benefit to itself. They will only cast a shadow on its own economy and the global value chain. Should such acts be allowed to prevail, big countries would probably still have some room on their domestic markets for maneuvering while small and landlocked countries would become the largest direct victims.

With utmost sincerity, China goes to economic and trade consultations with other major countries. In the consultation process, we believe in the principles of mutual respect, equality and mutual benefit and are committed to reaching a mutually acceptable agreement. Now the key is: it takes two to tango. If one party attempts to bully its counterparty, uses maximum pressure and goes back on its own words frequently, how can the consultation be fair? If one party does not respect the other’s sovereignty or core interests and always attempts to force the other to make concessions or seek results beneficial to itself only, is it possible for the negotiation to be successful?

Out of national and international interests, China does not wish to fight a trade war. But we are not scared by it, either. If necessary, we are ready to fight to the end. This position is quite easy for the Afghan friends to understand because it is the necessary choice for a country with a long-standing history of civilization and a strong national esteem. The Chinese position is not taken just for itself. It has been taken in defense of the normal functioning of the global industrial, supply and value chains and the overall interests of and development space for all developing countries including Afghanistan.

Liu Jinsong is Ambassador of China to Afghanistan.

Opinion

Global Value Chain Must Be Safeguarded Against Disruption

Chinese envoy writes that China renders full support to Afghanistan in reinvigorating the glory of Silk Road.

Thumbnail

In the past one year and a half here, I have deeply felt Afghanistan’s strong desire to turn from a ‘landlocked’ to ‘land-linked’ country. As the heart of Asia and a new member of the World Trade Organization (WTO), Afghanistan attaches great importance to connectivity and free trade, places its hope for job and wealth creation on international trade and investment and pursues a more favorable position on the global industrial, supply and value chains. It opposes politicization of trade issues, argues for accommodation by the world community of the realities of developing countries, the least developed ones in particular, and works for further integration of the Afghan supply chain with the Chinese value chain.

China completely understands and supports these reasonable appeals and renders full support to Afghanistan in reinvigorating the glory of the ancient Silk Road and becoming a hub of regional transport and trade. In this connection, China has proposed to join hands with Afghanistan in the Belt and Road Initiative (BRI) by launching direct flights and cargo train services, exploring the possibility of cross-boundary railways and optical cables and extending the China-Pakistan Economic Corridor to Afghanistan.

China has opened its market to Afghanistan, accepting Afghan featured product such as marble, saffron, pine nuts and carpets with the most preferential tariffs. We support more convenient exchanges between the business communities and investments by viable Chinese enterprises in Afghanistan. Every year China provides more than 150 scholarships for Afghanistan and trains over a thousand Afghan professionals in many different fields, including in hi-tech, such as satellite remote sensing. Believing that we must not only give a man a fish but also teach him to fish, we are committed to helping Afghanistan master both practical and high and new technologies.

My Afghan friends told me very sincerely that the Chinese words and deeds demonstrate the sense of responsibility of and a brotherly friendship from a big country. To realize peace and prosperity at an early date, Afghanistan needs collaboration from big countries and expects them to act responsibly.

But more recently Afghan friends have been having increasing worries over connectivity and global trade. The reason is known to all. While China builds roads, another big country builds walls. While China champions multilateralism, another big country goes unilateral. While China opens its market, another big country increases market barriers. While China actively reduces tariffs, another big country increases tariffs without any reason. While the Chinese are busy laboring and shaking hands, another big country is busy extending the so-called ‘long arm jurisdiction’.

For the global value chain that Afghanistan participate in and benefit from to function normally, three conditions must be satisfied. First, all links along the chain must be connected instead of being separated from one another and the connection is mainly by way of technology. Second, it is ‘running water’ instead of ‘backwater’ along the chain. In other words, the positions of all parties involved in the value chain are dynamic and changing. Third, enterprises are the main players along the value chain, which is the combination of all activities by enterprises to design, manufacture, distribute, deliver and service their products. In this connection, all governments giving fair and friendly treatment to enterprises and supporting entrepreneurship and sound market competition is critical to the sound development of the global value chain.

It is therefore deeply disturbing that the country, that was an advocate of the global value chain theory, stands at the top of that chain and has benefited the most from it, is sparing no effort in disrupting the global value chain by neglecting and weakening the three underlying conditions.

That country wants only benefits from the value chain and does not wish to undertake any risk or cost. It intends to withdraw from the global value chain and set up something anew, something over which it has the final say instead of one operating under rules made through discussions.

That country wishes to get the excess monopoly interests on top of the value chain and to extend its technological hegemony as long as it can. For this purpose, it has raised the sword of sanctions to cut links off the chain by ‘decoupling’ states in terms of the economy, technologies and talents.

In front of competition pressures, that country has not reflected over itself nor attempted to catch up or even overtake the others through technological advancement, management innovation or market optimization. Rather, it has pooled its national strength, the security machine in particular, to suppress the advanced enterprises of another country. As Afghan friends once commented, the deliberate and unscrupulous acts by the most powerful country in the world to pick up a dirty fight and flex muscle against the lady CFO of a lawfully operating and globally respected enterprise is shockingly despicable and by no means gentlemanly.

China and Afghanistan are both developing countries and both members of the United Nations and WTO. We both believe that economic globalization and global value chain represent an unstoppable trend of the times. We both stick to market openness, free trade and multilateralism. And we both act in strict observance of and safeguard WTO rules.

Regrettably, not all countries are like China and Afghanistan in taking seriously the existing international order and market rules. Some country just wants to deprive developing countries of their entitlements or to solidify the North-South development gap and the currents positions on the global value chain. It just can’t accept the possibility of any enterprise or product from a developing country to outperform those of its own. While being harmful to others, the acts of that country will bring no benefit to itself. They will only cast a shadow on its own economy and the global value chain. Should such acts be allowed to prevail, big countries would probably still have some room on their domestic markets for maneuvering while small and landlocked countries would become the largest direct victims.

With utmost sincerity, China goes to economic and trade consultations with other major countries. In the consultation process, we believe in the principles of mutual respect, equality and mutual benefit and are committed to reaching a mutually acceptable agreement. Now the key is: it takes two to tango. If one party attempts to bully its counterparty, uses maximum pressure and goes back on its own words frequently, how can the consultation be fair? If one party does not respect the other’s sovereignty or core interests and always attempts to force the other to make concessions or seek results beneficial to itself only, is it possible for the negotiation to be successful?

Out of national and international interests, China does not wish to fight a trade war. But we are not scared by it, either. If necessary, we are ready to fight to the end. This position is quite easy for the Afghan friends to understand because it is the necessary choice for a country with a long-standing history of civilization and a strong national esteem. The Chinese position is not taken just for itself. It has been taken in defense of the normal functioning of the global industrial, supply and value chains and the overall interests of and development space for all developing countries including Afghanistan.

Liu Jinsong is Ambassador of China to Afghanistan.

Share this post