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Climate Change Deal May Help China Get US Support on Trade at G-20

by Saibal Dasgupta

   HANGZHOU --

   The Group of 20 nations, which meets in the Chinese city of Hangzhou
   Sunday, is expected to take a formal stand on curbing the growing trend
   of trade and industrial protectionism around the world, two sources
   connected to negotiations told VOA.

   Leaders of the world's largest economies are convinced that "trade and
   investment openness" are essential to stop an economic decline, and
   competitive protectionism would further damage the global economy,
   sources said. But there are serious questions about whether they would
   take steps to implement the joint position because it would mean short
   term economic sacrifices.

   China is spearheading the campaign for openness because it fears that
   Chinese exporters would face stiffer resistance in Western countries
   due to of the rise of protectionist sentiments. Support for
   protectionism was evident during the Brexit debate in Britain, and in
   the ongoing presidential race in the United States. Parts of Europe,
   including Germany, have seen protests by jobless steel workers, blaming
   China for their plight.

   "China is worried about growing resistance to its goods in foreign
   markets. But its own protectionism is politically too costly for
   President Xi Jinping to alter," David Kelly, head of consulting firm
   China Policy told VOA.

   FILE - A Chinese worker is seen behind robotic arms at a technology
   factory in Shenzhen, southern China, Aug. 21, 2015. China is
   spearheading a campaign for openness fearing that Chinese exporters
   could otherwise face stiffer resistance in Western countries.

   China is anxious to strengthen its image as a fair trader because of
   accusations that the government subsidies local industries to give
   Chinese exporters a price advantage on international markets. It is
   this impression that leads to many countries imposing anti-dumping
   sanctions on Chinese goods, which is a major hurdle for exporters in
   China.

   "Chinese leaders are more interested in consolidating China's image as
   a country which is credible, stable and well-resourced financially,"
   Kelly said.

   Beijing wants Western nations to lift anti-dumping sanctions against
   Chinese goods but would do little to create a level playing field for
   foreign investors, analysts said.

   Change of climate
   U.S. President Barack Obama and the Chinese president have both
   committed the world's two biggest economies to the Paris climate
   agreement on Saturday.
   "Despite our differences on other issues, we hope our willingness to
   work together on this issue will inspire further ambition and further
   action around the world," Obama said soon after he arrived in Hangzhou
   to attend the meeting. "It was under Chinese leadership that much of
   this progress was made," he added.

   U.S. President Barack Obama (L) and Chinese President Xi Jinping shake
   hands before a bilateral meeting in Hangzhou, China, Sept. 3, 2016. An
   agreement they reached on climate change is being seen as a major
   milestone.

   Some analysts believe that the joint ratification was part of a deal
   reached by envoys working in the background. Washington may have agreed
   to back China's proposal against trade protectionism in return for the
   climate change deal. Whatever the reasons, China's acceptance of the
   Paris agreement will be seen as a result of Obama's persuasive powers,
   and enhance his legacy, they said.

   The agreement is being seen as a major milestone which will have a
   positive effect on discussions over trade and other issues at the
   two-day G-20 meeting.

   The joint move should be seen as a case of "concrete cooperation on an
   issue where China and the U.S. used to be captains of opposing teams
   and now are working together for the benefit of the international
   community," said Paul Haenle, director of the Beijing-based
   Carnegie-Tsinghua Center for Global Policy.

   Fear of dumping

   Haenle thinks the G-20, which is being held for the first time under
   the presidency of a major non-Western nation, provides a rare
   opportunity for the Chinese president to counter protectionism as well
   as enhance his own world image.

   "Many major industrialized nations around the world are now
   experiencing strong anti-globalization and protectionist sentiments, as
   we saw with the British vote to leave the EU and the success of
   Republican candidate Donald Trump and Democratic candidate Bernie
   Sanders in the U.S. presidential campaign," Haenle said. "This context
   provides a leadership opportunity for China and for Xi Jinping, now
   nearing the end of his first 5-year term."

   Political observers believe Xi, like his predecessors, would opt for a
   second 5-year term.

   As this year's president, China is also pushing the G-20 to reach a
   broad agreement on global trade and reducing the dependence on
   bilateral agreements between countries. There is a confusing array of
   hundreds of agreements between different countries, which is believed
   to divide the world of trade.

   "In principle, most trade economists agree that multilateral agreements
   are much more beneficial than bilateral agreements. I don't expect
   opposition to the idea," CEIBS Professor of Strategy & International
   Business Klaus Meyer told VOA.

   "The problem is to get everyone to agree on the content of those rules.
   As the World Trade Organization has been demonstrating over the past
   two decades, that is easier said than done," he said.