Hello and welcome to World Today, I'm Denhanin Beijing.
Coming up, China says it is ready to enhance further cooperation with Ireland.
In a crisis meeting in Paris, European leaders stress the support of Ukraine but disagree on peacekeeping missions.
China is condemning the United States after lying on Taiwan independence was cut from websites.
South Africa says the U .S.
has no response to its request to discuss U .S.
President Donald Trump's order cutting off aid.
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Chinese Foreign Minister Wang Yi says China is ready to enhance cooperation with Ireland to achieve shared development and prosperity.
The senior Chinese diplomat made a remark in a Monday meeting with Irish Prime Minister Michael Martin in Doubling.
Wang Yi called on China and Ireland to enhance dialogue, build trust, and properly manage their differences, emphasizing that both countries are supporters of multilateralism and a free trade.
For his part, PM Michael Martin said that Ireland is willing to foster a closer partnership with China while continuing to adhere to the One China principle.
Wang Yi also met with Irish Deputy PM and foreign minister Simon Harris during his visit to the country.
So joining us now on the line is Harvey Zolden Senior Fellow with the Center for China and Globalization.
So thank you very much for joining us today Harvey.
So first of all, what do you make of the significance of China and Ireland moving to enhance their mutually beneficial cooperation against the backdrop of the rising tide of unilateralism and protectionism globally?
I think it's a very good sign, a very important sign.
It's very much a symbol of the fact that there can be international trade and cooperation amidst all the storms that we're facing at the moment, especially the storms coming out of Washington, DC, that were carried in the last couple days to the Munich Security Conference that President Trump is trying to build up all kinds of trade wars.
And other nations like Ireland are trying their best to maintain in the international regime and international trading system that has lifted all our votes, that has made Europe much more rich than it was after World War II, that's made a tremendous transformation in China to the industrial and industrialized country and high tech country that it's become and also that's benefited the United States, mightily since World War II.
For some reasons, only known to him, President Trump is trying to wreck all this with his very simplistic and incorrect use of tariffs.
Ireland is a shining example of a country that just wants to get on with it and do business and have a win -win orientation.
So this is very significant.
Both nations really are strong advocates of multilateralism and free trade, making collaboration a strategic response to these challenges.
China's modernization efforts and Ireland's trade -oriented economy create a complementary partnership.
Ireland benefits from China's vast consumer market and industrial base.
While China gains from Ireland's expertise in sectors like pharmaceuticals, financial services and technical technology.
Irish exports to China have grown significantly and they have actually increased by 529 % since 2013 with a trade surplus favoring Ireland.
These two countries are really made for each other.
So by the way based on what you have elaborated regarding the trade momentum between the two sides between China and Ireland, what do you think are some of the key factors that have contributed to this momentum?
There's several factors actually.
From what I can see, Ireland does view China China as a key market to diversify trade and to reduce reliance and traditional partners like UK and the US, especially post Brexit.
Another factor is that pharmaceutical trade is important.
Ireland's exports to China are dominated by high value goods such as vaccines, integrated circuits and medical devices.
and that reflects China's demand for advanced technology and healthcare products.
Also, Chinese investment in Ireland is an important factor.
China's investment in Ireland has surged because of their investments in technology and business services, making Ireland a hub for Chinese firms seeking access to the EU market.
Also, China's exports to Ireland, including machinery, chemicals, electronics, have increased significantly due to competitive pricing and supply chain integration.
And lastly, Ireland's status as an English speaking EU member enhances its appeal as a gateway for Chinese business into Europe.
So, Ireland is home to European headquarters for US companies like Intel, Apple, MATA, Pfizer.
Some of these companies we know belong to the US tech giants.
And Chinese companies like Huawei, TikTok, and Xing have also decided to locate their European headquarters in Ireland as well.
This dynamic has brought benefits to Ireland on one hand for sure, but in the meantime, some people are also suggesting that this could also land Ireland in the crossfire of an economic and trade war between the U .S.
and China. So what is your take on this, Harvey?
You mentioned a bunch of companies and those companies are some of the leading companies globally in a variety of fields.
It's no accident that those are in Ireland.
It's no accident that Chinese companies are seeking out Ireland as a place to do business and to concentrate their operations from.
That's because Ireland, of many countries in the world and of all EU countries actually, is the most business friendly.
Of course, this is like raising a red flag in front of a bull, the bull being President Donald Trump, the bull in the China shop, because President Trump has this weird view of tariffs and international trade, and he hates any kind of trade deficits.
Trade deficits are not necessarily bad.
But what is happening is that these statistics are going to stick out like a sore thumb to President Trump, and probably he'll have a great deal of trouble with this spino Ireland relationship.
And I believe that it's going to take a lot of strength and courage by three parties here to get through this.
Yeah, one is Ireland.
It's a strong country.
but they need, number two, the backing of EU, and of course there's China.
And I think China is the country, the most powerful country in the world when you look at its economy from a perspective of PPP.
And also China has a win -win orientation.
They want to see this done because they've realized that the economic policies of the last few decades has risen all boats.
It's risen China's boat, is risen America's boat, and it's risen the EU's boat.
So yeah, I believe that President Trump and his people who want to stop globalism are going to have their knives out.
But I do believe what I believed for a long time.
And that is that the EU, if it exercises strategic autonomy more than it has been, can be the balancing point between China and the US, let's face it.
The EU is economically as much a powerhouse as is the US.
And I believe the EU is starting to come around to see that they can't rely on the US because of these outrageous unpredictable actions of President Trump.
And so Ireland is actually going to be the country within the EU, the sleeper country that leads the EU forward to exercise more strategic autonomy, first in economic matters and political matters.
Hmm. During his meeting with Irish Prime Minister Wang Yi mentioned about the Shannon Free Zone in Ireland, which he said has provided valuable experience for China.
Shannon Free Zone was established in the late 1950s as the world's first and modern Free Trade Zone at the time.
So what do you think China has learned from the Irish experience during its own development of say free trade zones and special economic zones?
You know you're leader Dunshale Payne.
One of the things he's best known for as part of his reform and opening up drive was to establish free trade zones.
And these have really been the engines that have powered China's growth.
growth. If you look at a place like, let's say, Shenzhen, that was a small fishing village a couple of decades ago, and is now a high -tech and manufacturing powerhouse, this couldn't have happened without it being declared a free trade zone, a special economic zone.
You look at the policies in other places in China as well.
You look at Shanghai and you look at Pudong and you see how Pudong has grown from just a field that I remember seeing 30 years ago to now being one if it was a city by itself would be one of the largest economies in in the world if it were a country.
These are all due to the inspiration of Ireland and to the Shannon free trade zone.
So, I believe that this is one of the reasons that China and Ireland have this special relationship because Ireland was a muse for China, was the inspiration in many ways for China's growth.
It's not given a lot of credit for that, but this is the story.
These are the facts.
So, the final question before we let you go, Harvey.
Why do you think among all EU member states, Ireland represents a friendly country to China?
I believe it's because Ireland is a friendly country full of friendly pragmatic people.
And I believe that that's a very, very important, but I do believe that the example of the free trade zones and the leadership that has been shown from Ireland to China and establishing free trade zones and what China's learned from Ireland about these has been one of the engines that has made China the great country that it is today.
Thank you very much for joining us.
Harvey Dolden, Senior Fellow, West Center for China and Globalization.
Coming up in a crisis meeting, European leaders stress support for Ukraine, but disagree on peacekeeping missions.
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An emergency meeting among European leaders has concluded in the city of Paris without any concrete announcement.
European leaders have vowed to continue their joint support for Ukraine, but fail to provide any new security guarantees.
US President Donald Trump's declared intention to strike a deal to settle the war in Ukraine has shaken Europe to its core, stoking fears that it could possibly lead to painful concessions for Ukraine and leave the continent vulnerable.
leaders of France Britain and Denmark on Monday voiced about their openness towards deploying or sending peacekeeping soldiers to Ukrainian soil however Germany's Chancellor Olav Scheld was far more critical of this very idea suggesting any discussion on peacekeepers is quote -unquote completely premature Polish Prime Minister Donald Tszuck on his part has also ruled out the possibility regarding sending his own country's soldiers to Ukraine for a peacekeeping mission.
So joining us now underlying is Dr. Kamau Makili Aliev from Raul Wallenberg Institute of Human Rights and Humanitarian� in Sweden.
Thank you very much for joining us.
Yes I'm here. Okay.
So first of all why do you think European leaders are divided on deploying peacekeeping soldiers to Ukraine?
Well, there are a number of reasons, right, because essentially European countries are in a different kind of situation, both internally and externally, politically, strategically, and militarily.
The most worries are, of course, one of them is risk of escalation, because that's why you see that France and UK are open to deploying peacekeepers, while, due to internal dynamics and the strategic positioning Germany and Poland fear that it will provoke direct Russian retaliation, and that this division would turn into actively military confrontation.
So that's why you, you see that kind of announcements from Shor, that ideally completely mature and so on and so forth.
You also see differences in military capacitance, the domestic policy displays as a role.
That's why you would, you know, Denmark is not in the same position as Poland.
And Denmark was very open to sending peacekeepers as well, problems fears that it can provoke problems with its borders, aside the border of Ukraine, and that the troop deployment seen as an acceptable risk.
You also see that there is a lack of guaranteed there, and the European nations are naturally helping people make military resources through larger mission outright, so to say.
And of course, what's the objective of the peacekeeping mission are going to be, is also under question, right?
Is it going to be only monitoring, or is it going to be military enforcement?
Is that two very different things?
So yeah, that's why you have this difference.
So UK Prime Minister Kail Stimer has called for American backstop for a scenario in which European countries are to send peacekeeping soldiers to Ukraine.
Do you think that will be something that US President Donald Trump will be willing to provide?
I think it's highly unlikely.
Yes, summer said that it would be a good idea, and that the American movement would provide crucial deterrence.
But if you look at the history, Trump has consistently pushed for Europe to make – take more responsibility for its own security, right?
And with its America 1st kind of stance that he has, it's unlikely that he's going to commit U .S.
troops more resources to European -led operation.
So, backstop would mean going in the near -ear, and it's going to be unacceptable in these terms.
I would say that if I listen carefully to what the Defense Secretary of the United States says, they want to move the United States as not being primarily focused on European security, so that also indicates unwillingness for such a backstop action for Europe.
Trump may offer rhetorical backing due to the situation as leverage, but leverage against the Europe actually demanding more NATO spending and so on and so forth.
So no, it's highly unlikely that Trump would provide the backstop.
Okay. So, by the way, Kamau, some people say the UK could possibly act as a bridge between Trump and Europe, potentially serving as a key messenger to the Trump White House.
What is your take about this?
Well, you know, you can't imagine U .K.
being such a bridge between Trump and Europe, but I think there are right now serious challenges.
First of all, the U .K.
has historically played kind of a balancing role between Washington and Europe, yes, that is true.
and understand it even remains, you know, kind of committed to NATO and to European security and thus it makes, it's kind of a natural inter -political, that's why you have the kind of idea that you then might serve as a bridge.
However, if you think about it from, he prefers direct bilateral view, that's the right and you can see that it's even more prominent right now in all the actions in the foreign policy.
that they have taken.
That means that they might engage more likely directly with like leaders like Macron and should rather than rely on the UK as an intermediary here.
And this is another part of this is when this summer is also seen as too aligned with Europe.
Trump just may dismiss them as, you know, another globalist leader and there is going to be no trust between them and think it's not going to be a trusted go between kind of bridge kind of the creating person.
On the other hand, if UK leans too much toward Trump, that might eliminate its key European allies of UK.
So if UK can, it will facilitate with communication, but I don't think it can meaningful influence Trump's position on Ukraine.
So despite a division with regard to peacekeeping missions, European leaders we know have a message, which seems to be consistent that they stand by their support to Ukraine.
So how much does this pledge from European leaders matter to Ukraine right now?
Well, it matters symbolically that European leaders are reforming the commitment and the signal is that it's not being abandoned despite from the shift in stance, right?
Practically, it matters because economic aid and resistance remain crucial but without concrete new measures like commitment of more troops and advanced weaponry Ukraine will still gonna face very severe battlefield challenges and of course yours again US factor right if Trump reduces United States support then European led just alone may not be enough to sustain Ukraine more effort so without major military commitments that kind of free of formation is a little bit shallow.
So, if we take a look at President Donald Trump's approach to trying to strike a deal to end, to put an end to the war in Ukraine, do you think we can somehow draw a kind of parallel here between the current situation surrounding the war in Ukraine and the situation back in 2020 when the first Trump administration at the time managed to reach a deal with Taliban in Doha, Qatar by leaving the then Afghanistan government in Kabul out of negotiations?
I think the parallels are quite notable right?
The bypassing of key players from Trump's deal directly with Taliban sidelining the Afghanistan government at the time, and if he negotiates with Russia without Ukraine at the table, that means the defense could be similarly sidelined.
There was also focus on ending rather than winning, right?
In the whole context.
Trump emphasis on the quick deal also suggests that there is prioritization of withdrawal over just resolution in Afghanistan, and it's the same kind of withdrawal over the just resolution in Ukraine.
And I think also the instability of such agreement can also be quite straightforward.
The U .S.-Taliban deal did not prevent Afghanistan's collapse, and a rush to Ukraine settlement can also leave Kiev very vulnerable, the future Russian advancement and aggression, and leave Ukraine completely defenseless.
So it also can lead to the collapse of Ukraine.
I wouldn't go so far, but I mean, potentially it can.
Okay, so the final question before we let you go, ultimately Kamau, what do you think President Trump is probably looking for when we talk about how he is attempting to put an end to the war in Ukraine?
I think he ultimately has three main objectives.
He wants a very quick win for his own popularity and brand and showcase his dealmaking skills by ending a major conflict that previous administration couldn't resolve.
I think he wants to shift the second one, to shift the U .S.
focus away from Europe.
He wants to broaden foreign policy priorities in competition with China, and reducing the United States enrollment in NATO.
And he wants to certainly cut the spending.
He wants to repeatedly criticize the A .T.
Ukraine as excessive.
And he wants to know the settlements that lower kind of the financial commitments that America has that would align with his agenda and then he can show the effect as well.
I think that was great.
Thank you very much for joining us.
Dr Kamau Makili Aliyev joining us from Raoul Wallenberg Institute for Human rights and Humanitarian Law, based in Sweeden.
Thank you very much for joining us.
More to come, China condemns the United States after lying on Taiwan independence was cut from the State Department's official website.
South Africa says the United States has no response at all to its request with regard to discussing U .S.
President Donald Trump's order that cut off aid to the country.
You're listening to World Today, to listen to this episode again or to catch up on a previous episode, you can download our podcast by searching World Today.
I'm Dean Heng -Yin Beijing, we'll be back after a short break.
You're listening to World Today, I'm Dean Heng -Yin Beijing.
China has condemned the United States for removing a reference to the status of Taiwan, urging Washington to correct its mistakes.
The U .S. State Department has dropped a statement from its official website stating that Washington does now support Taiwan independence.
China's Foreign Ministry spokesperson on Monday described the U .S.
Move as a wrong and serious signal to separate as the forces advocating for Taiwan independence.
So joining us now underlying is Dr. Liu Guangyu from the Institute for Taiwan Studies Chinese Academy of Social Sciences.
Thank you very much for joining as Dr. Liu.
Good evening. This is Kwang Yiu.
So first of all, why does this particular piece of statement here that the United States does now support Taiwan independence matter?
Well, we know that non -support for Taiwan independence is one of the core components of the US policy towards China and related to Taiwan.
There is also one of the most important and arguably the highest political consensus at level of the head of state that has been reached by a number of US administrations, including the former Biden ministration with the Chinese leadership.
So, the importance of the expression, the change of expression, is reflected in fact that this existence or non -existence shows certain tendencies of current US government and it also releases potential signal of changes of the U .S.
policy to both sides of the straits and the world.
And at the same time, also about political credibility of the U .S.
We know that if the U .S.
leaders repeatedly go back on their words, it will be difficult for China and the U .S.
to build up mutual trust, especially on the Taiwan question where the Chinese side position is very clear, strong, and unambiguous.
So does the removal of this very statement from the website here signal a fundamental change or a fundamental shift in terms of Washington's policy on the Taiwan question and how dangerous is the removal here?
Well because the level of U .S.
Department of State is actually not the ultimate decision maker of U .S.
policy especially China policy.
And this statement on the U .S.
Department of State's website also cannot ultimately and wholly reflect and there has been, or there is now a so -called paradigm shift in the US China policy and its policy towards Taiwan.
However, it does indicate some possibility of changes, the worth note of more than, yes, yeah.
So because we know that if the expression is deliberately be added or deleted at the level of the State Department, then it might suggest that, first of all, there is at least a part of the US government that wants to renege on its commitments to China and push the US policy towards Taiwan to make a drastic downside undermining the US -China relationship and the stability of Taiwan Strait.
And secondly, this might mean that a part of the US government wants to use Taiwan to a game with the Chinese mainland, and began to take the initiative to accumulate some sort of bargain chips for themselves and may even want to seek a deal.
And further, this also means that some forces within the US is trying to release negative signals, as you said, to the separate forces advocating Taiwan independence, encouraging the latter to further rely on the US while increasing efforts to meet Trump's so -called line share of demand for Taiwan.
one. So in short, no matter which purpose are or multiple considerations, this change means that this course tower competition within Trump administration around the one China policy is very, very intense.
But US side should see more clearly that Taiwan independence means war, as well as the biggest crisis in the Sino US relations.
So if the US loosen its stance on its most, on the most sensitive issue, they will certainly lift the stone and head is on foot.
So judging from his track records, we understand US Secretary of State Marco Rubio was actually a steadfast supporter of Taiwan when he was serving as an American Senator.
So what do you make of the potential role played by Rubio himself here?
For example, Do you think it could be his personal likes or dislikes that led to the removal of the statement here?
Why or why not? Yeah.
Mr. Rubio might be a key person that we need to watch in the future, because as the current secretary of state Rubio's personal political perspectives and tendencies will undoubtedly affect the state departments Department of State's policy towards China.
And Rubio we know that his die hard anti -China, anti -communist political and also notorious supporter for Taiwan independence.
He has been repeatedly stating that he's sort of a support for Taiwan as so -called independent democracy and a strong U .S.
island. And also in his base when he was working in the Congress, including the Taiwan Relations Reinforcement Act, and the Taiwan Peace Through Strength Act, the so -called pro -Taiwan acts, and he has been expressing his support for Taiwan, the so -called decision from Chinese mainland, as well as obtaining some sort of membership, former membership in international organizations.
And these elements, these expressions are clearly reflected to varying degrees in today's states, expression changes we see.
So of course, they should, it should be seen that Rubio and the State Department when we know that they are key persons, but after all, still, they have to follow orders and they have to they're still, still directly implementing Trump's policy line.
So what actually happening might be that Rubio as the policy enforcer, he's trying to take advantage of Trump's mega and isolationism by mixing and planting inserting his own personal preferences and the agenda to influence the Trump's policy and the U.
S China relations. So exactly talking more about that.
After Trump was first elected in 2016, he once played fire on the Taiwan question, but later he, uh, he took some steps backwards after he assumed office in January 2017.
Now, with regard to his second term in the office, what is your expectation of his administration's overall approach with regard to the Taiwan question briefly?
Yes, yes we know that fire.
He caught a Taiwan and he learned lesson.
I think we hope that he will take this lesson in his second term.
We know that Trump's 2 -0 or second term policy towards China and Taiwan is marked by a continuation of some sort of trends from his first team, but also we can see emerging new characters and elements.
On one hand, there might be a strengthening of US -Taiwan relationships, we can explain, with regularized arms sales, expanding economic ties.
This is driven by the US strategy competition with China, and their perspective of Taiwan's so -called growing strategic importance, especially in some conductor sector.
And on the other hand, Trump's unpredictability brings rates.
And there are already speculations that he might make grand deal with China over Taiwan, trading away Taiwan's interests for what he perceives a good deal for the US.
And he's also been critical for Taiwan, for allegedly speculating US influence, and is likely to continue to call on Taiwan to increase their defense budget.
Overall, I think Trump's new point new Taiwan policy might be a mix of opportunities and challenges for both sides of the strait.
Your points well taken.
Dr. Liu Kwang -yew joining us from Chinese Academy of Social Sciences.
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South African foreign minister Ronald Lamola has criticized the United States for its silence with regard to South Africa's request for aid talks.
Lamola said, despite multiple attempts to engage in discussions, the United States has not responded to their outreach.
Early this month, US President Donald Trump signed an executive order that cut US financial assistance to South Africa, citing disapproval of its land reform policy and genocide case against Israel at the International Court of Justice.
In South Africa, it's said to host the G20 Foreign Ministers Meeting in Johannesburg later this week.
U .S. Secretary of State Marco Rubio has accused South Africa of anti -Americanism deciding to skip this very meeting after equalling Donald Trump's claim that South Africa is confiscating private property.
So joining us now in the studio is my colleague, Gu An -Nah.
Thank you very much for joining us.
Thanks for having me.
So I know in your observation, why did us President Donald Trump cut of American financial aid to South Africa, and how have the country's land reform policy, for example, as well as, I guess here, we are also talking about a genocide case against Israel launched by South Africa, how have these developments impacted this move by Trump?
Now, the situation is quite complicated.
So let me try to simplify this bad between the United States and South Africa first.
In early February this year, US President Donald Trump has signed an executive order halting US financial assistance to South Africa.
As you correctly pointed out at the beginning, this decision was mainly due to two factors conducted by South Africa.
One is land expropriation policy and the other is genocide case against Israel.
On the land reform, South Africa has passed this act last year, which allows the government to take land without compensation in certain cases, but for South Africa, the goal of this land reform is to fix the deep inequalities in land ownership which was left over from Apartheid.
They are now working to return this lens to black South Africans.
But some people in the United States may have misunderstood this as an infringement on private poverty rights, and on top of that, there are interest groups in the United States, including those with ties to white South African farmers who worry the land reform could hurt their economic interests, so they have likely influenced the US decision to cut aid to South Africa as a way to pressure the government into withdrawing or modifying the act.
And about the second factor, in December 2023, South Africa initiated proceedings at the International Court of Justice accusing Israel of committing genocide, war crimes and crimes against the humanity during its military actions in Gaza, this has angered pro -Israel political groups in the United States.
As we know, the US has long been a staunch ally of Israel, right?
And too many, South Africa's action was seen as a direct challenge to US Middle East policy.
So this has led to the response from US, including the reduction of aid as I earlier mentioned to pressure South Africa.
And besides these two factors, the domestic political climate in the United States also played a crucial role on the cutting aid.
As we know, some U .S.
politicians begin to reevaluate foreign aid and prioritize shifting resources more towards domestic issues.
But the concern really from South Africa is that the U .S.
may not stop with just cutting aid, because we know South Africa isn't the country really heavily reliant on U .S.
financial support, the real concern is that the country's preferential trade status under the U .S.-African Growth and Opportunity Act could be at risk next.
So this status has been crucial for South Africa's exports to the U .S., and losing it could have significant economic consequences.
OK. Taking issue with this land reform policy, it looks to me a bit more like blatant interference in the internal affairs of other countries.
indeed frankly speaking so um how has um south africa attempted to engage with washington diplomatically speaking seems trump's executive order was issued and do we hear any response from the american side according to reports the south africa has expressed these concerns to the united states through as the foreign minister said all attempts through their mission in washington regarding the aid cut they emphasize the historical ties between the two countries and their shared interest on global issues such as climate change and counter -terrorism, and South African officials also expressed their
willingness to engage in dialogue on the issues like the land reform we just talked about in order to clear up any misunderstandings.
But the United States' response has been rather cold or indifferent with the Trump administration maintaining a stance on aid reduction.
And the US argues that South Africa's policies do not align with America's strategic interests, and has not provided a substantive response to South Africa's offer of a dialogue yet.
OK. So South Africa's foreign minister has emphasized that his country is seeking to strengthen bilateral ties to show up support with various countries, including China, actually.
So what do we know with regard to the Chinese response for example, and by the way, have any other countries expressed support as well?
Right, the foreign minister mentioned that China said China is there in solidarity with them and stand ready to pledge support in terms of whatever trade relations and challenges that China can.
But we haven't seen any official responses from the Chinese side yet.
But as we know, China has been repeating that it supports all countries' efforts to defend its own national sovereignty and pursue an independent development path.
And China firmly opposes all forms of hegemonic practices, which involve interfering other countries' internal affairs, as you earlier mentioned, and using political and economic means to exert pressure for the pursuit of self -interest.
issues. This has been China's consistent position, and I believe there won't be much changes on this matter.
In addition to China, we have also seen the European Union expressed strong support for South Africa on this issue.
The president of the European Consul, Antonio Costa, posted on his ex -account that on his phone call with South African president Cyril Romaphosa, he highlighted the European Union's commitment to deepen ties with South Africa as a reliable and predictable partner.
So he also expressed the use of food support to South Africa's leadership of G20 and its ambition to strengthen multilateral cooperation and a pact for future to address the most pressing global issue.
I think this also serve as a response to U .S.
Senator Marco Rubio's rejection of the G20 theme of solidarity, equality, sustainability earlier.
Yeah, thank you very much.
That was my colleague Gurna joining us in our Beijing studio.
Hopefully we have, I wish we could have more time for this discussion, but time is tight as always.
You're listening to World Today.
Stay tuned. You're listening to World Today, I'm Dean Honey Beijing.
Japan's economy grew faster than expected in the fourth quarter of last year.
Preliminary data shows that the growth domestic products expanded by 2 .8 percent, backed by strong business spending and beating analyst forecasts.
Private consumption, which accounts for more than half of the economic output in Japan, rose by 0 .1%.
Analysts also cited concerns that the US president Donald Trump's tariffs could threaten global trade and pressure Japan's export -reliant economy.
For more, my colleague Zhao Yang spoke with Yan Liang, professor of economics, with Willy Matt University.
Right, so we know the annualized growth rate for the fourth quarter reached 2 .8 % and it sounds to be a very positive growth, but at the same time I think there are also concerns.
So these 2 .8 % growth was largely driven by export growth of 1 .1 % increase.
So when you look at the domestic demand, so private consumption rose only by 0 .1 % and And it's largely due to the ERM bonus increase that helped to propel more private consumption.
And the capital expenditure rose by only 0 .5 percent, which basically missed the market estimate of 1 percent of the increase.
So I think that means, you know, even though this 2 .8 percent annualized growth sounds very positive, I think there are still really weak, I think, in terms of economic performances that need to be addressed.
Especially when you look at the first quarter, I think the consumer demand is going to remain to be weak, and so that means there needs to be more policy measures and also, hopefully, other parts of the economy that could help to offset this weak consumer spending.
And some economists say the underlying trend remain weak among the rising food prices.
So why are the food prices rising, and what effect is the problem having?
For example, rice, which is a staple food for Japanese, the price of rice has gone up quite a bit.
When you look at 2024, they had a quite historical surge of 27 .7 percent on that rice price compared to 2023.
That is the biggest increase since 1975.
There are a couple of reasons for that.
one is that there is a long -term trend of shrinking agricultural land, but there's also increasing the production cost and government policies to maintain high -rise prices.
They're also having tariffs on the imported rice to protect their domestic rice production, so a lot of that basically translated into higher costs of rices domestically, not to mention because of the depreciating yen that also elevated rising prices of imports.
So there's this confluent mix of factors that contributed to the higher foot price.
And so that is what translates into higher inflation in Japan's economy, which then prompt the Japanese Central Bank to raise the interest rate to 0 .5%, which is the highest since October 2008.
And some are concerned that Trump's tariffs could pressure Japan's export -reliant economy.
So which sectors will be hit most?
Well, I think the automobile sectors would definitely be one of those because Japan does export a lot of cars.
But I think the problem, of course, here is that it could be a wide range of sectors just because Japan runs a $68 .5 billion trade surplus with the United States.
But at the same time, it's not clear after, you know, Ishiba and Trump met about two weeks ago whether or not Japan is able to avoid a kind of a reciprocal tariff that Trump promised to levy on a wide range of countries.
So Ishiba has made a number of pledges.
For example, he has agreed to invest in the U .S.
steel companies rather than purchase.
He also filed the plan to raise investment in the United States to an astronomical $1 trillion, and Japan also promised to increase LNG purchases from the United States.
So I think it really remains to be seen whether or not the so -called reciprocal tariff will be imposed on Japan.
And if it does, then I think that would affect a lot of the Japanese industries.
As I just mentioned, the fourth quarter growth was largely due to the exports of goods and services.
So in the U .S., of course, is a big market for Japan.
So if the tariff does go into effect, that is going to, I think, undercut the Japanese's exports.
And what do you think are the pillar industries for Japan's economy right now?
Well, I think you know, in terms of the Japanese industries, they're still quite competitive in consumer electronics, automobiles, and some other sort of the more tech intensive sectors.
But that said, I think, you know, the problem as we just mentioned, the export prospect is not clear, but more importantly is that domestic demand remains to be weak.
So for example, their real wage growth is likely to be negative in the first quarter of 2025, despite government's energy subsidies and all of that.
So I think in a way, you know, when in Japanese households are facing those difficult challenges of both repressed real wages, but also elevating, you know, costs when it comes to energies, and also food prices, I think this is really will dampen the consumer spending.
So I think that would then translate into less sales, less profits for the industries, unless they are able to again export out of this insufficient domestic demand, but that would then add more pressure on the trade front.
So that means, you know, Japan still needs to really work on their consumer demand domestically, and also the expenditure by companies.
So I think those are really long -term structural issues.
It's not something that could have a quick turnaround, especially in this high elevated inflationary pressure environment when the Japanese central bank is actually raising the interest rate.
So I think this is quite a difficult challenge for the policy makers.
What do you think about Japan's monetary policy?
Analysts expect a move of interest rate hike in summer, so why is that?
Especially when the major banks in the world, for example the U .S.
and Europe, are considering the rate cut?
Right. So I think that it's exactly another dilemma.
You're right that countries in Europe, for example, they're facing more sort of the slow growth, but the inflation has largely been under the control at this moment.
In the US it's hard to tell because again, with all the uncertainties of Trump's policy, right, some of his policy pledges like deportation of immigrants and all of that could elevate inflation.
So I think Fed is really watching closely to decide if they're going to cut rates or keep the rates at this level for longer or even people talked about the potential of even raising interest rate later on.
So I think that puts Japan in a difficult position, because on the one hand, as I mentioned, their economy is quite weak, but on the other hand, there is elevated inflation.
So, that puts a monetary policy in a very, you know, kind of strict jagged way, right?
I mean, they do want it to lower interest rate to, you know, you know, waste overlay and support domestic demand.
But at the same time, if they do lower the interest rate, that could cause yen to depreciate either even further, and that could, again, increase the important inflation.
So, it has become a very difficult balance, I would say, when it comes to monetary policy.
So, maybe that's not really what it's going to be really helpful.
They do need to look into more of the fiscal policies and maybe some other industrial policies to do the trick.
What do you think about Germany and Japan?
They face the problems of aging population, labor shortages, but how different are their economic structures on other fronts?
I think that's a very interesting question.
I think yes, in some ways, Japan and Germany both are, you know, manufacturing powers and they both face, you know, the population aging problems and the shortages of skilled labor, and you know, they definitely have sort of different kinds of strategies.
Germany has maybe more of sort of the open floor immigration policies than Japan, but Japan has definitely made progress in terms of their industrial automation and robotics.
So I think it remains to be seen.
I think Japan is handling those through more technological intensification in terms of selling more robots and using more automations to help with the labor shortages.
And so in that front, I think Japan has certain advantages.
But, again, Germany would have to also ratchet up on their industrial production and automation to be able to make up for the long -term structural problems of labor shortages.
Yanliang, Professor of Economics with William Metz University talking to my colleague Zhao Yang.
That's all the time for this edition of World Today.
A quick recap of today's headline news, China says it is fully ready to enhance further cooperation with Ireland.
In a crisis meeting, European leaders stressed support for Ukraine but disagreed on peacekeeping missions.
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I'm Dinhane Beijing.
Thank you so much for listening.
Bye for now.
