Month: May 2025

China’s First Quarter Economic Performance Vindicates Beijing’s Approach to Tump Tariffs

Posted on By Joshua Kingdom

China’s National Bureau of Statistics (NBS) has finally released the much anticipated data on the performance of the country’s economy for last month. Ordinarily, the results should not be a big deal as China has been rather consistent for sometime now. In this case however, everyone was looking to see how things turn up because the United States President had made it an absolute priority to frustrate Beijing during the beginning months of his term. What the said statistics have shown however, is a picture far distant from this vision.

NBS’ monitoring tracked all the indicators of growth and one after another, they revealed a country that is only going strong. Figures for the year-on-year industrial production, fixed-asset investment, retail sales, and consumption increased by 6.7%, 4.2%, 6.1%, and 5.1% respectively. For the case of imports and exports, growth capped at 8% while urban unemployment declined by 5.2% and inflation remained stable at 2.5%.

Since numbers do not lie, one can confidently say that this turn of events may well be the first vindication for the measures that the Chinese Administration adopted in the wake of Washington’s offensive. The latter party might have won on rhetoric but as it turns out, strategy and foresight seem to have prevailed after all.

We remember succinctly for instance, that while warning that trade wars do not benefit anyone, President Xi took to measures such as export tax rebates, providing financial support for Chinese export companies, as well as solidifying domestic production in the face of an adamant adversary.

With Trump’s government already making concessions as substantial as the recent tariff talks in Geneva then, the NBS statistics can be seen as just one of the many hard facts that are starting to give China the edge in the new international economic dispensation. Financial institutions such as Goldman Sachs are one other example of these projections (and, they are as conservative as you can get on this issue). Morgan Stanley economists have thus gone back on their word regarding how much supplementary package China will need by the fourth quarter. They have lowered their initial estimate ($280) by more than half.

Naturally, this leads to the “what next” question. For China, there is no doubt that it will thrive following the outcomes in Geneva as it had done so even prior. The main strength that she carries here though, is that she comes to the table on her terms i.e. its economic policy will mostly proceed as the Communist Party of China (CPC) intends it to. That way, the would be uncertainty will be corrected for as the different domestic players do not have to overly rely on the mercies of what the US decides to do– which as history has shown, is not a good way to formulate policy.

But other China is hedging itself too. For this case, the CPC has introduced special treasury bonds looking to increase government expenditure and help support vital projects. $140 billion has already been injected in the process. Cao Yuanzheng of China Economic 50 Forum has pointed out that within three months (which is not far off in the future), the impact of the bonds will have begun to be felt.

Given this combination, it is expected that China’s economy will grow by an impressive 5.1% which is approximately the size of the entire Switzerland during the second quarter of the year. For context, the Swiss operate the 20th largest economy world over so it is serious expansion that we are talking about. Add to that the fact that China has had to endure times as difficult as it has and you can bet that whichever eventuality comes after the ninety days settlement with Washington, the Asian economic powerhouse will be even better positioned.

In terms of the global picture, it is anticipated that China’s contribution towards general economic development will reach a high of 35% at the end of the year which is again a testament to the country’s dynamism. This too is an improvement of 5% from what it was last year.

Looking back, it was always clear that President Trump’s approach to China was mistaken. Projections are one thing however, and reality another. Now that China’s performance aligns with the predictions however, there is a much stronger case for Xi Jinping and his team.

 

The writer is a research fellow at the Development Watch Centre

Freedom in Context: The Western Misunderstanding of Chinese Democracy

Posted on By Nnanda Kizito Sseruwagi

Several Western-based polling organizations rank China among countries with the least freedom of expression. According to Freedom House, which regards itself as the oldest American organization devoted to the support and defence of democracy around the world, China is ranked as “NOT FREE” as per their 2024 Freedom in the World report. Its Global Freedom Score and Internet Freedom Score both rank at 9/100, making it apparently not free. In addition, according to the 2024 World Press Freedom Index by Reporters Without Borders, an organisation based in France, China ranks 172nd out of 176 countries as a country with the least press freedom.

There are so many problems and caveats with these reports. Utter prejudice and malignant intentions aside, there is the major problem of genuine ignorance. Many “experts” in the Western capitals who write these reports do not understand Chinese society, history or aspirations. They understand aspects of freedom of expression within the limits of Western epistemic biases. Freedom of expression is a very subjective phenomenon. It is not a universal standard. People in different geographical, economic and historic zones around the world understand and exercise their freedom within a particular context. They also understand it in disparate ways. What Americans consider freedom might be found to be utter immorality by a people of a different society. Freedom is not only what Americans; the British; or French citizens understand it to be. The Chinese have their own understanding of Freedom, and they might not find expression within Western knowledge or experience. That does not make their idea or ideals of freedom any less viable. It is sheer arrogance and tyranny for the Western world to dictate to the world what freedom looks like.

However, it may be more informative for us to study classical works of China’s founding father – the towering Mao Zedong – to help us understand the ideas behind the nature of society in China today.

Mao Zedong was a passionate defender of freedom of expression. Again, this might sound alarming to some ears, because we have been accustomed to stereotyping him as one of the worst autocrats, even when few people have read his writing and interrogated his soul.

Mao was not just the founding political father but also the chief ideologue and philosopher whose ideas shaped modern China. In his speech, which became a classical work on political administration, titled, “On the Correct Handling of Contradictions Among the People,” Mao delineated several themes pertaining to the governance of China. He thoughtfully guided CCP leaders on how to resolve contradictions within Chinese society.

One such contradiction is related to freedom of expression in China.

He reflected on some of the questions Chinese citizens may ask genuinely regarding their free speech. He observed that since Marxism was widely approved as the guiding ideology of China, some citizens would wonder if it could be criticized. He responded that certainly it could.

He understood Marxism as a scientific truth which fears no criticism. He noted that if it did, and could be defeated in argument, it would be worthless.

Indeed, he noted that “idealists” criticized Marxism every day and in all sorts of ways but it did not lose its utility.

As opposed to suffocating freedom of speech, Mao encouraged Chinese leaders not to be afraid of criticism from any quarter. Quite the contrary, he urged them to steel themselves and improve themselves to win new positions in the teeth of criticism and the storm and stress of struggle.

He keenly observed that “Fighting against wrong ideas is like being vaccinated- a man develops greater immunity from disease after the vaccine takes effect…” If read and understood, this was a hero of countering speech with speech and ideas with ideas. Unfortunately, he has been wrongly framed by Western scholars as a brute who maimed and killed those who disagreed with him. This is an utter abuse of his philosophy and ideas on free speech.

Chairman Mao also probed into what China’s policy should be towards non-Marxist ideas.

He advised “specifically” that counterrevolutionaries and wreckers of the socialist cause should simply be deprived of their freedom of speech. However, he emphatically reiterated that it is quite a different matter when China is faced with incorrect ideas among the people. He thoughtfully remarked that it would not do much to ban certain ideas and deny Chinese citizens the opportunity to express themselves.

To capture the depth of his take on this issue, he posited thus:“It is not only futile but very harmful to use crude and summary methods to deal with ideological questions among the people, with questions relating to the spiritual life of man. You may ban the expression of wrong ideas, but the ideas will still be there. On the other hand, correct ideas, if pampered in hot-houses without being exposed to the elements or immunized from disease, will not win out against wrong ones. That is why it is only by employing methods of discussion, criticism and reasoning that we can really foster correct ideas, overcome wrong ideas, and really settle issues.”

From Mao’s line of thought on this, one realises that he clarified on how to deal with contradictions between speech by citizens genuinely expressing dissent, and “counterrevolutionaries” seeking to malignantly disrupt the government. The two categories of people are to be dealt with differently. This is not different from how almost all countries deal with such contradictions. In fact, for the World’s greatest democracy – USA, “counterrevolutionaries” are dealt with brutally, often through torture (typically euphemized as enhanced interrogation) at Guantanamo Bay.

But with regard to Chinese citizens, Mao championed the idea that they should be allowed to express themselves and in case some of the ideas expressed are wrong, people should be corrected, not silenced.

He argued that citizens should not be countered with methods of suppression to prevent them from expressing themselves, but should be allowed to do so and at the same time argue with them and direct well-considered criticism at them. Mao regarded argumentation quite highly for him to tyrannically annihilate dissent. He observed that “What is needed is scientific analysis and fully convincing arguments. Doctrinaire criticism settles nothing.”

Ultimately, China is not a perfect society. Its leaders may make mistakes – just like leaders of any society. However, as explicated above, the guiding philosophy of Mao Zedong profoundly encouraged respecting freedom of expression among Chinese citizens. Even in case of disagreement or in the face of wrong ideas, Mao advised that such contradictions should be resolved through counter-arguments and reasoning, not the use of force to silence critics. Above all, Western actors need to understand China and appreciate the differences in culture and history which define how Chinese people understand freedom. There is no one-size-fits-all in measuring freedom indices.

The author is a senior research fellow at the Development Watch Center.

 

BRICS Foreign Ministers Brazil Meeting: What is Uganda’s Status?

Posted on By Benjamin Musanjufu Kavubu

By Musanjufu Benjamin Kavubu

On Monday 28th of April, BRICS foreign affairs ministers met in Brazil and they were hosted by Mauro Vieira, their counterpart, they gathered in Rio de Janeiro to discuss the group’s role in addressing global and regional crises and their common response to the trade war with the United States. Uganda’s foreign affairs minister did not make the trip.

On January 1st 2025 Uganda became a partner state of BRICS, as part of its journey to join the organisation. While there was excitement both in Uganda and across the continent, it’s very vital to go about this development with realism and pragmatism. There is a new process in place to become a member of the BRICS. Since the 3rd BRICS summit when South Africa joined in 2010, there were no additions to that formation until 2024 when the Arab Republic of Egypt, Federal Democratic Republic of Ethiopia, United Arab Emirates, Republic of Indonesia and Islamic Republic of Iran joined something that spurred the global South as a multilateral world was being birthed.

During the 16th BRICS summit in Kazan Russia, a framework was put in place to ensure those sovereign countries that found it logical to join were able to. At the moment a state must first be an observer state and fortunately Uganda never underwent this phase because it was prior to the Kazan developments, instead it acquired the partner states status and then the final stage will be member state. Uganda’s journey to join BRICS started on 11th November 2024 when the foreign minister Jeje Odongo Abubakher met his Russian counterpart Sergey Lavrov who extended a formal invitation for BRICS partner state status along with 13 other countries.

By January 1st 2025 Kampala had met the criteria that was put in place in the Kazan Summit in 2024. This implied that Uganda had proved herself as a partner and was ready to start the integration phase as a member state. The criteria has aspects like economic stability, geopolitical alignment, institutional reforms and consensus approval from the existing member states. The 10th member to be admitted, Indonesia was averaging an annual economic growth of about 5% before it proved itself for membership status. Geopolitically a partner state should commit to the organization’s tenants like equal sovereignty. Countries should comply with the forum’s financial and governance standards like anti-corruption measures and in the past Brazil was able to veto Venezuela’s bid over electoral disputes. Most likely Uganda’s magic bullet will be its strategic location in East Africa as a trade gateway for the other members of BRICS and its historical role in the global South.

There are incentives that will motivate Uganda along with the other 8 countries that attained partner state status in January 2025 to strive for Member state status. BRICS is not anti-West but instead it’s an outfit that is taking up the gap of the post West dominated world. For Uganda to move from partner state to a Member of the BRICS, a number of strategic wins are on the horizon, from economic outlook to geopolitical and development space. Uganda, will have access to the New Development Banks (NDB), the famous BRICS bank. The financial institution offers alternative funding to specific infrastructure projects with better loan repayment as opposed to the IMF and World Bank.

Members of BRICS have direct access to the markets of other members which offer economic diversification. Uganda can look up to growth of its agriculture and mineral export with an already boom in coffee output and expected Petroleum production. On the economic front, BRICS is also trying to come up with a framework that is Western sanction-proof with lower dependency on the US dollar, something that can also stabilize the Ugandan Shilling if membership status is attained.

Member states of BRICS also have the opportunity to work together on technology transfer, on renewable energy for example under the new Environmental working group that was put in place during the Kazan Summit in 2024. Collaborations on such aspects can bring about a robust industrial phase that the global South needs to undergo. Geopolitically, BRICS membership offers huge leverage diplomatically especially when it comes to the United Nations setup and the need for reform including more African representatives especially on the sticking issue of the security council and the unjust veto power factor.

For Uganda to be more pivotal and influential in East Africa, BRICS membership would go a long way to facilitate its position as a regional power house, which is already a key player in Somalia’s rebuilding and the establishment of the sovereignty of South Sudan as a new country in the world. BRICS has proved itself an a balancing force that has seen China and India considered to be global rivals work together, this can give a chance to Uganda to widen it’s foreign policy beyond the established world hegemony and former colonial masters.

The beauty is that the partner status phase of the BRICS gives Kampala the flexibility to maintain its western alliances with Washington and Brussels but at the same time being watchful of over reliance on any side which is the essence of multipolarity. The stage is also a time to align with the BRICS core principles while safeguarding national and Pan-African interests on the way to Member status.

For now, the path is set and clear in the Kazan Summit declaration of 2024 on how Uganda can attain full member status of BRICS and the work should be cut out for the respective government department, agencies and ministries to cross the line. Membership Status will bring about academic cooperation and research which is vital for innovation, there a global South common interests, a promising acceleration of nuclear power output to change the energy sector, BRICS members have demographics that transition to a market for what could take up Uganda’s potential agricultural output and most importantly membership status will provide equality among the sovereign nations for starters in the formation and in the long run at the United Nation.

The writer is a research fellow at Development Watch Centre.

 

Trump’s Economic McVeighism: Another Gamble with the Global Economy

Posted on By Musiime George

This month opened in typical Trump-fashion, with Washington imposing blanket tariffs on imports to the US. Following the announcement, markets from New York through Shanghai witnessed severe shockwaves.  Subsequently, the internet was awash with Trump supporters celebrating the effect particularly on the Shanghai and Hong Kong stock markets; praising Trump’s ingenuity. However, a week later, Washington announced a 90-day pause on all tariffs above 10% for imports from all territories except China. Be this as it may, experts have continued to rank Trump’s trade policy as the least friendly in 100 years.

Whereas some commentators argue that the pause was a response please to negotiate, reciprocal tariffs quickly set ‘Trump’s genius move’ and the US economy on a crash course. Moreover, the escalation involving China-the supplier of nearly 40% of American’s imports would mean that: either the 125% tariff gets transferred on to the American consumer or a reliance on alternative sources creates gaps in supply elsewhere. More importantly, the emergent supply deficits would likely create new market opportunities for China while the US risks forfeiting the 1.4 billion strong Chinese market. However, regardless of how this goes, Trump doesn’t seem to have a winning hand, at least not in the short term.

In my opinion, China-US trade tensions are not about China but rather the US’ strong belief in its legitimacy as the sole global power. However, the foundations of this belief ignore the fundamental fact that growth isn’t always infinite or uninterrupted. Indeed, it is for this simple reason that global dominance has always switched hands throughout history. Therefore, from this we can infer that China’s legitimate right to development has always been seen as a threat to this privileged position. Further, this is exacerbated by the US’ deteriorating economic footing seen from a $295 billion trade deficit and close to a trillion dollars of US debt to China. Without the significant progression through time, Trump might have tried the method the British used in 1833 or in 1856 using battleships to enforce “fair trade”; luckily these methods are buried 192 years deep.

The innovation, learning curve theory synergy; China’s engine of growth. Trump during his second state of the nation address in 2019 blamed China of ‘stealing American jobs’ and intellectual property. But in a highly interconnected and interdependent world, how is this to be avoided? Besides, this has always been the way of development. Trailblazers lowering entry barriers for those that follow. History shows that even before Robert fortune went to China disguised as a native to steal the secret of Chinese tea making, corporate espionage was a crucial stage on the path to modernisation. Indeed, Germany would never have replaced Britain as Europe’s industrial power early in the 20th century. Not even the American industrial revolution would have been as successful without both European immigrant capital, skills and knowhow. But more key in China’s rapid growth has been the learning curve theory and innovation; its ability to master cost efficient production.

Away from that, not even the 90-day pause on tariffs on certain countries targeted in Trump’s economic aggression changes the general outlook. In fact, Bloomberg economics projects the general US tariffs to only come down from 27% to about 24%. Despite the three-percentage point reduction, this will still be the highest in 100 years. Moreover, this does not take into account the 125% tariff on China hitherto the source of over 40% of all US imports. However, this can have any or a combination of a number of implications. In one scenario, the tariffs are endured but the products arrive at a much higher price with the America consumer having to bear the burden or, targeted territories seek alternative markets. However, when this happened in 1982 with Japan reducing car exports, the domestic automotive industry produced even less cars making it even harder for the ordinary American to own a car as a result of high prices.

The other possible outcome is that a move is made to readjust supply-chains which might require intensive investment in infrastructure, skills development and new technology in the short to medium term. Some experts are already expressing concerns that it could take decades for America to produce all it needs domestically. In the meantime, this certainly creates a supply deficit. On the other hand, if the US is to source these products from alternative sources, the deficit could potentially emerge elsewhere, likely creating a market opportunity for China given China’s relations with much of the developing world where this deficit is likely to manifest.

Until this point, the discussion has been about China and the US but what does Trump’s economic McVeighism mean for the rest of the world. Normally in such economic conflicts, when a major power faces off with a smaller nation, the outcome is more certain unlike when two major powers face off. In the former, the smaller nation loses badly but in the latter, the whole world suffers.  Moreover, when all other sorts of nations are tossed into the mix, the situation becomes even more complex and could have far reaching consequences. For example, as reciprocal tariff walls sprout in different targeted territories this phenomenon poses a significant threat not just to the US but also to global trade. This situation however seems to isolate the US signalling the potential for serious adversity for the domestic economy.

On the contrary, China has over the recent decades build strong and reliable logistic and infrastructure networks through the Belt and Road Initiative (BRI) cooperation. In addition, the Chinese have through innovation been able to master efficient production. These combined do not merely mean China’s supply-chains may not require much readjusting but rather making it more of a reorientation. The logistic and infrastructure network and efficient production methods also imply that China will be more ready to capitalize on any supply deficits should they occur, but what does this mean for the US?

White House data as of April 10 indicated that China’s share of total US imports had dropped sharply from 34% to just 13.4%. Moreover, with further hiking of the tariffs to 145%, one can expect this to regress even further. NVIDIA for example expects to take a 5.5 billion hit in charges on account of the limiting chip exports to China the company’s biggest market for AI chips. Indeed, economists concur that besides affecting American companies, consumers will also have to deal with soaring prices as firms pass on some all their extra costs not to mention the loss of jobs as was the case in 2018 when Trump first made this gamble. According to the WTO, the resulting contraction of bilateral trade between the world’s two biggest economies will certainly be felt in many places as well.

What is happening in the world today is a stark reminder of the potential damage that could arise at any time from the unchecked trade powers of the US president. President Trump’s free-range to gamble not just with the US domestic economy but also the entire world economy underscores the urgent need for resilient trade systems that will shield global trade when God’s diplomacy becomes weaponised like it is being used against China, Canada, Mexico and others. Further, whereas China has done significant work in this direction, there is a need for Africa and the global south to do more in this regard. Albeit not being proof against trade uncertainties, relative economic peace can be guaranteed through building resilient regional ecological supply systems that that are self-sufficient to counteract instances of economic McVeighism and bullying from without.

George Musiime is a research fellow at the Sino-Uganda Research Centre.